The explosion of Covid at the Chinese port exacerbates global shipping delays

Weeks of disruption to one of the world’s largest arms markets in southern China has brought serious problems to already expanded global retail companies, exacerbating the delay in manufacturing and retail sales worldwide.

Yantian National Park in Shenzhen closed for about a week late May after working on a harbor after being discovered by Covid-19; weeks later, yields returned to about 70% of the total.

Yantian holds 13m 20-foot shipping containers annually, making it the third largest in the world. The settlement, operated by the Hong Kong capital Hutchison Ports, reached other nearby areas such as Nansha and Shekou. Local authorities closed roads and closed business districts to prevent the spread of the virus.

How quickly do we get back the reliability of pre-Covid chain? Maybe six or nine months

This highlights the dangers of international shipping of delays in the future if it could happen gradually in Chinese cities. Lars Jensen, Vespucci Maritime’s chief of staff, said the incident showed the risk of serious extinction if the virus hit ports such as Shanghai.

“Chinese authorities are working hard to eradicate the smallest plague. . . It only takes a few cases to close large areas. We can see big problems, ”he said.

At the end of the riot, Leslie Wang, who owns a clothing factory in Guangzhou, told the Financial Times that the items “looked like a mess”.

Although he tested all of his co-workers for the virus and maintained product lines, “the goods are stored at a shipping company and cannot be shipped at all,” he said earlier this month.

Ships have been under a lot of pressure since the end of last year because epidemic-related sanctions, such as border crossings, have led to a shortage of empty vessels. Matters came to a head with the suspension of the Suez Canal in March, which led to further delays.

Shipping companies are also struggling to meet their demands after the epidemic has boosted online shopping, and more and more economies are thriving economically last year.

As a result, the cost of shipping a 40-ft container from Asia to northern Europe recently rose to $ 11,000 for the first time, from about $ 8,500 in mid-May and $ 2,000 last October, according to Freightos.

Although Rolf Habben Jansen, Hapag-Lloyd’s chief, said, “I want to think we have a lot of bad things behind us,” he warned.

Yantian’s turmoil and its impact on shipping costs could boost global inflation, some economists have warned when the explosion began. This added to the concern that rising inflation in China, driven by a trade union, will raise export prices.

But Larry Hu, a Chinese economist at Macquarie Group, said all of that, China’s exports have helped keep prices down. “China’s share of international exports has arrived [a] new innovation, in response to global demand and globalization, “he said.” Otherwise, global inflation could be dramatically higher. ”

Peter Sand, an expert in naval research at Bimco, said he did not think “logs bring firewood [inflation] moto ”.

In an effort to disrupt the operation, shipping companies have been sending hundreds of ships to other ports and some ships are sailing south of China to avoid the rest. The waiting time for ships to enter the terminal has reached 16 days, according to Maersk, the world’s largest shipping container.

Electronic manufacturer Eaton has 25 containers stored in southern China, according to Klaus Gaeb, their second-largest consumer in Europe. As a result, the company has to wait two weeks to receive it. It took two or three months to wait for the 45 containers to return because the original supplies failed during the Suez Canal closure.

Sailors have been searching for alternatives such as air and railways to transport goods from Asia to Europe but these decisions are very difficult to follow. Gaeb said commodity prices in Eurasia doubled from pre-epidemic to $ 36,000 per car.

The delays continue for manufacturers and retailers around the world throughout the year, such as the shortage of cargo ships and the high cost of shipping, the figures for the shipping industry said.

Otto Schacht, vice president of navigation at Kuehne + Nagel, one of the world’s largest exporter, said the recent crisis was a nightmare because shipping was about to enter its heyday as retailers were preparing to return to school at the end of the year.

“How quickly did we get back to the pre-Covid chain? Maybe in six or nine months,” he said.

Jensen of Vespucci Maritime said what remains of the Yantian “helps to improve the time we get back to getting used to it”.

“There is a high risk that we could revert back to 2022,” he warned.

Additional reports of Wang Xueqiao in Shanghai, Qianer Liu in Shenzhen and Patricia Nilsson in London