Growing shipping congestion at world’s largest port

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Ships wanting to avoid delays caused by Covid in China are heading to Shanghai, causing increasing congestion at the world’s largest container port.

Shipping lines are making the switch to avoid delays in nearby Ningbo, which suspended some shipping services near that port following an outbreak of Covid-19, according to shippers and experts. Ships are also being diverted to Xiamen in the south.

These diversions add to the new wave of congestion facing Chinese ports as a growing number of cities grapple with outbreaks of the virus. Stringent testing of workers and truckers ahead of the Lunar New Year vacation later this month is putting further pressure on already strained supply chains as the pandemic enters its third year.

In the country’s tech hub of Shenzhen in the south, the testing of residents and truckers to contain an outbreak means a queue of ships has formed at the port. This has prompted the Shekou terminal to start restricting the acceptance of goods, meaning that from Friday only full containers can be trucked in three days before the ships arrive.

Meanwhile, the northern Chinese city of Tianjin has ordered workers to take a half-day off for Covid testing as authorities try to contain the spread of the omicron variant. Truck capacity is estimated to be half of normal levels, and drivers are required to undergo daily testing before entering the port, said Alex Hersham, managing director of digital transport company Zencargo.

That outbreak has now spread to the port city of Dalian, and two people who traveled there from Tianjin have been confirmed to have omicron.

The influx of ships to Shanghai has delayed shipping schedules for container ships in that city by about a week, freight forwarders said. These delays could spill over to ports in the United States and Europe, which are already saturated. According to Zencargo’s Hersham, ships could start avoiding Chinese ports due to a lack of options.

“The port congestion issue will continue to affect resupply cycles this quarter, along with the omicron disruption and impending Chinese New Year closures,” said Josh Brazil, vice president of supply chain insights at logistics intelligence firm project44.

Source Bloomberg

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