BULLETIN : NINGBO PORT OPERATIONS DISRUPTION : VIETNAM PORT CONDITIONS : USA PORT CONDITIONS

China : Ningbo

Overstretched global supply chains face the risks of further disruptions after an employee at one of the world’s busiest cargo port tested positive for COVID-19. Operations at China’s Ningbo-Zhoushan port have been thrown into crisis after a 34-year worker tested positive for the virus, a development that could instigate worsening global supply chain disruptions as port authority and health officials seek to contain further spread.

Reports from the Ningbo-Zhoushan port in east China’s Zhejiang Province indicate that all close contacts of the employee have been quarantined, with the sites involved suspending work and being disinfected. There are also reports that port authorities are turning away ships.

While Shanghai is China’s busiest container port, Ningbo-Zhoushan is the second-busiest container port, and measures taken could further impact vessel schedules. The impact of vessel delays is by far the largest single element causing the severe capacity shortage and exponential elevation of current freight rate levels.

Emergence of COVID-19 case comes when China is tightening COVID-19 measures following the resurgence of the pandemic across the country, with eastern provinces being the worst hit. The resurgence in infections is being attributed to the highly transmissible delta variant. To contain the spread, China has ordered mass testing, with port authorities also required to ensure ship crews and port workers are also tested. Shipping companies and industry stakeholders are warning the latest COVID-19 outbreak in China risks exacerbating an already worse situation in global supply chains that is grappling with port congestion, container shortage and rising costs, including service disruption surcharges being imposed by shipping lines.

COVID-19 disruptions at Ningbo-Zhoushan port is likely to have substantial ripple effects on global trade owing to the fact that it is one of the busiest ports in China. The port operates 260 container shipping routes, including over 100 routes servicing the Road and Belt initiative.

In May and June, the port of Yantian experienced a surge COVID-19 cases that took a month to fully control. During that time containers piled up and ports across the region became backlogged. There were also significant impacts on all the major carriers with extended wait times or ships rerouting skipping calls in the region.

It is somewhat heartening to note it is a single case and authorities have been quick to react. We can hope the impact, as was seen in Yantian, will not be of the same level of menace or longevity.

Vietnam

Vietnam continues to experience soaring cases of COVID-19 causing ships to back up in large numbers with vessels being turned away. Container availability shortages are mounting with ports experiencing labour shortages on the docks along with trucker shortages. Factory output has slumped and COVID woes continue to spread to the central region as larger outbreaks are reported. The Port of Quy Nhon is in lockdown and outer anchorages in the north have vessels waiting in anchorage. Vessel schedules are changing to accommodate the conditions but predictions are current space and rate levels will worsen through the back end of the peak shipping period, with no relief until 2022.

USA

Ports in USA continue to struggle to process the volume of Peak season arrivals. ILWU (International Longshore and Warehouse Union), dockworkers, truckers, and rail workers continue to handle record numbers of containers. Rail connectors that lead out of the twin-port complex continue to be strained. Once again, the number of container vessels are backing up at both gateways and inching up to record levels. Current anchorage wait times are as high as five (5) days which continues to create havoc on carrier schedules and extends delays to unload cargo.

All in all, the disruptions and halt to operations from the start of the Pandemic has led to a perfect storm on a global scale. This has resulted in ongoing disrupted carrier schedules for both air and ocean, and this is driving the current record levels of freight rates coupled with highly contested space conditions. Each time there is a negative global event it contributes further to the delays and to the projected longevity of these conditions. It was always forecast for these conditions to be impossible to recover from prior to Q1 2022 and as each event unfolds it looks likely to seep into Q2 and beyond of 2022.

Our account managers are working tirelessly at origin to secure space and procure freight rates for your cargo on an individual booking basis. We will continue to seek the best solutions possible for your cargo and business requirements.

Should you have any queries relating to a particular shipment please contact your account manager directly.