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Home » Container freight stumbles as Covid shuts China’s Ningbo port

Container freight stumbles as Covid shuts China’s Ningbo port

Impact less significant than Yantian Port closure in May, but holiday peak import delays loom for U.S. importers.

project44-Screen-Shot-2021-08-17-at-3.30.04-PM.png
August 17, 2021
Ben Ames
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The Covid outbreak that has shut down a major terminal at China’s Ningbo container port over the past week could clear up in coming days, but logistics flows in U.S.-Asia trade have already been tangled due to rising coronavirus transmission throughout the region.

The pandemic resurgence has shuttered factories in both China and Vietnam at a time when U.S. retailers are reaching the peak pace of stocking up for winter holiday shoppers, according to a statement from Judah Levine, research lead at the logistics technology platform provider Freightos.

“Outbreaks are impacting manufacturing and port operations just as demand for exports hit their peak-season stride: U.S. import volumes in August are projected to set a new monthly record,” Levine said. “Disruptions in Asia will likely contribute to more delays for U.S. importers, and even more pressure on already extremely elevated rates. Though prices had already spiked last August, current rates from Asia to the U.S. are more than six times their levels a year ago.”

By the numbers, Freightos said that its Freightos Baltic Index (FBX) Global Container Freight Index showed that Asia-U.S. West Coast weekly prices had increased 1% to $18,556/FEU last week—571% higher than the same time last year—and Asia-U.S. East Coast weekly prices had increased 5% to $19,620/FEU, or 514% higher than rates for that week last year.

Fortunately, some pressure may soon be released from those markets if port staff continue to test negative for Covid, supply chain data provider project44 said today. Operations at the Ningbo Meishan port terminal were first suspended on August 11 and could now begin a phased reopening this week, resuming full operations by the beginning of September, Chicago-based project44 said.

However, the delay has already caused some 41 ships to drop anchor as they wait for shuttered berth space, showing that delays will continue to ripple through affected supply chains, the firm said. To cope with the disruption, many ocean carriers are diverting to other terminals, leading the average number of weekly port calls to Ningbo-Zhoushan to plummet 22% from nearly 188 container vessels typically to 146 last week.

According to project44 data, the effects of the Ningbo shutdown are not nearly as significant as China’s closure of its Yantian Port in Shenzhen for over a month in May, following another sudden virus outbreak. But the moves have still stoked fears of additional supply chain disruptions in the run-up to Black Friday and Christmas shopping seasons.

In the meantime, recent test results continue to give hope for a swift recovery, according to Dunavant Logistics Group, a Memphis-based third party logistics provider (3PL). “At this time, we’d like to inform you that Ningbo has completed its second round of NAT (Nucleic Acid Testing) over the weekend, with no new cases reported. We estimate that if there are no confirmed cases by the third NAT, Ningbo should be reopened as soon as this Friday, August 20,” the company said in a statement today.

Maritime & Ocean Ports
KEYWORDS Dunavant Freightos project44
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Benames
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

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