A newly launched trade pact in Asia is helping to fuel an increase in intra-Asia container volumes for carriers and logistics companies since taking effect in January. The 15-member Regional Comprehensive Economic Partnership (RCEP) created the world's largest trading area with combined GDP of $30 trillion and includes China, Japan, South Korea, Vietnam, and Thailand; the pact will eliminate tariffs on 92 percent of members’ products.
“In the past six/seven months our volumes have grown by more than 30 percent due to the impact of RCEP,” Danny Hoffmann, managing director of Hong Kong-headquartered Gold Star Line, told JOC.com. “Our competitors are also increasing their capacity in the region to cater for the growth in volume.
“The biggest impact has been on agricultural and food products, which experienced the fastest growth among all commodities,” Hoffmann added. Gold Star is the intra-Asia affiliate of Zim Integrated Shipping Services.
“I am hearing from the lines that customers are intentionally shifting cargo from Hong Kong to RCEP countries because of the benefits they can achieve,” Roberto Giannetta, chairman of the Hong Kong Liner Shipping Association, told JOC.com.
Hong Kong, which applied to join RCEP in January, could become a member in mid-2023, Willy Lin Sun-mo, chairman of Hong Kong Shippers' Council (HKSC), told JOC.com.
Cosco Container Lines said it started to transship cargo from Haiphong in Vietnam to Qinzhou in southwest China starting July 23 after customs tariffs and controls on food products were relaxed due to RCEP.
Saigon NewPort has seen patchy results since RCEP took effect because exports and imports via China, the port’s biggest market, had been hit by COVID-19 lockdowns.
“We and our customers had high very hopes for an increase in cargo volumes this year due to RCEP, but since lockdowns in China [the] volumes have fluctuated,” Vu Phuong Chi, Saigon NewPort’s marketing executive, told JOC.com.
She said shipments to China of footwear, chemicals, plastic-related products, vegetables, and seafood have all increased, but rice, garments, cashew nuts, and leather products have fallen.
Nick Xu, Rhenus Asia Pacific’s regional director/key accounts management, said while it's difficult to isolate the impact RCEP is having on container volumes, the pact is partly responsible for a fall in volumes from Asia to Europe, the Mediterranean, and Africa.
“There’s a downward trend on the Asia–EMEA trade partially due to RCEP because it is encouraging countries in the region to trade more with each other,” Xu told JOC.com.
“We expect RCEP will help drive intra-Asia container volumes in the long term, as manufacturers continue to integrate their supply chains within Asia to take advantage of the lower tariffs and red tape,” Khai Tou Chan, Hapag-Lloyd's senior director/trade management, told JOC.com.