The partial closure of one of China’s biggest cargo ports due to cases of Covid has raised fresh concerns about the impact of the pandemic on international trade.
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, Reuters reported.
Ningbo-Zhoushan in eastern China is the world’s third-busiest cargo port.
Tighter restrictions to fight China’s latest coronavirus outbreak are starting to hit more parts of the economy. The highly transmissible delta variant has been detected in more than a dozen cities since late July.
About 40 container vessels were waiting at the outer Zhoushan anchorage on Thursday, up from 30 on Aug. 10 when a worker at the Meidong container terminal tested positive for COVID-19, data tracked by Refinitiv showed.
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 showed.
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.
The latest wave of port congestion in eastern China could further drive up container shipping rates, which recently topped $20,000 per 40-foot box for the first time on the critical China-U.S. route as rising retailer orders ahead of the peak U.S. holiday shopping season added strain to global supply chains.
The cost of shipping from China and South East Asia to the East coast of the US has already hit a record high, according to the Freightos Baltic global container freight index, the BBC reported.
The Port of Los Angeles, which saw its volumes dip because of a June Covid outbreak at the Yantian port in China, is bracing for another potential decline because of the latest shutdown at the Ningbo-Zhoushan port in China, a spokesman told Bloomberg.
Anton Posner, chief executive officer of supply-chain management company Mercury Resources, said that many companies chartering ships are already adding Covid contract clauses as insurance so they won’t have to pay for stranded ships.
The shutdown at Ningbo-Zhoushan is raising fears that ports around the world will soon face the same kind of outbreaks and Covid restrictions that slowed the flows of everything from perishable food to electronics last year as the pandemic took hold.
Infections are threatening to spread at docks just as the world’s shipping system is already struggling to handle unprecedented demand with economies reopening and manufacturing picking up.