China's exports rebounded strongly in March, rising by almost 15 percent over the previous year.
That number — 14.8 percent — was published Wednesday by Container xChange, an online container logistics company based in Hamburg, Germany.
Also, for the first quarter of 2023, the General Administration of Customs of China reported that exports reached $821.8 billion, a 0.5 percent increase over the same period in 2022.
The rebound in China's exports can be attributed to factories operating at full capacity to fill accumulated orders. Following China's coronavirus outbreak, inventories were depleted, but the Shanghai Containerized Freight Index rose for three straight weeks in April, which last happened in June 2022.
There also has been strong demand for new/alternative energy vehicles, lithium batteries, and solar cells, which are often shipped via specialized vessels known as roll-on/roll-off (roro) carriers rather than standard containers.
Additionally, bulk cargo such as steel and refined oil is typically transported using dry bulk carriers and tankers, eliminating the need for containerized shipment.
As a result, there has been a buildup of empty containers in Chinese ports, due to the type of goods being exported and their delivery method.
"Despite these positive indicators, there are still challenges in the shipping industry. The volatility in container prices has significantly reduced globally, suggesting stabilization in the market. However, many empty containers are accumulating at Chinese ports, pointing to underlying issues and weaker demand," said Christian Roeloffs, co-founder and CEO of Container xChange.
"The exact reasons behind this phenomenon are complex and involve various factors, including the mismatch between the types of goods exported and container shipping methods used. This paradox highlights the complex challenges faced by the shipping industry and the resilience of China's international trade," he added.
The drop in e-commerce globally has also impacted the shipping industry adversely. Although China's exports have rebounded, the growth in global e-commerce has slowed in recent years.
According to Insider Intelligence, the growth rate of global e-commerce has steadily declined from above 20 percent in 2015 to 7.1 percent in 2022. The forecast for 2023 indicates a slight increase to 8.9 percent.
While shipping companies operating ro-ro vessels experience growth and profitable freight rates, most shipping companies continue to suffer from weak demand. The increase in shipping rates from Asia to the US East Coast, along with falling spot rates on US routes, has influenced the recent stability in China's exports.
However, given the current geopolitical friction between China and the US, that stability could face challenges. Still, Chinese ports remain popular trading locations, and the major seaports are even opening new container shipping routes to expand capacity and increase market share. In the first quarter, Shandong province launched 13 new shipping routes bound for Europe and the Americas.
Intra-Asia trade has shown resilience, surpassing Asia-Europe and Asia-US trade. Despite declining consumer confidence in the EU and North American markets, overstocked retail inventories, and the collapse of ocean freight rates last year, the intra-Asian economy has proven to be more robust.
East Asia emerged as the only region with a positive quarter-to-quarter trade growth rate in the third quarter of 2022, according to the United Nations Conference on Trade and Development.
China's trade with the Association of Southeast Asian Nations (ASEAN) has seen substantial growth, with shipments increasing by 35.4 percent year over year. The emergence of the China-Southeast Asia trade partnership highlights the economic potential and mutual benefits for both China and ASEAN countries.