Ningbo COVID shutdown adds to supply chain strain

Congestion off China’s top two container ports Shanghai and Ningbo is worsening following the shutdown of a container terminal in Ningbo where a COVID-19 case was detected this week.

The disruption is such that ports in nearby Shanghai, where many vessels are being re-routed, are seeing the worst congestion in at least three years.

About 30 vessels are queuing outside Yangshan port, a key container terminal in Shanghai, Refinitiv data has indicated.

The latest jams follow massive disruptions to container handling in southern China in June, when ports near Shenzhen imposed stringent COVID-19 containment measures leading to dozens of container vessels stuck in traffic.

Now, tighter restrictions to fight China’s latest coronavirus outbreak are starting to hit more parts of the economy, with the highly transmissible Delta variant detected in more than a dozen cities since late July. 

Forty container vessels were waiting at the outer Zhoushan anchorage on Thursday, up from 30 on 10 August when a worker at the Meidong container terminal tested positive for COVID-19, data tracked by Refinitiv showed.

Meidong terminal has suspended all operations since early Wednesday, while other terminals in Ningbo imposed restrictions limiting the number of people and cargos entering port areas.

Shipping company CMA CGM put out a note on 12 August saying that some vessels will be re-routed to Shanghai or skip port calls at Ningbo, while Hapag-Lloyd  expects the suspension in Meidong to cause delays in some planned sailings, according to a company statement.

Ports in eastern China have been resuming operations and clearing backlogs following typhoon In-Fa, which dented container handling volume by 10% in late July from the same period last year, according to data from China Ports and Harbours Association.

The latest wave of port congestion in eastern China is expected to drive container rates up further, as rising retailer orders ahead of the forthcoming peak US shopping season add strain to global supply chains.

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