Freight shipping is extremely sensitive to the demand for Chinese goods, which is in turn driven by the global economic climate. After a rough five years due to the 2009 global slowdown, IBISWorld expects the industry to turn around. Increasing trade with developing markets in South East Asia will be key to this recovery.
Los Angeles, CA (PRWEB) April 01, 2012 The Freight Transport by Sea industry in China is mainly engaged in shipping exported items to their destination countries and territories from China. Therefore, industry performance is extremely sensitive to the demand for Chinese goods, which is in turn driven by the global economic climate. Over the five years through 2012, industry revenue has been falling at an annualized rate of 3.1%, according to IBISWorld research. The decline was largely due to the global economic recession in 2009.
The top four freight transport operators–China Ocean Shipping Group, China Shipping Group, SINOTRANS / CSC Holdings, and Hosco Group–are all state-owned and account for 68.4% of total industry revenue, estimates IBISWorld. International freight shipping is reliant on high investment into fixed assets like ships, and its business has economies of scale. Therefore, government capital plays a dominant role.
IBISWorld anticipates that further appreciation of the Chinese yuan will limit export growth, and therefore, industry growth. 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 South East Asian Nations. After a five-year period of decline, IBISWorld forecasts that the Freight Transport by Sea industry in China will once again experience growth.
For more information, visit IBISWorld’s Freight Transport by Sea in China industry report page.
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IBISWorld industry Report Key Topics
Businesses in the Freight Transport by Sea industry in China provide cargo transportation services between China and other countries, including leasing ocean-going freighters equipped with operators. This industry only includes businesses that make trans-oceanic journeys using ships of Chinese nationality. Passenger delivery and coastal freight transportation are excluded.
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