Published Date : Feb 17, 2016
China’s booming trade activity and economic development has, in the past, benefited port operators, shipbuilders, and cargo liners, allowing them to make millions of dollars. However, these same elements of the shipping industry in China have been facing a bleak future owing to the adverse economic conditions in the Asian country. Even though there are many opportunities to reap in other countries, the plunging demand for oil rigs and the constantly falling oil prices are making it rather difficult in the present scenario. In 2015, the imports in China presented a 13.20 per cent decline. In addition, the traffic on some of the busiest routes in the past and the rates for shipping commodities to other parts of the world have also plummeted.
Singapore, Hong Kong Suffer from Plunging Sea Route Traffic
According to Bloomberg, the container traffic in Singapore dropped by around 8.7 per cent last year, a figure that has been the lowest in the past six years. Hong Kong presented a similar scenario, a region that boasts of being among the five busiest ports in the world. The decline in sea route traffic is not only restricted to Asia, unfortunately. Suffering the same fate is Rotterdam, a booming port in Europe.
Bleak Future of China’s Shipping Industry
The shipbuilding industry in China is presently being affected by the uncertain economic future of China. However, this effect is anticipated to last not just for the next few years but well into the future. On the one hand, new orders for vessels have sharply declined over the past year. On the other hand, there has been a surge in the number of unwanted sea vessels being demolished. This scenario tells a story that is likely to have far reaching effects, compared to the stable and profiting conditions just a few years ago.