Container shipping congestion declines
According to data from the Kiel Trade Indicator, there is less congestion in the world's container shipping as global trade volumes decreased by 0.8% in October.
10% of all international shipments of commodities are congested.
The indicator showed no change in import levels for the US, the largest economy in the world, but a fall of 2.7% in export levels.
Germany, the largest economy in Europe, saw a decline in imports and exports of 0.2% and 0.9%, respectively. For the EU, trade in October showed little change, with imports remaining unchanged and exports increasing 1% on a monthly basis.
China, with the largest economy in Asia and the largest population in the world, stood out as a glaring anomaly. It revealed a sharp increase in exports but no discernible change in import levels (0.9%). (10.1 per cent).
Even though this development is not equally spread across all nations, the direction of global commerce is uncertain. German exports have been moving sideways in price-adjusted terms for several months now, indicating that the challenging economic climate is clearly having an effect on German exporters, according to Vincent Stamer, head of Kiel Trade Indicator.
"China's export growth in September is a positive outlier in world trade," said the author. It remains to be seen whether this signals a relaxation of China's strenuous zero-Covid policy and whether it portends a long-lasting upward trend for Chinese exports, according to Mr. Stamer.
Due to labor disruption in the industry and the Covid-19 pandemic, many cargo customers struggled to find shipping containers, highlighting significant challenges in the logistics sector. Congestion and delays at ports, a shortage of containers, and a sharp increase in the cost of shipping goods are all results of the severe supply chain bottlenecks.
The second quarter of 2022 saw a continuation of growth in the global goods trade, according to the World Trade Organization's Goods Trade Barometer, which was released on August 23. However, the pace of growth was slower than in the first quarter and is likely to remain weak in the second half of the year.
In an April report, the WTO predicted that the conflict between Russia and Ukraine could reduce global GDP growth by 0.7 to 1.3 percentage points, bringing it to between 3.1% and 3.7% in 2022.
The western nations' sanctions are having an effect on Russia's trade volumes on a monthly basis. Kiel Trade Indicator data show that in October, exports and imports decreased by 2.6% and 0.4%, respectively.
Russia imported roughly 24% fewer goods per month than in 2021, according to an analysis of exports from 57 countries and regions, including the EU and China, to Russia for the months of June, July, and August. The average monthly import shortfall is $4.5 billion.
According to Kiel, freight rates from China to Northern Europe have decreased by about two thirds since the beginning of the year. Prices for a standard container are below $5,000 for the first time in about two years.
"The significant decrease in freight costs is a boon to international trade and, consequently, to the German economy. Low transportation costs may help allay concerns about a recession in exporting industries if rates stay low and global shipping congestion continues to decrease, according to Mr. Stamer.