Coronavirus controls pushing China’s southern container ports to limit, sending freight rates soaring

10-Jun-2021 Intellasia | South China Morning Post | 8:53 AM Print This Post

Capacity at major ports in China’s southern manufacturing hub is being pushed to the limit by tighter coronavirus controls, with the delays spreading over the world’s busiest port cluster set to further exacerbate global container shortages.

Operators of most of the ports in Shenzhen and Guangzhou, including Yantian, Shekou and Nansha, plan to keep stringent disinfection and quarantine measures in place at least until next week.

As a result, industry insiders nationwide are predicting that freight rates are expected to continue to rise to record levels in the second half of the year.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

The number of days containers are allowed to enter the port ahead of the vessel’s estimated arrival time has been cut at most ports, with Yantian reducing the window to three days from four having initially stopped all container traffic for four days at the end of May.

Officials at Nansha port insisted on Monday that operations were “running normally”, although truck drivers are required to have booked in advance and they must be able to present a negative coronavirus test conducted within 72 hours, all of which is expected to greatly affect capacity.

Danish shipping giant Maersk said on Tuesday that increased congestion and delays upwards of 15 days are expected at Yantian port, having put the delay at 14 days on Monday.

“We see traffic congestion and it could take five hours for empty container pick up or laden container gate-in,” Maersk told customers in a note on Tuesday.

Maersk said operations in the eastern area of Yantian port were around 30 per cent below normal, while all operations in the western area of the port have been suspended until further notice.

The epidemic in Guangdong has affected our delivery schedule in Zhejiang. Freight prices are also skyrocketing from Zhejiang to India

Xie Jun

Some major international shipping companies have announced plans to omit terminals in southern China in favour of other ports, including Shanghai, leading to increased costs.

“The epidemic in Guangdong has affected our delivery schedule in Zhejiang,” said Xie Jun, a Hangzhou-based exporting manufacturer, referring to Ningbo-Zhoushan port near Shanghai. “Freight prices are also skyrocketing from Zhejiang to India.”

According to the World Container index from Drewry, the world’s leading independent provider of research and consulting services to the maritime and shipping industry, prices have increased by 3.3 per cent to $6,463.78 per 40-foot container a record since the index began in 2011.

Freight rates between Shanghai and Rotterdam have grown to $10,462 per 40-foot container, a year-on-year increase of 518 per cent.

A total of 120 locally transmitted coronavirus cases have been found across Guangdong province since May 21, including seven on Tuesday.

Guangdong has upgraded its lockdown conditions, barring over 320,000 residents from leaving their homes or local communities in Guangzhou and nearby cities including Foshan, Shenzhen, Dongguan, while also conducting mass testing. Some 3,000 residents have also been moved to remote hotels.


Category: China

Print This Post

Comments are closed.