China’s soft economy has negative impact on ocean cargo supply chains

China’s unstable economy has contributed to an uneven flow of good to and from the United States, report trade analysts. The impact is significant to ocean shipping providers, they add, since China is our largest trading partner outside of the North America Free Trade Agreement (NAFTA).

According to data from Cass Information Systems and INTTRA – a multi-carrier e-commerce network for ocean shipping – prices for imported goods moved via containers continued in a downward trend in May, led by a 1.2 percent drop in computer prices from China. This is the largest decline since May 2013.

“Since one in every four containers in global trade is ordered on INTTRA portal, we have a good statistical view, yet it may differ from government statistics that include other types of cargo,” says Inna Kuznetsova, President, INTTRA Marketplace.

“Our data shows that U.S. exports to China rose by 30 percent year-over-year in the second quarter after a 30 percent year-over-year drop in the first quarter,” adds Kuznetsova in an interview.

She believes that some of this swing may be attributed to West Coast port congestion in the first quarter.

“ We experienced record volumes on the INTTRA platform last month, as exports rose 76 percent versus June 2014,” says Kuznetsova. “We hope this indicates a strong production and shipping season.”

Raw Materials – the U.S. largest export to China – rose by 31percent in Q2 year-over-year, including a spike of 47 percent in June. This happened after falling 13 percent in Q1 vs. 2014

At the same time, the Ocean Freight Index notes that nearly 43 percent of overall container import decline was due to decreased imports from China.

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