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Global trade continues to grow but at slower pace
Published:2018-12-1   Have been here 41   Source:泓威国际物流

Macroeconomic headwinds will see global freight growth momentum soften in the coming months, according to Tim Scharwath, CEO of DHL Global Forwarding, Freight.

He told Lloyd’s Loading List that US imports into the US had been front loaded since the summer as shippers took steps to avoid tariffs on Chinese imports which are scheduled to further increase on January 1. As a result, ocean and air volume growth will dip in the first quarter of 2019, particularly after Chinese New Year.

“There was more volume coming in than last year in Q3 to fill up the warehouses of our customers,” he said. “We can only assume now based on the Q4 outlook, and of course depending on how the trade negotiations between China and the US end, that there will probably a bit less volume than in Q1.”

However, Scharwath said that, as happened earlier this year when tariffs were imposed on aluminium imports, Chinese exports would find alternative markets if US demand faltered.

“The volumes from China into the US will drop but the volumes out of Asia to Europe will eventually go up, like happened with aluminium which used to go to the US, then got shipped to Europe when tariffs were put in place.

“Cargo finds its way, it has to go somewhere. Shippers might (need to) sell it cheaper, but it will end up in someone’s container, hopefully ours, or someone’s airplane, hopefully ours.

“There is a lot of uncertainty at the moment. Predictability is always important for trade and we don’t have the predictability now that we have had in previous years. (But) on a global perspective, I’m not worried about these things. Because they happen, and we deal with it.”

High eastbound Transpacific trade growth was a key factor in DHL Global Forwarding deploying a second dedicated Boeing 747-400 freighter connecting the US, Europe and Asia earlier this year. Scharwath said any downturn in trade on the lane would see DHL’s forwarding division reduce its air freight exposure.

“We’re more likely to cut the service back than expand the network next year,” he admitted.

However, while trade growth will soften next year, it will still expand Scharwath said, citing the latest DHL Global Trade Barometer (GTB).

“Both, air and ocean trade, continue to grow around the world,” he said. “However, given the smouldering trade conflicts, especially between the US and China, and economists’ expectations that the global economy could cool down, it is not entirely surprising that trade momentum has weakened slightly”.

GTB was launched in January and, using logistics data evaluated using artificial intelligence in partnership with Accenture, is designed to offer an early indicator for the current state and future development of global trade.

Scharwath said so far predictions had proved accurate with forecasts and real trade flows closely aligned.

All seven countries that constitute the GTB index in the latest reading which covers trade strength from November to January were above 50 points, which corresponds to positive growth forecasts for international air and containerized ocean trade flows while the Overall World Trade score was 61, down from 63 in September.

The latest GTB findings also supported Scharwath’s reading of the current market, not least his forecasts that volume growth will slow in the coming months.

“This deceleration will be particularly strong in Asia – except for China,” said DHL’s analysis. “Index values for India, Japan and South Korea have dropped by eight, six and five points respectively compared to the previous release of the GTB in September. With an overall index of 75 points. India, however, continues to be the country with the strongest trade growth forecast.”

DHL noted that the predicted worldwide deceleration of trade growth was attributable to expected declines in both containerized ocean freight and international air trade after the impressive peaks scaled during 2018 with World Air trade scoring 60 in November, down from 62 in September, and World Ocean Trade scoring 61, down from 63 two months earlier.

“South Korea is the only country whose growth forecast for ocean trade remains unchanged,” said the report. “In all the other countries, the outlook for ocean trade is declining.

“Furthermore, the air trade outlook is going down in every index country. With an eye to individual sector developments, Industrial Raw Materials contributed most to international trade growth, followed by Machine Parts and Basic Raw Materials. The weakest growing categories were Consumer & Household Goods, Capital Equipment and Machinery Parts.”

The UK’s performance was the weakest of the major economies covered.

“With a two-point decline and an index value of 56 points, Germany’s loss of trade growth momentum turns out to be moderate, too, compared to September,” said the report. “While the UK was able to keep its GTB index unchanged in the previous release, its growth forecast has now deteriorated noticeably by four points.


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