Research from Drewry Maritime Advisers has suggested that the ban on certain recyclable materials by China could cost shipping lines up to 4-5 million teu (twenty foot equivalent unit container) in lost business.
According to its research, the China ban on mixed paper and most plastic grades, will lead to the loss of 3% of global container trade.
However, shipping lines will not necessarily lose out, as rising exports to China of agricultural products such as beef, will help to fill the gap.
In an article on its website, Drewry said: “Unless there is a dramatic about-turn, carriers can kiss goodbye to those banned paper and plastics shipments. Drewry estimates that worldwide unsorted paper imports to China were in the region of 500,000 teu in 2016, while the still-legal other types of waste paper added another 2 million teu.
“Adding in the other lower-volume commodities affected by the new ruling, Drewry estimates that there could be as much as between 4-5 million teu at risk, equating to nearly 3% of world loaded container traffic.
“For the carriers, this development will not break the bank, as the ocean freight earned for backhaul waste shipments is extremely low. But they do at least provide some contribution, at least, to the costs of repositioning containers back to Asia.
“Clearly, volumes from the US and Europe to Asia will fail to reach the heights they could have without China’s decision, but all is not lost for the backhaul trades as other rising cargoes can help fill the gap.
“Chinese imports of beef, for example, have soared in recent years, reaching more than 800,000 tonnes in 2016 – compared with just 6,000 tonnes 10 years before – as rising incomes have boosted meat consumption and Beijing recently removed restrictions on the import of American premium grain-fed beef, which should provide a boost.”