Demand of goods from Asia slumps, container ships cancel voyages: Bloomberg

China’s Golden Week typically marks one of the busiest seasons for seaborne trade. Before the holiday, ships in China are rushing to leave ports for the US and Europe to stock up warehouses in preparation for the fourth quarter.

However, global demand for Chinese goods have entered a slump. Changing consumer behaviours coupled with supply chain delays have led to a downshift on what is usually peak season for the shipping industry.

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As inflation continues to rise globally, customers from the US to Europe have cut back on spending and have shifted from goods towards services. The demand for Chinese goods has softened as a result, causing the container shipping industry to make several cuts themselves by cancelling voyages.

According to Bloomberg, part of this decline can be blamed on consumer behaviour. It said that since peak season arrived early, companies refilled inventories in May and June rather than risk further delays brought by Beijing’s strict Covid Zero policies, the war in Ukraine and other unpredictable disruption.

The global information and technology company noted, however, that there are broader economic forces to be considered.

For example, container shipping giant Maersk said in its latest dvisory on North America that volumes on its transpacific and transatlantic trade routes are softening from August levels, though they’re staying more elevated than pre-pandemic periods.

“Consumer spending patterns have both softened and shifted away from goods-heavy pandemic-era patterns and more towards the services and experiences unavailable during the Covid outbreaks,” Maersk said.

“We are in the process of actively adjusting our shipping network to align to customer demands,” it continued.

Other firms have also reported the decline in global trade. New data from Hongkong’s Census and Statistics Department revealed that Hong Kong’s exports contracted the most since the pandemic first began in early 2020, as global demand eased and shipments with mainland China were disrupted.

Source: Bloomberg.