Will China’s Slowdown Put the Brakes on U.S. Trucking?

The recent economic slowdown in China could have negative implications for container ABS transactions, according to Fitch Ratings.  

It could also impact the North American trucking marketing.

Container utilization and lease rates in outstanding transactions could come under pressure if China’s manufacturing sector continues to decline and the country enters a long-term recessionary environment with slowed GDP growth.

Recently, China’s GDP growth decreased to 6.9% in the third quarter, the first time reporting below 7% since 2009. The International Monetary Fund (IMF) also recently lowered global growth forecasts for 2015 from 3.3% to 3.1% as a direct result of China’s increasingly stagnant growth, highlighting the importance of China’s role in the global economy.

China’s importance to shipping is significant.

Its ports account for over one-third of the world’s containerized traffic.  China’s largest container shipping line, also recently announced declines in cargo volumes and revenue declines of 9%. With global shipping lines already struggling in recent years, China’s slowdown could increase lessee default risk.

And all of that means that a slowdown in China could definitely put the brakes on North American trucking.

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