Nikos Tagoulis, head of the research department at Intermodal, has analyzed the trends of car exports from China and their impact on the transportation market. According to his assessments, China, as a key player in the automotive supply chain with significant capacities, is expanding its exports to Europe and Latin America.
China's Dominance in Rare Materials Production
Tagoulis noted that this expansion of exports is due to China's integrated and strong supply chain in the fields of mineral processing, battery production, electric motors, and car assembly. According to statistics from the International Energy Agency (IEA), China holds 91% of global production of rare materials related to magnets, 94% of permanent magnet production, and over 80% of battery cell production. This dominance provides Chinese automakers with significant advantages in terms of cost reduction and economies of scale.
Transportation Challenges and Market Demand
Tagoulis also pointed out the existing challenges in the transportation sector, stating that the increasing volume of exports has profound effects on the demand for car transport. Long-distance transportation of cars from China to Europe and Latin America creates a high demand for truck-miles. Additionally, limited backhauls and deviations from the Cape of Good Hope route have lengthened journeys, consequently keeping ships busy and reducing effective access to the fleet.
Currently, the one-year charter rate for car carrier ships with a capacity of 6,500 CEU has steadily increased to about $95,000 per day by September 2026, which is 43% higher than the average for 2026 and 21% higher than the five-year average.
Tagoulis added that due to the limited capacities of ships, Chinese exporters are exploring alternative transportation solutions that create new opportunities for container ships and MPP units. Specialized racking systems allow for the transport of two to four passenger cars in a standard 40-foot container. For example, COSCO arranged three container shipments totaling 13,052 cars from China to Europe in 2026.
However, these movements are still considered marginal and have little impact on the demand for container and MPP tonnage.
Furthermore, the Intermodal analyst noted that high revenues and a shortage of ships have prompted a significant response from suppliers. New contracts for PCTC ships increased to 82 vessels in the first nine months of 2026, while this number was only 9 vessels for the entire year of 2025, and the ten-year annual average is 35 vessels.
Due to this increase, the order-to-fleet ratio has reached 26%, which is above the historical average of 14%, raising concerns about oversupply in the future. However, 64% of the tonnage orders are scheduled for delivery from 2028 onwards, which helps to limit immediate supply pressure.
Finally, Tagoulis also mentioned the trade political challenges in Europe, noting that in October 2026, the European Union and China reached a preliminary agreement on proposed restrictions for hybrid and conventional vehicles made in China. These restrictions could significantly limit export growth in the China-Europe corridor.
Overall, despite positive forecasts for Chinese exports and long journeys, challenges such as increasing ship deliveries and trade barriers could gradually impact market stability.
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