NORTH CHINA: CONTAINERPORT DEVELOPMENT
NORTHERN CHALLENGES A J Keyes assesses the position of North China containerports against a background of economic uncertainty and reviews the performance and development strategies of the key players
8 Tianjin is now engaged in the phase II development of its new zero carbon terminal
Collectively, the ports in the North China region are seeing stability in container volumes handled, with 52.6 million TEU for 2019, 51.1 million TEU in 2020 and 52.9 million TEU for 2021. This nevertheless represents a declining share of the total China container port market, which was 22.8 per cent in 2019, but dropped to 21.8 per cent in 2020 and then a larger decline to 18.7 per cent for 2021, as Figure 1 shows. While this situation would be acceptable in most developed ports, this represents a real slowdown in the context of China and reflects growing economic uncertainty in the Chinese heavy industry sector. Heavy industry in China is primarily located in the north of the country with Central and Southern ports increasingly focusing on supporting consumer goods and manufacturing hubs. The 2021 northern container port volume is concerning because there was some volume growth (albeit much lower than compared to other ports in the country and China overall) and underlines the real issue in the north – the continued decline of Dalian. This is shown in Figure 2, which clearly highlights the continued improvements in total container throughput at Qingdao and Tianjin, but the decreases at Dalian. According to one local forwarder, who did not wish to be named, the reality is that the North China region has been losing “around one million TEU of cargo year-on-year up to 2021, but the south/central area has generated increases of up to four million TEU per annum.” LOCKDOWNS – LIMITED IMPACT Port lockdowns have been, and continue to be, commonplace throughout China during 2022 as Beijing maintains its Zero Tolerance policy in conjunction with COVID-19. Numerous examples exist, notably the recent two-month lockdown of Shanghai port (and city) and similar examples in Shenzhen (which stopped all cargo supplying Hong Kong) and Yantian. In the North China region Tianjin has seen recent
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lockdowns, including in the Heping district in late May 2022, while production challenges for both Toyota Motor Corp. and Volkswagen AG have continued, plus the Omicron variant reportedly became more prevalent in Beijing, resulting in further restrictions. Yet based on available data for 2022, there has been little negative impact on North China ports. For example, in the January to end of April 2022 period, Qingdao handled 8.04 million TEU which represents a 7.1 per cent increase over the same period in 2021, while Tianjin is up by 2.9 per cent (to 6.45 million TEU) and, surprisingly, Dalian also saw a strong improvement of 12.8 per cent to 1.24 million TEU. These volumes through Dalian are, of course, significantly lower than those that the port has handled in the past, but may be the first steps in stopping the decline. During 2021, Dalian Port (PDA) Company Limited successfully merged with Yingkou Port Liability Co., Ltd. via a joint agreement between China Merchants Group and the People’s Government of Liaoning Province. It was reported at the time of the merger that a key objective is: “to increase the resource allocation efficiency and market competitiveness…” DALIAN STRATEGY If container traffic increases continue during 2022, in line with the first four months, then the merger and its associated goals may indeed be having a positive effect. Moreover, with constant lockdowns occurring more frequently in the Central/South areas, such as Shanghai, and continuing to negatively impact production of industries there, then the north may gain market share because it has been subject to much less turmoil caused by COVID-19 policies. Indeed, the continued lockdowns enforced by Beijing on Shanghai continue to impact the supply chain networks supporting the port and, therefore, foreign trade activity. China’s insistence on its zero-COVID-19 policy continuing
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