US imports shift from China to other Asian

countries
Change in sourcing patterns could be the beginning of a larger
realignment, according to analysts
Logistics
Market
North America
Sea Logistics
27 Apr 2023Sea news

Full-year 2022 export volumes have already started showing signs of friend-shoring, say analysts at
Xeneta.

"There is no question that current geopolitics is going to affect the market, whether it is globalisation or
just the general pattern of trade," said Xeneta chief data officer Erik Devatek. According to their
numbers, Far East to US imports did grow by 26% over five years; however, China had the lowest
growth, tying with Singapore.

"Although containerised imports from the Far East to the US were 26% higher in 2022 than in 2017 —
the last full year before the trade war started — an evolution in the balance of trade is clear," said
Xeneta market analyst Emily Stausbøll reported the JOC.

"Across the five-year period, China ties with Singapore for the lowest growth in imports, at just 7%. In
percentage terms, 'friendly' Vietnam was the clear winner, with a growth rate of 156%."

Besides volume shifts, Stausbøll says carriers are reacting to the volume increase from Asian countries
by ordering more flexible vessels that can be accommodated in Southeast Asia ports.

Along with carriers, exporting countries such as Vietnam and Cambodia are preparing for increased
export volumes by investing in infrastructure to offer a more attractive service. "Once developed, these
new ports will allow bigger ships to call, reducing the need for feeders and transhipments, thus
improving transit times while still offering economies of scale," says Stausbøll.
Although the data indicates the shift has begun, the process of friend-shoring is gradual. "It takes time
to build new production bases and make port infrastructure investments, as we're seeing in places like
Vietnam, Cambodia and Singapore, so the impact of investments today won't be fully appreciated until
tomorrow. This implies that the changing trade patterns we're seeing now could just be the beginning of
a far greater realignment," emphasises Stausbøll.

China will remain a manufacturing powerhouse, but geopolitical tensions will drive importers to seek
more 'friendly' and secure suppliers. According to Stausbøll, further developments will depend greatly
on developing tensions between China and Taiwan. For now, China's exports to Europe are stable, but a
major conflict could change this, concludes Xeneta.
Source: Shipping Watch, Lloyd's List