Caixin
Aug 24, 2021 09:15 PM
BUSINESS

Covid Outbreaks Cause Logjams at China’s Busiest Container Ports

China’s ports are facing their most serious levels of congestion in the past seven years due to the partial shutdown of Ningbo-Zhoushan port, one of the world’s busiest container ports, due to aggressive coronavirus measures.

On Friday, 994 bulk cargo ships had been lined up to access 60 China ports, of which Ningbo and Shanghai are jammed up the most. This was more than double the number of 400 ships waiting in port queues in early August, according to Oceanbolt, a data company that tracks dry bulk commodities and shipping operations.

The Shanghai port and Ningbo-Zhoushan port rank as the world’s busiest ports in terms of container volume and cargo tonnages respectively. The Meishan terminal, which was closed for a mid-August Covid outbreak (in Chinese), handles 20% of Ningbo-Zhoushan’s container volume.

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Shanghai Port, although operating normally, has upgraded its restrictions on staff due to the outbreak in Ningbo. Front-line workers are not allowed to leave the port without undergoing 14 days of quarantine.

The unprecedented container traffic jam has pushed the Baltic Dry Index, which tracks worldwide bulk goods’ shipping and trade rates, to its highest peak since May 2020. It has risen 24% since early August and jumped to 4,092 points on Friday.

Shipping demand from Europe and America usually enters an off-peak season in August, said a source from Wisdom Marine Group, the largest dry bulk shipowner in Taiwan. But this year, the bulk shipping trade is still active.

Shipping capacity may face more pressure, given the newly-passed U.S. infrastructure bill, and China’s lower yields of summer crops may require more international imports, the source said.

Another source in the shipping industry agrees. While China’s ports are struggling with Covid-19 delays and recent typhoon activity, the country’s demand for grains, coal, and other raw materials has surged since June. So bulk cargo shipping rates are expected to remain high in September, the source said.

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China’s public transportation facilities are becoming more cautious about the spread of highly infectious delta variants, posing more stress to the global supply chain. In May, Yantian International Container Terminals, which deals with cargo at one of the world’s busiest container ports in Shenzhen, was shut down for a month.

Airports are also lengthening the amount of quarantine time for cargo personnel. A cargo industry insider told Caixin that freight companies are now struggling to find workers as a result of the change.

The latest shipping data compiled by Bloomberg on Monday shows that ships have resumed operations at Ningbo-Zhoushan’s Meishan terminal. While an official claimed the terminal was still closed on Monday, the data shows that at least five container ships have left the terminal in the past few days.

But there is a long way to go before port operations return to normal. On Wednesday, 55 container ships were waiting outside Ningbo-Zhoushan port, according to Seaexplorer, a logistics data platform owned by Kuehne+Nagel Inc. The waiting time is estimated to be at least two days.

Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)

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