At the beginning of the year China has reported that its annual economic growth for 2015 is the weakest in 25 years. Country’s GDP has expanded by 6.9% in 2015, which aligns with the target set by the government, but is far from the previous year’s index. As Rebecca Wright reports in her article for CNN, China slowdown has hit global shipping industry.
Global shipping companies are concerned with the decline in global growth and, particularly, in China’s because it is the largest exporting country in the world, and are forced to take measures against losses they have already suffered and, most likely, are yet to suffer. Since the export and import amounts have decreased, many container ships stay in the ports, but the companies still have to spend costs on crews and maintenance. The experts predict even a bigger decline in the shipping industry which, in turn, will make shipping companies take more drastic measures to prevent further losses.
Shipping companies are the first to suffer from a global economic slowdown and decrease in export and import. The total ship capacity is too big for the amount of goods that need to be transported, therefore, shipping companies are likely to decommission some of their vessels and reduce the number of their employees, which can possibly increase unemployment rates.
On the other hand, decommissioned ships are likely to be the oldest and the most ineffective ones, so the overall quality of the shipment fleet will increase. The companies will have to find ways to modernize their ships in order to transport as many cargo as possible at one go and, thus, reduce the number of ships and costs spent on them. So, while the global economic decrease is indeed disturbing, it can also be a driving force for progress and optimization.
Works Cited
Wright, Rebecca. "Global Shipping Industry Takes A Hit From China Slowdown". CNNMoney. N.p., 2016. Web. 4 Apr. 2016.
