Around 600,000TEUs are impacted with congestion at ports in China’s Southern region amid renewed COVID-19 restrictions. The crisis has continued to affect the shipping industry for over three weeks.
A resurgence of COVID-19 cases in the region has impacted ports, including Yantian. Many lines have started to reroute vessels to Nansha, Chiwan, and Shekou ports. Ships have been grounded due to quarantine restrictions. Shipping lines are also facing other challenges like getting stuck in canals and vessels dropping boxes.
MSC states over 300 of its vessels are likely to change the route and stay away from the Yantian port. Many other carriers could also divert vessels to other ports, causing delays in deliveries of goods, shortage of vessel space, and empty containers available globally again. Freight rates could also increase further, believe many.
Over 300,000TEU or equivalent of 160,000FEU’s to be exported, are waiting to get moved out of the Yantian port. The remaining 50pc of total impacted TEU’s are of a mix of import cargoes and import empty containers.
The world’s fourth-largest container port, Yantian International Container Terminals (YICT) released a statement about its operations being impacted. Yantian’s container yard utilization has dropped from 100pc to 70pc. It could take a couple of weeks for operations to return to normal.
The average waiting time is estimated at 16 days, while for the China containers exported to the US, the delivery period has increased by 42pc from last June. A shortage of equipment is expected to impact peak demand season in the US.
On the Asia-US West Coast route freight rates are at $6,600/ FEU, thrice compared to June in the prior year. On average, Asia-US East Coast freight rates are now at $9,800 per FEU, over 240pc higher than rates from the prior year.
Delays leading to the cancellation of orders could reduce sailing capacities for shipping lines despite improving demand.
The backlog is likely to have more impact on shipping than the accident in Suez Canal, where it stayed closed for six days after Ever Given container carrier ship blocked the runway. The Chinese port congestion has already affected twice the number of containers than in March when the Suez Canal remained blocked.