More than 150 cases of coronavirus have been reported in the Guangdong province, with ports in the area, including Yantian, Shekou, Chiwan and Nansha experiencing issues and delays.
‘Past breaking point’
The outbreak in Guangdong is the latest in a number of setbacks for the industry - shipping firms have struggled to keep up with the changes in demand caused by the pandemic, and the industry is still handling the fallout from the recent blockage of the Suez Canal.
Ocean Network Express (ONE) said that Yantian International Container Terminal continues to operate below capacity due to Covid related restrictions. Congestion at container terminals at Shekou and Chiwan have surged to over 90 per cent capacity.
James Baker, containers editor at shipping industry publication Lloyd’s List, said: “Because the system is so overloaded, every time one of these things happens now, the system is already at breaking point, or past baking point, so anything else just adds grist to the mill.”
‘Ripple effects around the world’
Nick Marro, the Hong Kong-based lead analyst for global trade at the Economist Intelligence Unit, said: “This is coming at a really fragile time when we’ve just started to see the global trade recovery pick up.”
Lars Mikael Jensen, head of network for A. P. Moller-Maersk A/S, the Danish shipping giant, said that the backlog would be felt globally.
“It’s a huge and very active port and when you get delayed there, it has rippled effects on supply chains around the world,” Jensen said.
‘Delays are piling up’
Nils Haupt, communications director at the German shipping line Hapag-Lloyd, said: “One of the biggest ports in China has basically closed down for close to three weeks.
“They have some berths in operation, but nowhere near enough.”
Vessels have been diverted away from Yantian to other terminals, but this move has caused issues in itself.
“You can use ports like Shekhou, you can use Nansha, you can use Hong Kong; but what we’re seeing right now is that delays are piling up there as well,” Haupt explained.
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The disruption could lead to a shortage of goods ahead of Christmas for UK retailers.
Even under usual circumstances, businesses begin to gather seasonal stock from China months in advance, with the process beginning in the latter end of summer.
Baker said: “One of the issues at the moment, which is aiding the congestion, is the fact that everyone knows that the lead times are really slow, so retailers are booking their Christmas goods already.
“Traditionally, the peak season for container shipping starts in the third quarter as everyone stocks up for the holiday season in the west, but this year we’re just in a permanent peak season already, and heaven knows what’s going to happen come August or September.
“It could get crazy. It’s very hard to tell.”
While the situation could improve, Baker recommends that you “start shopping now” if you want to buy gifts for friends and family.