Global shipping Changing patterns in global shipping hubs

Global shipping networks are increasingly dependent on a small number of Asian mega-ports, particularly in China. But this concentration can have major implications for global supply chains when disruption occurs.

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In 2020, almost 40% of all global shipping was moved through China. That’s a pretty staggering statistic and a sign of just how dependent the world has become on a small number of ‘mega’ ports in China and several other Asian countries.

The world’s biggest container ports in 2005 and 2019 by shipping volume (Graphic: Statista)

This dominance isn’t new – but it has grown considerably in recent years. In 2005, the world’s six busiest ports were in Asia, with three in China. Rotterdam, Hamburg, Dubai and Los Angeles completed the top ten. Just 15 years later, seven of the world’s ten busiest ports are now in China, with Rotterdam the only non-Asian representative.

Coinciding with this geographical shift is a major increase in shipping volumes. Singapore and Busan, for example, have seen growth rates of well over 50% in container throughput since 2005. But it is China where things have really changed. In Shanghai, container throughput has more than doubled in the last 15 years. The same goes for ports in Qingdao, Guangzhou and Ningbo-Zhoushan.

The main reason, of course, is that China has established itself as ‘the world’s factory’. It has been the world’s largest exporter for just over a decade and sends mass-produced parts and products for almost every industry around the globe.

But, as China’s middle class grows, it is also importing more and more Western products, says John Mangan, professor of logistics at Newcastle University. In May 2021, the country’s imports grew by 51.1% year on year, the eighth consecutive period of import growth and quickest for ten years.

Mega-ports – mega-problems?

Shipping has become the backbone of global supply chains: 90% of world trade is now carried by sea. It is an efficient, cost-effective way of transporting goods across huge distances. Many shipping networks function as ‘hub-and-spoke’ models, with neighbouring countries reliant on feeder services to and from hubs like Shenzhen, Shanghai, Singapore or Rotterdam.

That’s fine when everything is working smoothly. But disruptions at mega-ports can have disastrous consequences. In May 2021, after a Covid-19 outbreak among port workers in Shenzhen, operators shut down its Yantian port for several weeks. Container ships were stranded both inside and outside the world’s fourth-busiest port, causing a domino effect of disruption for global shipping. At one point, up to 5% of the world’s freight capacity was stuck in China. Manufacturers and retailers around the world are still dealing with the fallout, which may even impact shipments for Christmas.

Shifts in global trade patterns

John Mangan says this was just the latest in a “long line of unhappy events”, from congestion and labour issues to cyberattacks and piracy. Global, just-in-time supply chains bring many benefits, he says, but also major downsides in terms of dependency. Interruptions like Yantian and the recent Suez Canal blockage highlight our reliance on fragile systems.

This reliance is unlikely to change dramatically in the near future, Mangan says, “although there will undoubtedly be some shifts”. China’s huge Belt and Road Initiative could alter the current picture by boosting capacities in Europe, as well as Central and Southern Asia. Melting ice caps are opening up shipping routes through the Arctic, which could see more goods moved through Russia.

More generally speaking, the Coronavirus pandemic is accelerating a slowdown in globalisation, according to the United Nations Conference on Trade and Development (UNCTAD). This will result in more regional trade, shorter supply chains (‘nearshoring’) and greater redundancy through larger inventories, it says.

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