Are China’s Covid restrictions causing even more delays?
The Institute of Export and International Trade reported on 11th June China’s port restrictions were ‘worse than Suez’.
Capacity at major ports in China’s southern manufacturing hub is being pushed to the limit by tighter coronavirus controls.
Delays are spreading in the world’s busiest port cluster in Shenzen and Guangzhou as operators of most of the ports, including Yantian, Shekou and Nansha, plan to keep stringent disinfection and quarantine measures in place until next week at least. With reports from suppliers the cost of containers has increased by at least 11% putting strain on carriage costs, these latest reports won’t exactly be welcome news.
With demand growing as the economy gets back on its feet, albeit cautiously, reduced container supply could put even more strain on the delicate balance of the supply chain. Together with new rules for truck drivers, there are now approximately 153 vessels impacted and 132 complete omissions in the region, compared with 87 ships directly affected by the six-day Suez Canal blockage.
The congestion at Yantian, southern China’s biggest export container port, follows tightened controls over a detected Covid-19 outbreak on 25 May amongst port workers.
Lloyds Loading List reports that this has resulted in cancellations or bypassing Yantian and escalating congestion and restrictions at neighbouring Shekou Port in Shenzhen and Nansha Port in Guangzhou.
Interruptions have reduced container supply further with freight prices between China and North Europe rising by 535% in the past year according to freight tracker Project44. With reports that the UK export levels ‘broadly’ recovered post disruption earlier this year there is no escaping these are down vs early 2020 levels.
Together with raw material increases, many more factors need to be considered. The BPMA has been looking at these issues in detail and will be covering the impact in a report in the next issue of Product Media Magazine; the digital edition is out in early July.
