The desire of Western countries to relocate parts of their manufacturing out of China is hindered by the lack of port capacity in India and Southeast Asian countries to handle large container ships.

The current Asian setup, where most export goods are produced and shipped from China, makes it difficult and expensive to change.

The Financial Times reports that Western importers have considered relocating some production out of China due to geopolitical tensions with the United States.
However, significant investment in Indian and Southeast Asian ports is necessary to make this happen.

China has 76 container terminals, each capable of handling vessels above 14,000 TEU, while other Southeast Asian countries such as India, Vietnam, South Korea, and Bangladesh have only 31 terminals in total.

The Financial Times cites data from analytics firm Qianzhan Industrial Research, indicating that China has invested at least US$40 billion in expanding and modernizing port infrastructure between 2016 and 2021.

Significant investment is required in ports located in competing countries, and even then, it will take some time before they can match the capacity of Chinese ports.



Source: ShippingWatch