The last few weeks have brought news of turmoil in China, including currency devaluations, an economic slowdown, and a stock market plunge. Most economists, including those at the the IMF, think it is premature to talk about an economic crisis. While I agree, I nonetheless believe that the slowdown is due, in part, to an acceleration of “near-shoring,” the practice of producing closer to the customer.
Egypt has opened a second lane to the Suez Canal amid much fanfare. The US$8 billion dollar expansion adds 35km of new channels to the existing canal and another 35km where existing bodies of water were dredged to make way for larger ships.
To remain competitive and have any hope of returning to consistent profitability, mid-sized container shipping lines need to undertake a deep-rooted internal transformation and form alliances. According to a report released last week by Boston Consulting Group (BCG), around $1bn of savings could be shared by partners in each “midsize alliance”.
At their best, Arctic shipping routes connect the world’s largest economies in the Atlantic and Pacific via more profitable, shorter, faster and thus more environmentally friendly trade routes than conventional shipping lanes. Arctic shipping can cut distance between Shanghai and Europe by up to 40 percent, and in this decade vessels transiting through the Northern Sea Route (NSR), by the shores of Russia, have gone from four in 2010, peaking at 71 in 2013 and down to 31 in 2014.
The transportation of containers by rail could grow substantially in China, especially if the nation continues adopting the kind of operating practices and regulatory reforms that have boosted the development of the North American rail network, according to a new World Bank research paper.