Trade dip hurts cargo forecasting

Hutchison Port Holdings Trust Hutchison Port Holdings Trust says the international trade slowdown has four believed causes. Credit: Hutchison Port Holdings Trust
Industry Database

Slower international trade and further structural changes to container shipping lines is making forecasting cargo volumes “challenging”, Hutchison Port Holdings Trust has said.

Publishing its 2018 financial results, the trust said the forecast international trade slowdown is believed to be due to a slowing Chinese economy, mainly because of Government policy to address growing debt; a slowing EU economy; the lack of a deal for the UK’s withdrawal from the EU and its effect on business sentiment; and uncertainty as to whether trade negotiations will result in the normalisation of US/China trade.

With regards to US/China trade it noted: “Regardless of the outcome of the negotiations, there is a risk that long established supply chains in southern China will be altered over time to the detriment of HPH Trust.”

Multinational behavioural changes

The Group has recognised non-cash impairment losses of HK$12,289m. This is in the context of “mounting global trade uncertainties” and “behavioural changes in multinational corporations caused by the current trade tensions, including accelerating the diversification of production bases outside of China and the effects stemming from the structural changes within the shipping line industry.”

More structural changes to container shipping lines are anticipated, stated the report, but further cost sharing alliances are not expected.

It stressed that the advance of “mega vessels will continue necessitating investment in port equipment and processes by deep water port operators handling these vessels.”

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