Is the global shipping industry prepared to tackle the escalating regional trade imbalances that have surged by 33% since 2019?
In the intricate dance of global trade, balance is key. Yet, recent data reveals a significant tilt in the scales. Since 2019, the global container market has expanded by 8%, reaching 183.2 million TEU (Twenty-Foot Equivalent Units) in 2024. However, this growth has been anything but uniform. Regional imbalances between exports and imports have ballooned by 33%, escalating from 58.8 million TEU in 2019 to 84.9 million TEU in 2024. This disparity now represents 70% of inter-regional trade, up from 52% five years ago.
The Epicentre: East & Southeast Asia
Leading this imbalance is the East & Southeast Asia region. In 2024, this area recorded an imbalance of 42.4 million TEU, a sharp rise from 29.4 million TEU in 2019. To put it into perspective, for every TEU imported, the region exported three. This surge is primarily driven by a rapid increase in exports from East & Southeast Asia, which have grown by 10.9 million TEU since 2019. In contrast, the total inter-regional market expanded by only 9.5 million TEU during the same period.
Compounding the issue, imports into East & Southeast Asia decreased by 9% in 2024 compared to 2019. This decline has led to a reduction in exports from regions such as Europe & the Mediterranean and North America, further exacerbating the global trade imbalance.
North America’s Growing Disparity
Historically, Sub-Saharan Africa held the title for the largest relative trade imbalance. However, in 2024, North America took the lead, importing 2.5 TEU for every TEU exported. In comparison, Sub-Saharan Africa’s ratio stood at 2.3:1. The Europe & Mediterranean and South & Central America regions also experienced widening imbalances, while Oceania, Sub-Saharan Africa, and the Indian Subcontinent & Middle East saw slight improvements.
The Broader Implications
Between 2012 and 2020, overall inter-regional trade imbalances fluctuated within a 48-53% range. However, a notable shift began in 2021, coinciding with an 11% surge in exports from East & Southeast Asia. By 2024, exports from these regions were 21% higher than in 2019, while the total inter-regional market grew by only 8% during the same timeframe.
These growing imbalances present significant challenges for liner operators. Disparities within regions and specific imbalances for particular container sizes and types influence the costs associated with repositioning empty containers. To manage the increasing demand on major trade routes, operators are compelled to deploy more and larger ships, often facing limited revenue opportunities on return journeys.
“The increase in trade imbalances has been driven by faster export growth from East & Southeast Asia compared with all other regions except Sub-Saharan Africa.” – Niels Rasmussen, Chief Shipping Analyst at BIMCO
Consider a major shipping line operating between East Asia and North America. The company dispatches fully loaded vessels from China to the U.S., but due to the trade imbalance, struggles to find equivalent export cargo for the return trip. As a result, ships often return with empty containers, leading to increased operational costs without corresponding revenue. To mitigate this, the company invests in logistics solutions to reposition empty containers efficiently and explores alternative markets to balance cargo flows.
