Ships are building up at important Chinese ports as China’s strict zero-Covid policy rattles supply chains once again.
While Beijing has made contingencies to keep ports operating during Covid outbreaks, the same cannot be said of the thousands of factories that are having to down tools with workers told to head home for lockdown periods of seven days.
In total there are now around 40m Chinese in lockdown including almost every citizen in Shenzhen, home to the world’s fourth largest container port, as well as the entire province of Jilin in the far north of the country.
Currently there are 34 vessels off Shenzhen waiting to dock, compared to an average of seven a year ago, according to Refinitiv ship tracking data. At Qingdao, a northeastern Chinese port city, there are around 30 vessels waiting to dock compared to an average of seven last year. At the country’s two largest ports – Shanghai and Ningbo-Zhoushan – there has also been a notable build-up in ships at anchor in recent days.
In a customer update yesterday, Danish liner Maersk suggested that while ports in China continue to function normally, the problems lie on the landslide with the strict Covid measures hampering trucking productivity.
“All things considered the impact, for now, is clearly not as large as last year,” commented Lars Jensen, the CEO of Vespucci Maritime yesterday via LinkedIn, referring back to the summer of 2021 when Shenzhen port was partially closed for three weeks following another Covid outbreak. “Let us hope it does not get worse than this (but zero-tolerance and the Omicron variant is not a happy mix…),” Jensen added.
In conversation with Splash today, Peter Sand, chief analyst at Xeneta, said: “The current developments around Covid lockdowns in China and sanctions imposed on Russia is creating more uncertainty for shippers and carriers in general. But what we do know for sure is that congestion will go up, delays will extend and supply chain professionals everywhere will work even longer to get the cargo moving around those obstacles.”
Sand went on to warn Splash readers that a problem building on the horizon in Asia is the lack of boxes for exports, a development he said was worth keeping an eye on.