Report says emerging SE Asia markets key to industry recovery

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After a five-year decline, the sea freight industry in China will once again experience growth, buoyed by growing trade with Southeast Asian nations, forecasts a U.S.-based market research firm.

The global cargo shipping industry is extremely sensitive to the demand for Chinese goods, and China’s industry is in turn driven by the global economic climate, said IBISWorld in a press release dated April 2.

It added that over the five years through 2012, China’s shipping industry revenue has been falling at an annual rate of 3.1 percent, largely due to the global economic recession in 2009.

Looking forward, further appreciation of the Chinese yuan will limit export growth and, therefore, industry growth, IBISWorld added. Also, an increase in the domestic prices of gasoline and diesel oil will lead to narrower profit margins, as fuel costs take up a large proportion of total costs.

“However, these negative factors will be offset by increasing trade with emerging markets, like the countries in the Association of Southeast Asian Nations,” said the Los Angeles-based research group.

At present, China’s top four freight transport operators China Ocean Shipping Group, China Shipping Group, Sinotrans/CSC Holdings, and Hosco Group—all state-owned—account for 68.4 percent of the country’s total industry revenue, estimated IBISWorld.

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