The heavy congestion at Chinese ports is set to remain in the near term amid uncertainty over the length of recent COVID-19 restrictions imposed by the government to stem further outbreaks.
The disruption at ports in China following the closure of the Meishan terminal at Ningbo last week has stoked worries of additional supply chain disruptions and delays which could result in even higher freight rates for chemical product shipments.
While most chemicals are liquids and are shipped in tankers, polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets, are moved by container ships.
Rates in the ocean freight market are reaching all-time high rates, Danish transport and logistics firm DSV-Panalpina said in a report on 17 August.
Spot market rates for ocean freight from Asia to Europe are “on a highest ever level” amid growing demand, while rates to North America have also increased due to surcharges, it said.
According to data from shipping and logistics service platform project44, the average number of weekly port calls to Ningbo -Zhoushan had plummeted 22% from nearly 188 container vessels to 146 last week which coincides with the volume of container cargo the Meishan island port terminal handles.
The Meishan terminal is now scheduled for partial reopening by 24 August but this has not been confirmed by Chinese authorities, DSV-Panalpina said.
The disruption at Ningbo-Zhoushan port – the world’s third busiest after Shanghai and Singapore – will cause a “ripple effect” similar to the closure of Yantian port in South China in May due to a COVID-19 outbreak, DSV-Panalpina said.
“Increasing congestion should be expected in the other terminals in Ningbo and an impact on Shanghai should also be anticipated,” it said.
The waiting time for vessels stands at three days in Ningbo and 4-5 days in Shanghai, according to DSV-Panalpina.
However, the effects of the terminal closure in Ningbo are not nearly as significant as the shut down at Yantian port, according to project44. The Meishan terminal handles about a quarter of the port’s volume.
Since 20 July this year, the number of newly reported cases of COVID-19 has compelled the Chinese government to re-enforce restrictions to reduce the surge in the spread.
Most ports in the country ask for a nucleic acid test for the entire crew with vessels anchored until negative results are confirmed.
Many ports in the country have also made it compulsory for vessels to quarantine for 14-28 days if they were previously berthed in India or were part of any crew change process within 14 days of arriving in China.
China on Thursday reported five new locally transmitted infections, down from 6 a day earlier. Mainland China has recorded 94,546 confirmed cases, with the cumulative death toll unchanged at 4,636 as of 18 August.
Source: ICIS by Nurluqman Suratman https://www.icis.com/explore/resources/news/2021/08/19/10675704/china-heavy-port-congestion-to-remain-amid-restrictions-uncertainty