While H1 2012 statistics confirm that China’s economy is currently slowing down, the country remains a key growth market for the European container shipping and logistics industries. 

Confirmation of that point appears in a recent European Commission report which states that China is now established as the EU’s second-largest trading partner, behind the US. It says EU imports from China in 2011 totalled €292 billion, up 3% on 2010, and EU exports to that Asian country were valued at €136 billion, up 20%. 

Reflecting the size of those figures, forwarders and other logistics providers spoken to by Lloyd’s Loading List.com over the last month generally appear still optimistic about prospects for the Europe/China market, although some also admit they are currently seeing signs of a slowdown in business growth. 

“Salary bills in China are increasing at around 10% a year at the moment and in time it will not be as economical to source from China as it has been to date,” comments Gary Waller, Chairman of UK-based Alliance Group whose core business in that market is ocean freight FCL and groupage import traffic.

“From our standpoint, though, we see nothing other than China continuing to be a business growth area. Most of our new inquiries relate to imports from China.” 

One particular area of development when it comes to Alliance’s Chinese import business into the UK, adds Waller, has been a growing demand from customers for consolidation of traffic to reduce cost. 

“For example, we have one major UK client which sources from about 60 different locations in China. Through our Chinese office, we move everything to one particular point in China and then load it all into a dedicated container or containers on a daily basis for shipment direct to the client’s premises.” 

Alan Burnet, Procurement and Ocean Director for global forwarder DSV Air & Sea in the UK, is slightly more cautious about future China-Europe market prospects. “Our ocean freight TEU traffic in the westbound trade from China is currently up but only by 2-3% and I think quite a lot of that is down to new business gains rather than growth from established sources. Existing business does seem to be in slight retreat, mirroring what is happening in the high street,” he states. 

In China itself, Thomas Pan, Shanghai-based Managing Director, North Asia, for Menlo Worldwide Logistics, which last year grew its China logistics business revenue by 23% and new business pipeline by 70%, said that while the momentum achieved by the company in 2011 had carried through into this year, longer-term general market prospects were less certain. 

“Right now, we are greatly ahead of budget as far as our Chinese business is concerned and we see no problem achieving our plans this year. However, with the sluggish data on the Chinese economic front, we are currently finding it difficult to make a budget for next year,” he states. 

“China used to be very export oriented but is now refocusing its economy from the external to the internal, in other words, becoming basically consumption driven. So we need to revisit Menlo’s strategy for developing its logistics business in China to see how to fit into the changing macro economic situation there.” 

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