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Shipping firms warn of vessel delays amid South China ports Covid surge
A cargo ship carrying containers is near Yantian port in Shenzhen, China. Photo: Reuters

More than 50 container vessels were waiting to dock in the Outer Pearl River Delta this week as onshore authorities worked to keep a lid on the latest outbreak of coronavirus cases

 

Major shipping companies have warned clients of impending vessel delays amid Covid crackdowns in container ports across southern China.

Congestion at ports in Guandong is worsening as the authorities step up disinfection measures amid a flare-up in Covid-19 cases, causing the biggest backlog since at least 2019. 

More than 150 coronavirus cases have been reported in Guangdong province, a key manufacturing and exporting hub in southern China, since the latest wave of cases struck in late May, triggering local governments to step up prevention and control efforts that have curbed port processing capacity.

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Ports in Guangdong, including Yantian, Shekou, Chiwan and Nansha, have issued notices this week suspending vessels from entering ports without advance reservations and will only accept bookings for export-bound containers within three to seven days prior to the arrival of vessels.

Major shipping companies have warned clients of changes to port call schedules and the possibility of skipping some ports altogether.

Ocean Network Express (ONE) said in a notice on Wednesday that Yantian International Container Terminal continues to operate below capacity because of Covid-related work restrictions while congestion at container terminals at Shekou and Chiwan has surged to over 90% of capacity.

DELAYS EXTENSION

On Thursday the world’s leading container line, Maersk, increased the duration of expected delays at Yantian to 16 days from 14 days previously.

As of Friday, more than 50 container vessels were waiting to dock in the Outer Pearl River Delta, where the ports are located, according to Refinitiv data. 

That compares to around 20 vessels in the same period last year and more than in February 2020 when ports were paralysed because of China’s initial Covid-19 outbreak.

LOGISTICS CHAINS

Exporters said the impact has been limited so far, as loading delays and slow deliveries have hampered logistics chains since the start of the Covid-19 pandemic.

“Basically we had a similar experience last year so we have experience in responding, only the increase in transport costs are getting really astonishing. The freight fees are reflected in the increase in material costs which are up by around 15% to 30% already,” said a sales manager at an electronics cable manufacturer in Shenzhen, the large manufacturing city in Guangdong near Hong Kong.

Container freight rates from China to Europe rose to a record of $11,037 per 40-foot container this week, caused by supply chain bottlenecks from a surge in consumer goods demand and some knock-on effects from when a container ship blocked the Suez Canal in March.

 

  • Reporting by Reuters

 

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Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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