One of China’s busiest ports jammed by Covid, ship delays

Containers are stacking up at the already backed-up Shenzhen port in China as congestion in the U.S. and Europe ripples back to Asia, delaying ships picking up goods from the manufacturing and technology hub.

Manufacturers in southern China are currently making a last push to ship out goods before the Lunar New Year holiday which starts next week, with the People’s Daily reporting that trucked volumes into Shenzhen’s Yantian terminal on Jan. 13 were about 30% above December levels. Those goods are stacking up as ships coming to pick them up have in turn been delayed by congestion in the U.S. and Europe.

Ships arriving to the Yantian terminal are delayed by an average seven days and the number of ships arriving from Europe and the U.S. has fallen more than 40% in the past two weeks, the terminal said in a customer advisory Wednesday. That comes on top of the problems Shenzhen port was already facing, with a viral outbreak earlier this month leading to lockdowns of districts, testing of workers and trucking delays at the Yantian and Shekou container terminals.

The congestion has prompted the Yantian terminal to say it will start restricting the acceptance of containers. To stop operations getting worse, from Friday full containers can only be trucked in four days before vessels are due to berth, the operator said.

The numbers of ships at the joint anchorage for Shanghai and Ningbo ports was the lowest since September. That may indicate that ships are skipping the ports there to avoid congestion, although shipping volumes also tend to drop ahead of the holidays.

This week is the peak period to ship goods in and out of China as workers will start to head home for the holiday from next week, according to digital freight forwarder Zencargo. That’s followed by a lull in activity before shipping demand picks up in mid-February.

The congested ports and holiday are likely to further slow shipments of goods to the U.S. and elsewhere, adding to already high inflation pressures. The price of U.S. imports from China was at the highest level for more than six years in December 2021.

“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,” Chris Williamson, chief business economist at IHS Markit Ltd said in a recent report.

Ports globally are still grappling with congestion as the pandemic heads into its third year, piling further pressure on supply chains affected by shortages of workers as the omicron variant spreads.

“It’s not just China, all shipping operations have been affected world-wide,” said Mark O’Neil, chief executive officer at Columbia Shipmanagement Ltd. “It’s almost certain that we will see more delays to shipping because omicron is a short, sharp step backwards.”

Port congestion was rising in Western Europe last week, with the combined anchorage areas for Antwerp-Zeebrugge seeing the highest container vessel count in about nine months.

Meanwhile, new cases of the omicron variant have impacted the logistics workforce at ports on the U.S. west coast like Los Angeles and Long Beach, according to Judah Levine, the head of research at digital freight-forwarder Freightos. That’s worsened existing shipping delays and cancellation of voyages that predated the new virus strain, he said.