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China tariff effects started showing up in shipping data months ago

China tariff effects started showing up in shipping data months ago

Shanghai : China’s latest report on economic growth fell short of expectations, but for those who monitor traffic on the global water highways, the news was not a surprise.

In fact, freight and shipping data over the last several months have been pointing to such a slowdown.

An investor can get an idea of a country’s economic health based on the types of products and the number of containers being shipped to and from its ports at any given time. About 90 percent of the world’s trade in goods is transported in containers on ships across oceans, making maritime activity a key economic indicator.

It is also an important indicator for companies like Walmart, the giant retailer that depends on shipping the products it sells from overseas.

A previous economic slowdown in China started showing up in the shipping data six months before other people noticed, said Gerry Wang, the co-founder and former CEO of Seaspan (SSW), the world’s largest container shipowner. In a 2012 interview, he said his business had a unique window on global economic activity. “We are involved in everything from commodity trades, manufacturing and consumption,” he said then. “Our volume is 200 times more than parcel carriers FedEx, DHL or UPS. Ninety-nine percent of all the goods you see at Walmart are shipped via container ship.”

The Trump administration’s tariffs on $34 billion in Chinese goods went into effect in July. For weeks before that, there was a huge push to import products ahead of the tariffs. Container trade between China and the U.S. from April through June grew 10 percent year over year based on Accenture’s analysis of the Department of Commerce import and export data.

This was the container trade in the commodities on the list of tariffs that went live in July.