A Covid outbreak that has partially closed one of the world’s busiest container ports is raising concerns that the rapid spread of the delta variant will lead to a repeat of last year’s maritime nightmares.
The Port of Los Angeles, which saw volumes drop because of a June Covid outbreak at China’s Yantian port, is bracing for another possible downturn because of the latest closure of China’s Ningbo-Zhoushan port, a spokesman said. Anton Posner, managing director of supply chain management firm Mercury Resources, said many companies that charter ships are already adding contractual clauses on Covid as insurance so they don’t have to pay for stranded vessels.
It looked like things were starting to calm down, “and now we’re in delta delays,” Emmanouil Xidias, a partner at Ifchor North America LLC, said in a telephone interview. “There’s going to be a secondary hit.”
The closure of Ningbo-Zhoushan raises fears that ports around the world will soon face the same kind of Covid flare-ups and restrictions that slowed flows of everything from perishable foods to electronics last year as the pandemic took hold. Infections threaten to spread on the docks just as the global shipping system is already struggling to handle unprecedented demand with economies reopening and manufacturing picking up.Play Video
Ningbo-Zhoushan Port said in a statement late Thursday that all other terminals apart from Meishan Port have been operating normally. The port is actively negotiating with shipping companies, directing them to other terminals, and posting information on a real-time data platform, it said.
To minimize the impact, it is also adjusting the operating time of other terminals to ensure that customers can clear their shipments. A port spokesman said there was no further update when contacted Friday.
Company reactions
Some ships that docked at the Meishan terminal before the closure are suspending cargo operations until the terminal reopens, according to a notice sent by shipping line CMA CGM SA to shippers.
Other vessels that usually call at the Meishan terminal will instead stop at the Beilun terminal, according to a Thursday statement from A.P. Moller-Maersk A/S. One of the company’s vessels will skip Ningbo next week, it said.
“We are working on contingency plans in order to mitigate the likely impact on our vessel schedules and cargo operations,” Orient Overseas Container Line, a subsidiary of Orient Overseas International Ltd.’s container subsidiary Orient Overseas International Ltd. said via e-mail.
The city of Ningbo is still considered a low-risk area for the virus, according to the city’s health commission, although flights to and from the capital, Beijing, have been canceled.
Ningbo authorities said the dock worker was fully vaccinated with an inactivated vaccine and was given the second dose on March 17. The worker had been asymptomatic since Thursday afternoon. He was infected with the delta strain, based on genetic sequencing, and epidemiological investigation shows that the worker had been in close contact with seafarers on foreign cargo ships.
The Baltic Dry index, which serves as a global benchmark for bulk shipping prices, has risen more than 10% since a month ago, when the delta variant began spreading rapidly. While there have been no significant effects on U.S. ports, the problems in China could hurt companies that rely on container exports from the country.
Container prices have also skyrocketed, with the benchmark cost of shipping a container from Shanghai to Los Angeles jumping more than 220% in the past year to $10,322 this week.
