The global container trade is expected to grow beyond initial forecasts for 2024, as US and European retailers replenish stockpiles to pre-empt potential disruptions. This could lead to higher shipping rates, improved handling efficiency, and the potential for port operators to hike tariffs next year. S&P Global Ratings suggests that China's port operators have sufficient financial buffers against potential trade tensions, even if throughput were to decline by up to 30 per cent.

The rerouting of vessels has caused delays of up to two weeks, with liners skipping smaller ports in Asia in favour of larger transshipment hubs. Despite the congestion, strong demand from Europe and the US is supporting robust throughput, with US GDP growth of 1.4 per cent in the first quarter (Q1) and 2.8 per cent in Q2 underpinning resilient retail consumption, as per S&P Global.

Trade tensions remain a key downside risk, with the potential to accelerate the relocation of supply chains away from China. Despite these risks, S&P Global believes that China's port operators are well-positioned to manage volume risks and capital expenditure, particularly in automation, digitalisation, and sustainability.

China's leading ports, such as Shanghai and Ningbo Zhoushan, are already planning capacity expansions, while port operators like SIPG and HPHT are focusing on improving handling capacities and exploring overseas acquisitions. The persistence of port congestion highlights the vulnerability of the global supply chain, emphasising the need for collaboration between port operators and shipping companies to streamline cargo flow and manage future disruptions.

Fibre2Fashion News Desk (DP)