Congestion in Asia’s Supply Chain Continues to Grow

There are continued shipping delays out of Southern China as recent coronavirus outbreaks in Yantian add to the ongoing congestion and shortage of empty containers.  Yantian is one of the top-ranking ports in the Transpacific, with 3.2 million TEU moving in the past 12 months (per Datamyne).

Neighboring ports Nansha, Shekou, and Hong Kong are also experiencing congestion – not only in the terminals but also over the roadways and barge systems as many exporters have started to reroute cargo to these ports.  In addition, the Pearl River is overcrowded with vessels waiting for berths to open up, and the backup has surpassed the March Suez Canal blockage in terms of container disruption.

Carriers are announcing 38 blank sailings and 101 vessels omitting Southern China from May – July.  If COVID cases continue to rise and congestion continues to clog the terminals, there will be more blank sailings and vessels omitting Southern China as the carriers try to keep up with schedule reliability.

ITN Logistics reports the below current update for the affected terminals:

Yantian

• Covid-19 screening is now required for drivers entering the terminal
• Laden containers are being accepted on ETA-3 (3 days prior to ETA of vessel arrivals)
• Terminal workforce is reduced by seventy percent due to quarantine restrictions and testing
• Trucking and warehouses in the area are greatly affected due to reduced staffing
• Truckers are seeing delays of 10 hours or more to pick up and/or deliver containers
• Pricing for trucking is drastically increasing due to the above factors and needs to be treated case by case

Nansha

• Effective from June 5th, there are new restrictions in place in efforts to control access for movement of people
• Coronavirus quarantine methods have been implemented, again, further restricting traffic and causing more congestion
• Up to several days of waiting time for picking up of empty containers and trying to gate-in loaded containers
• Covid-19 tests are required for truck drivers to be allowed entry to the terminal

Shekou

• Similar restrictions in place for acceptance timelines of loaded containers, currently at ETA-3 (3 days prior to ETA of intended sailing vessel)

Hong Kong

• Terminal is currently operating as normal

The disruption in the global supply chain is also threatening to push up prices.  The Wall Street Journal indicates that “the price of shipping a 40-foot container to the West Coast of the U.S. has jumped to $6,341, according to the Freightos Baltic Index—up 63% since the start of the year and more than three times the price a year earlier.”

Shippers should expect to experience challenges, delays, and rising freight rates over the summer months.  If you have any questions, please reach out to the Customer Service Center handling your shipments.