China’s Restrictions on Waste Imports Could Impact Backhaul Trades
As of March 1st, this year, China has declared it will no longer be accepting imports of unsorted waste material. This could lead to container shipping lines losing up to 5m TEUs of cargo per year due to this along with bans on other recyclable waste materials.
A Growing Problem
With China putting heavy restrictions on a wide range of waste products, the US, Japan and Europe are struggling to find an alternative solution. Not only is this creating a space problem for these countries, ocean carriers are missing out on the large volume of backhaul that Europe and North America send to China.
Imported Waste Stats
- In 2016, China imported some 8m tons of waste plastic and 30m tons of waste paper
- 13.2m tons of paper came from the US, representing ⅔ of total waste paper
- Roughly half of westbound transpacific backhaul volume is recyclable waste
- 500,000 TEUs were in unsorted paper imports, which are among the products that will no longer be accepted
- 2m TEUs were sorted products and this type will still be accepted by China
- Drewry Maritime Advisors estimates this could lead to 3% loss of world loaded container traffic.
While this does represent a loss of business, waste is shipped at a lower rate than just about any other freight. It will be an adjustment but because of the low rates, it won’t be enough to seriously impact container shippers financially.
Additionally, as the Chinese economy grows, the country is increasing demand for goods that ship at higher rates. One such product is beef which Beijing recently lifted restrictions on. With China now accepting imports of grain-fed American beef, this will give the backhaul trades business to replace what is being lost from the ban on waste materials.