Covid outbreaks in China congest country’s largest port

Ships trying to avoid delays caused by covid outbreaks in China are heading straight for Shanghai, causing mounting congestions at the world’s biggest container port.

Shipping companies are making the change to avoid delays in the nearby city of Ningbo, which has suspended some road services at its port after an outbreak of Covid-19. Ships are also being rerouted to Xiamen in the south, shows Bloomberg’s data on transports.

These detours are adding to the increased number of crammed ports seen in China as more and more cities are dealing with outbreaks of the virus. As the pandemic approaches its third year, the rigorous policy of testing workers and truck drivers ahead of the Lunar New Year holiday later this month is putting further strain on supply networks.

In Shenzhen, the country’s principal technology hub, tests on residents and truckers have caused ships to queue at the port. This caused the Shekou terminal to start restricting the entry of goods, which means that from the 14th onwards, full containers can only be transported three days before the ships arrive, according to the terminal operator.

Meanwhile, the city of Tianjin has ordered workers to take a half-day break to undergo tests for Covid-19 in an effort to contain the spread of the omicron variant. Truck transport capacity is estimated to be at half normal levels, and drivers must be tested daily before entering the port, said Alex Hersham, chief executive of freight company Zencargo.

The outbreak has now spread to the port city of Dalian after authorities confirmed that two people who traveled there from Tianjin have contracted the omicron strain virus.

Analysts estimate that the inflow of ships into Shanghai pushed back the departure time of container ships by nearly a week. These delays may have an impact on already overburdened ports in the United States and Europe. According to Zencargo’s Hersham, ships may soon start skipping Chinese ports if they find no other alternatives.

“Port congestion, together with omicron outbreaks and looming Lunar New Year lockdowns in China, will continue to disrupt [stock] replenishment cycles this quarter,” said Josh Brazil, vice president of the logistics intelligence firm Project44.

Source: Valor Econômico

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