Chinese port jam threatens Christmas shipping rush

The latest obstacle to global shipping is likely to shake trade flows for several more weeks and could delay shipments as the year-end shopping season approaches.

Shipping officials say around 50 container ships remain stranded around the port of Yantian in southern China and some 350,000 loaded containers are stacked at the docks, the main gateway for Chinese goods to destination of Western countries struggling to recover from a Covid-19 epidemic that disrupted operations there.

Ship bottlenecks began in late May when a coronavirus outbreak forced authorities to shut down parts of Guangdong province, which is home to Yantian, one of the world’s busiest ports and a major gateway for containerized exports such as electronics, furniture, household appliances and auto parts. .

Yantian officials say freight forwarding operations that normally handle around 36,000 containers per day have returned to 70 percent of capacity, from 30 percent earlier this month. But the queue of ships is so long that cruise ship operators divert their ships to nearby ports which are also inundated with containers.

“Removing the big pile of export cargoes waiting for Yantian will be a challenge,” said Lars Jensen, managing director of Danish company Vespucci Maritime. “We are entering the peak season with a serious shortage of capacity and in order to clear the backlog, ships will have to be diverted from other ports in Asia, but there are not enough ships available.”

German Hapag-Lloyd AG

, the world’s fifth-largest container operator in terms of capacity, according to maritime data provider Alphaliner, said there were around 50 vessels waiting to call at Yantian, up from 70 last week.

“The line of ships is getting smaller, but everyone is still docked,” company spokesman Nils Haupt said. “Capacity will remain limited in the fourth quarter, which could affect the year-end shopping season and put further pressure on freight rates.”

The stalemate is the latest in a series of disruptions that have hit supply chains around the world this year, resulting in shortages of everything from raw materials to consumer goods, increasing costs for manufacturers and retailers and undermining corporate attempts to capitalize on resurgent demand in Western economies.

The weeklong blockade of the Suez Canal in March caused by a stranded container ship delayed deliveries of about 250,000 containers by about a month.

Ship safeguards still hamper transportation through the California ports of Los Angeles and Long Beach, which are the United States’ largest gateway for Asian imports. An offshore bottleneck has eased since the first quarter, with nine container ships awaiting berth over the weekend of June 19, up from a high of around 40 in the first quarter, according to the Marine Exchange of Southern California. But shipping lines and their customers are reporting increasing delays in moving goods inland due to congestion and cargo equipment shortages.

The demand for boxships is mainly driven by western retailers such as Walmart Inc.

and Inc.

who scrambled to restock after a year of supply chain disruptions from the pandemic.

At Palmer & Purchase, a women’s clothing and accessories boutique in Rye, NY, owner Abbie Durkin tries to make sure the winter line arrives before the holidays.

“It will be a race to get a full line of merchandise by Christmas,” she said.

On average, 30 container ships a day are stranded outside the ports of Los Angeles and Long Beach, just waiting to deliver their goods. The backlog is part of a global supply chain mess spurred by the pandemic that means consumers could see delivery delays for weeks. Composite photo: Adam Falk / The Wall Street Journal (Video of 12/4/21)

Congestion increases costs for shipping customers as they search for space and see goods stuck in overloaded distribution channels. The price of shipping a 40ft sea container from China to ports on the west coast of the United States was quoted last Friday at $ 6,614, up 57% from the start of the year and 386% more than in January of last year, according to the Freightos Baltic index.

“It’s been a disaster for transportation and logistics,” said Jay Duehring, who manages logistics and commerce for Specialized Bicycle Components Inc., a California-based company that imports approximately 1 million bikes a year. “Our transportation costs have tripled compared to last year and delivery times have doubled to almost two months. With the start of the high season, the rest of the year will be extremely difficult, especially after the Yantian disruption. “

Hapag-Lloyd and other large container ship operators including Denmark’s AP Moller-Maersk A / S and France’s CMA CGM SA expect peak year-end import season to be in full swing early July instead of August, which is the case in normal years.

“This is an excessively high demand crisis and a severe shortage of space for empty ships and containers,” said Alan Murphy, CEO of Denmark-based shipping consultancy Sea Intelligence ApS. “Any kind of disruption like Yantian can create a lot of mess for an extended period of time, so don’t be surprised if your Christmas shopping list is short.”

Write to Costas Paris at [email protected]

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source link

About Julie Gray

Check Also

Tern Partners with Dutch-X to Deliver Goods to New York | Community

Tern partners with Dutch-X to deliver goods to retail customers in New York City. New …

Leave a Reply

Your email address will not be published. Required fields are marked *