3D Printing May Disrupt Ports and Reduce U.S. Imports from China, Says Fitch Ratings

Ocean cargo seaports in the U.S. may be most exposed to disruptive effects of 3D printing (3DP) on transportation infrastructure assets over the next 20 years, Fitch Ratings says.

3DP could reduce global trade, including reducing U.S. imports from China by 10%-25%. Short- and medium-term risks are limited due to a still emerging technology uptake.

“We expect 3DP to grow significantly over the next 20 years, potentially reaching about 3% of total global manufacturing,” says George Abbatt, Director, Global Infrastructure and Project Finance for Fitch Ratings in London.

Analysts also noted that 3DP is less labor intensive than traditional manufacturing and could reduce reliance on lower-wage countries for product assembly, which is a key driver of the U.S.-China bilateral trade imbalance.

“In addition, as mass production via 3DP becomes more economically feasible, supply chains could be shortened with more manufacturing carried out locally,” says Abbatt. “Net goods transportation may reduce as a result, negatively affecting transportation infrastructure’s revenue.”

Ports, which primarily handle the transportation of cargo rather than passengers and account for the majority of international goods transportation, may be the most affected by 3DP.

We believe that if trade protectionism continues to intensify, businesses in the U.S. and China may have a strong incentive to adopt processes that facilitate domestic goods production, including 3DP. This could help the U.S. reduce its bilateral trade deficit with China.

Fitch Rating's senior director, Emma Griffith, told SCMR in an interview that Pacific Rim ports may be more vulnerable.

“There is likely more exposure to ports that are more heavily concentrated in long-distance import activity, such as those on the West Coast of the US. Ports with a more balanced mix of imports/exports and trading partners that are nearer geographically may see less of an effect.”

Fitch maintains that the bulk of U.S. imports from China are products that, based on recent technological advancements, are well suited for 3DP:

“These imports include machinery and electronic equipment, such as computers and mobile phones. We expect that 20%-50% of these goods can be produced domestically. We also expect trade relationships between other countries to be affected.”

However, conclude analysts, some forms of traditional mass manufacturing are likely to remain in place due to cost efficiencies, which may limit the impact of 3DP printing on international trade.

Furthermore, the effect is likely to be mitigated by an increase in transportation of materials to be used in 3DP.

This issue, and other “disruptive technology” topics will be addressed at the plenary session of the 2019 USC Marshall Global Supply Chain Excellence Summit when it convenes in early August.

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