Tag: Port

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China partially shuts down port after one Covid case

China partially shuts down port after one Covid case

Heavy cranes in the port of Ningbo in China.

Philippfotograf | iStock | Getty Images

China closed a key terminal in its port of Ningbo-Zhoushan, the world’s third largest port, after a worker was discovered to be infected with Covid – a move that is likely to put further pressure on already congested utility networks.

It was the second time this year that the country ceased operations at one of its major ports.

Analysts say China’s “zero tolerance” approach to Covid will tighten already stressed supply chains this year. Some warn that this may not be the last port closure as long as Beijing takes this stance.

Dawn Tiura, CEO of the Sourcing Industry Group – an association for the procurement and procurement industry, said China’s stance will lead to “serious” ramifications for the supply chain.

“China has zero tolerance for COVID. One person who tests positive is enough to close (the) port, ”she told CNBC in an email.

Ningbo-Zhoushan is the third largest container volume in the world. According to the World Shipping Council, 27.49 million 20-foot equivalent units (TEU) of container handling were handled in 2019. The container volume rose in 2020 by almost 5% to 28.72 million TEU.

As long as the authorities adhere to this “zero covid” stance, there is still a risk of sudden disruptions due to tests or bans …

Nick Marro

Economist Intelligence Unit

All incoming and outgoing services at the Meishan Terminal at the port of Zhoushan were suspended until further notice on Wednesday, according to Chinese state media. The terminal is the key to processing shipments to Europe and North America.

The supply chains have already been severely disrupted this year by crises such as the shortage of shipping containers and the incident in the Suez Canal. In June, Covid infections sparked disruption at shipping hubs in southern China, including major ports in Shenzhen and Guangzhou – the first time China has shut down ports due to Covid cases.

Effects of China’s “zero covid” stance

China’s zero tolerance for Covid suggests this latest port disruption may not be the last, said Nick Marro, head of global trade at the Economist Intelligence Unit.

“China’s ‘zero-covid’ approach means officials will prioritize containment of the pandemic above all else, especially given the highly contagious nature of the Delta tribe and the risks the current outbreak poses to future economic performance in the third quarter “He said in a note on Wednesday.

“As long as the authorities maintain this ‘zero covid’ stance, there is still a risk of sudden interference from tests or bans, which ties all hopes of normalcy closely to factors such as national vaccination deadlines,” he added.

China is experiencing a resurgence of Covid cases due to the highly transferable Delta variant. The daily cases exceeded the 140 mark on Monday – the highest number of daily infections since January, according to Reuters. The Chinese authorities have ordered mass tests in some areas and wide-ranging restrictions on movement in major cities such as Beijing.

The suspension of services at the Meishan Terminal comes as container shipping rates continue to rise this year. The container freight rates from China and East Asia to the west coast of North America have risen by over 270% to over 15,800 USD per TEU this year, according to the global container freight index from Freightos Baltic. Meanwhile, rates on the east coast have risen by over 220% to over USD 17,500 per TEU, according to the index.

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Analysts warn of further delays and consumers will likely have to bear the cost as the holiday season approaches.

Tiura pointed out that the June Covid outbreak caused Shenzhen’s main Yantian terminal to cut 70% of its exports. The waiting time for processing shipments has been tripled from 3 days to 8 or 9 days.

Given that Ningbo-Zhoushan is the third largest container port in the world, this closure makes the already dire situation much worse.

Dawn Tiura

CEO, Sourcing Industry Group

“If we see something similar here, and the time it takes to move ships through port doubles or triples, we will have a significant and long-term impact on exports that will impact the holiday season and drive inflation,” she said.

“The shortage of containers was already affecting global supply chains. Given that Ningbo-Zhoushan is the third largest container port in the world, this closure will make an already dire situation much worse, ”said Tiura.

She said container capacity is likely to become more expensive and shippers are likely to pass the cost on to consumers, further fueling global inflation ahead of the all-important holiday season.

Mario Ciabarra, CEO of digital analytics company Quantum Metric, said retailers will face a lot of uncertainty before the holiday season and one of them will be inventory challenges.

“Inventories will be the primary concern of retailers as they face the decision to either have limited or no stocks of certain items, or instead face higher costs associated with air freight,” he told CNBC.

Marro from the EIU also pointed out disruptions that are exacerbated by the key demand before the Christmas season.

“Trade disruptions pose problems not only to shipping and consumers, but also to manufacturers who rely on critical import components,” he said.

– CNBC’s Iris Wang contributed to this report.

Categories
Business

On-line procuring results in pressure at Port of Los Angeles

Online shopping leads to strain at Port of Los Angeles

The number of shipments delivered through the country’s busiest container port complex in Los Angeles has increased significantly from the first half, driven by a recovery in business and a change in consumer habits.

Gene Seroka, executive director of the Port of Los Angeles, said during an appearance on CNBC on Monday that cargo volume increased 50% in the second half of 2020 after arriving at the docks in the first six months of the year, and that loaded ships often anchor at sea waiting for a dock to open.

“It’s all the change in the American consumer,” Seroka said on Power Lunch. “We don’t buy services, we buy goods.”

The surge in shipments has put a strain on the seaport supply chain, which is managed by the Los Angeles Port Authority. It’s a stark contrast to spring, when volume plummeted as the coronavirus pandemic plunged the global economy into recession.

With retailers seeing a surge in online ordering and e-commerce in the world of stay-at-home, it has created long delays in unloading ships at ports across the country and a lack of desired storage space.

Seroka said the port expects demand to surge. The Port of Southern California has been the busiest container port in North America for the past two decades, welcoming 17% of all US cargo.

In November, the Port of Los Angeles saw 890,000 shipments, equivalent to 20 feet, passing through its facilities, up 22% from the same month last year, partly due to vacation orders. Imports from Asia are at a record level, announced the port authority. Meanwhile, exports at the port have declined in 23 of the last 25 months, partly due to trade policy with China.

“In addition to trade policy, it is the strength of the US dollar that makes our goods a bit more than would otherwise be the case for competing nations in the same product categories,” Seroka said. “And right now the most amazing statistic is that we are sending back twice as many empty boxes as we are American exports through our docks.”

Monthly cargo volumes averaged 930,000 units in 20 foot units since August, which Seroka called “unusual” at the end of the year. The activity is expected to last several months.

Seroka said the port has been focusing on digitization to streamline shipping schedules and logistics.

“The port is tense,” he said.

Categories
World News

Truck Jam Eases at U.Okay. Port Days After France Reopens Border

Truck Jam Eases at U.K. Port Days After France Reopens Border

LONDON – A huge truck traffic jam in the port of Dover in England continued to ease on Saturday, days after France lifted a border blockade imposed over fears of a fast-spreading variant of the coronavirus that has already spread to Europe and Japan .

Up to 6,000 trucks had lined up at the height of the day-long traffic jam, and many drivers spent a bleak Christmas in their vehicles when France demanded that everyone crossing the border provide evidence of a negative coronavirus test.

“It was shocking to see things like this happening in a G7 country like Britain,” said Benjamin Richtzenhain, a traveler who crossed the Channel on Thursday. He said authorities had poor communication with those stuck in traffic and that access to water, bathrooms and blankets was restricted.

The misery in the harbor added to a general feeling of darkness that permeated the holiday season in the country. Christmas came barely a week after the government announced the presence of a rapidly spreading variant of coronavirus that swept the country and imposed widespread lockdowns and other severe restrictions.

A short-term Brexit deal with the European Union on Thursday meant the UK narrowly avoided getting out of the bloc without an agreement, but also brought home a sense of isolation. And dozen of countries have restricted travel from the UK in hopes of ruling out the new variant of the virus and disrupting plans during one of Europe’s biggest holidays.

Despite the new restrictions around the world, the virus variant has already spread to France, Spain and Japan. According to Japanese media, the Japanese government banned non-Japanese nationals from entering the country on Saturday to prevent the new tribe from spreading.

On Saturday morning, officials from the UK Transport Department said that since Wednesday when authorities prepared the tests, at least 1,600 vehicles had remained in traffic jams near the port, while at least 8,000 had crossed the English Channel via the Eurotunnel.

At the port, officials worked hard on Saturday to test the remaining drivers in hopes of deleting the backup. More than 15,526 were tested, 36 of which were positive, the department said.

Hundreds of other military personnel were deployed on Friday to step up testing efforts and distribute food and water provided by a number of organizations.

But almost a week after the blockades of the sea, rail and air routes, the scale of the task made it impossible to predict when the delays would improve and whether the drivers would spend another day in limbo and sleep another night in their trucks would.

Thousands of police officers, civilian testers, council planners and dock workers gave up their Christmas celebrations to reunite drivers with loved ones, said Grant Shapps, the UK’s transport secretary, who praised their efforts.

London airports were fairly quiet on Saturday and there were no signs of a rush the day after the United States imposed new restrictions on people flying in from the UK. From Monday, passengers to the United States will have to provide evidence of a negative coronavirus test.

A Heathrow Airport spokesman said Saturday is not expected to have a large number of travelers and that the day after Christmas is usually a quiet day of travel.