Congestion spreads and worsens in South China ports

A new cluster of Covid-19 cases in the region of its southern ports appeared this week to be having a deepening effect on shipping in the region and, potentially, on global trade in weeks to come.

IN the two weeks since the outbreak there were now reports that the scope of the disruption was beginning to exceed that which resulted from the blockage of the Suez Canal in March. The net result was likely to be further rises in already record-high container shipping costs.

The first containment efforts and restrictions at the port of Yantian were announced on May 25th. That slowed vessel arrivals and the loading of exports. The Covid-19 cluster then spread to the neighbouring port of Shekou, both in the Shenzhen province. This increased the delays and the backlog of ships outside the ports and cargo waiting to be loaded.

Port officials have said that they planned to keep quarantine restrictions and implement disinfection measures at least into next week.

In its latest customer bulletin Maersk has raised its forecast for delays to up to 15 days for goods moving through Yantian International Container Terminal (YICT). Median dwell times, with a high level of volatility, were approaching 18 days for containers waiting for loading. Carriers had been warning shippers that the ports were now restricting gate traffic to manage their growing backlogs.

Worryingly, the outbreak has also appeared in the industrial region in Guangzhou, to the northwest of Shenzhen, and thus impacting the port of Nansha, one of the fastest-growing ports in the region. It had been expected to handle some traffic diverted from Yantian.

As of June 7th analysis from project44 reported that 47 vessels were approaching YICT. A third of the vessels approaching Yantian were estimated to be suffering delays.