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Shenzhen port overwhelmed by COVID-19, shipments further disrupted

Containers are camping en masse at China’s hectic Shenzhen port as the congestion in the U.S., and Europe bounces back to Asia, with ships unable to arrive in time for receiving shipments.

According to the People’s Daily, trucked volumes entering Shenzhen’s Yantian terminal on Jan. 13 were almost 30% greater than in December because Southern Chinese manufacturers are making this last push to get goods out before the Lunar New Year holiday. 

But ships docking at the Yantian terminal are delayed on average by seven days. In addition, the number of vessels arriving from Europe and the U.S. has dropped by more than 40% in the last two weeks. The port of Shenzhen has been dealing with a virus outbreak earlier this month that resulted in district lockdowns, worker testing, and other measures.

The Yantian terminal said it would begin to accept fewer containers to level up congestion. Starting from Jan. 21, full containers may be trucked in only four days before vessels are set to berth.

As ships opt-out and instead go to Shanghai and Ningbo ports over concerns of congestion, the rates of ships arriving in these ports have dropped to the lowest since last September. However, shipping volumes tend to fall ahead of the holidays as well.

Bloomberg reported from digital freight forwarder Zencargo that because workers will begin to return home for a holiday from next week, this week becomes the busiest time to ship goods into and out of China. However, there will be a break in activity afterward until demand revitalizes again in mid-February.

Yet, the current situation might add further stress to the already high inflation rates, as goods shipments to the U.S. and elsewhere are slowed down because of the holiday and congestion at ports.

In December 2021, the price of Chinese imports into the U.S. reached its highest level in more than six years. 

Chris Williamson, the chief business economist at IHS Markit Ltd, told the BBC’s World Economics Programme that “Delivery times lengthened significantly in 2021, and January 2022 began with many companies reporting severely constrained output, input costs rising faster than at any point in the decade prior to the pandemic, and Omicron causing fresh uncertainty.”

Worldwide, ports have not resumed normal operations as the COVID-19 pandemic continued to persist for a third year in a row. In addition, supply chains are expected to get disrupted for another period as the Omicron variant causes worker shortages. 

Mark O’Neil, ship operator Columbia Shipmanagement Ltd., called Omicron a “short, sharp step backward,” expecting that there will inevitably be more shipping delays. 

Last week, port congestion in Western Europe increased, with the combined anchorage areas for Antwerp-Zeebrugge seeing the highest container vessel count in about nine months.

Meanwhile, according to Judah Levine, the head of research at digital freight-forwarder Freightos, new cases of the Omicron strain have affected the logistics workers at ports on the U.S. west coast like Los Angeles and Long Beach. He says this has worsened current shipping delays and cancellations that preceded the new virus strain.

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