Late shipping is more and more delayed because of China

The disruption of one of the world's largest container ports in southern China's Yantian for several consecutive weeks is putting enormous pressure on the already tense global shipping industry, causing delays in the supply chain. The supply to manufacturers and retailers around the world is exacerbated.

Yantian cargo port in Shenzhen had to close for nearly a week at the end of May after some workers were found positive for Covid-19. To prevent the spread of the disease, local authorities were forced to block roads and close some business areas here. A few weeks later, the port's productivity had only recovered to about 70% of normal levels.

Operated by Hutchison Ports, Diem Dien Port handles 13 million containers (over 6 meters in length) per year and is the third largest cargo port in the world. The congestion here has had a knock-on effect on neighboring ports such as Nansha and Shekou.

Late shipping is more and more delayed because of China - Photo 1.

Yantian Port in Shenzhen, China

This situation shows that the global shipping industry is at risk of further delays in the future even if the outbreak in China's port cities is only on a relatively small scale.

According to Lars Jensen, CEO of consulting firm Vespucci Maritime, if the Covid-19 epidemic hits larger ports like Shanghai, the risk of having to close again is huge. “Chinese authorities are trying to stamp out the outbreak from the smallest outbreaks. It only takes a few cases of infection to blockade a large area. If that's the case, the impact will be much larger."

At the height of the disruption, everything was like a nightmare, Leslie Wang, owner of a textile factory in Guangzhou, told the Financial Times. Although she had all workers take samples for Covid-19 testing and kept the production line running, the goods were still piling up at the company because it could not be transported.

The shipping industry has been under great pressure since late last year when control measures related to the Covid-19 pandemic were implemented, causing a shortage of empty containers. Things took a turn for the worse when the Suez Canal was blocked in March when the Ever Given vessel got stuck, further delaying transit.

Meanwhile, shipping businesses are also struggling to find ways to meet increasing demand because the Covid-19 pandemic has caused online shopping to explode and developed economies gradually recovered.

As a result, the cost to send a container from Asia to North America recently surpassed $11,000 for the first time, up from about $8,500 in mid-May and $2,000 in October, according to Freightos.