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(Yicai Global) Oct. 28 — Chinese auto exporters are being challenged by a shortage of space on Roll-on Roll-off ships, which are specialized cargo vessels for wheeled vehicles, preventing them from meeting booming overseas orders.
Since last year our export orders have been limited to the amount of vessel space we can find despite big demand overseas, a person responsible for the international operations of a Chinese vehicle maker told Yicai Global.
“I worked through this year’s week-long National Day holiday at the start of the month to find space for our car exports,” another person in charge of a Chinese car manufacturer’s overseas business said. In the end I could only find enough space to ship a few hundred autos, when we have export orders for several thousand, he added.
“We have overseas orders for almost 5,000 cars a month but can only deliver between 2,000 to 3,000 units due to a lack of shipping space,” the person said. “As a result, we are having to delay our exports.”
Some 179,000 cars were exported from the Port of Guangzhou in the first 10 months, double that of last year, an executive at a Chinese port told Yicai Global.
Exports have never been so good in my 20-plus years in the industry, said Zhu Guihua, general manager at Guangzhou Yuanhai Car Shipping. “But an executive at a state auto firm tells me that international shipping firms only ship their products once a year, stifling their development of overseas markets.”
The reason behind the bottleneck is that there are a limited number of RoRo ships available. China only has around 10 that are suitable for long-distance travel, an executive at logistics service provider Beijing Changjiu Logistics Corp. said in August. There are about 700 ships such vessels worldwide, of which 80 are in China.
And the strong demand is pushing up fares. Long-distance sea freight rates on RoRo carriers have shot up between four-fold and five-fold, another person responsible for RoRo vessels at a large Chinese port told Yicai Global. Fares are now between USD120 and USD150 per cubic meter when in previous years they were around USD30 per cbm.
A new auto shipping joint venture set up by a unit of shipping giant China Cosco Shipping Corporation is attempting to find a solution. It is ordering more RoRo ships and adapting other ships into car carriers. But basically, although the JV aims to improve coordination between the supply and demand sides, any new RoRo ship orders placed now will only be delivered after 2027, Zhu said.
As a result, industry insiders do not expect the situation to improve within the next two to three years.
Chinese carmakers exported 2.1 million vehicles in the first nine months, a year-on-year increase of 55.5 percent, according to data from the China Association of Automobile Manufacturers.
Editors: Tang Shihua, Kim Taylor