Trade Imbalances

Trade imbalances are when one country or region imports or exports to another country or region significantly more than they get back from the same area. The trade lane is more one way and this can create problems for the companies involved. It can especially be tough on an international shipping line. Shipping lines rely on give and take to keep the flow of goods running smoothly. If one country is exporting a lot but not importing then the shipping line will be struggling to keep shipping containers moving as well.

When there is an imbalance, freight shipping companies need to work harder to make more money off the loads to that region. They may need to change their routes, adjust transit times and even offset costs by increasing freight shipping rates. One of the biggest imbalances right now is with Asia. Much more merchandise is shipped out of countries like China and Japan than they are able to import in. Americans in particular import much more from them than they are able to send back in other goods. These companies have found that the cheaper labor offsets freight shipping costs even with additional charges from trade imbalances.

When there is an imbalance in trade, each side must work together to keep the flow of goods moving. This can be difficult since shipping companies are always looking to reposition empty containers without losing money and importers are always trying to get the lowest rates to ship their goods. The only way to end the cycle is to get the two regions to work together to change trade and be better balanced.