Carriers React Quickly to Terminal Closure in China

The container shipping carriers are working to respond to the still unfolding situation after the announcement that all operations had been suspended at one of the terminals in the massive Ningbo Zhoushan port complex due to a case of COVID-19 among the port employees. Uncertain how long or widespread the disruption could become at China’s second-largest container port, carriers including CMA CMG and Hapag-Lloyd are warning customers to expected delays and diversions while others including Maersk reported that most of their operations pass through other terminals in the port complex.

Government officials in the city of Ningbo met to review the situation. While having only confirmed one asymptomatic case for a fully vaccinated port employee, the city officials are following China’s strict zero-tolerance approach. They said the case had been discovered during routine testing of port employees and while the person was likely exposed to the virus by a foreign crew member, they admitted that it showed that there are still shortcomings in their preparations.

The city of Ningbo announced that it would move quickly with additional measures to control a potential outbreak of a new variant of the COVID-19 virus. They are planning additional testing and isolation and said they could implement regional closures. While the official party line was that it was part of the zero-tolerance policy some feared the outbreak could be more widespread noting that flights to Beijing have also been suspended. 

The Meishan container terminal was immediately ordered to suspend all operations while it is disinfected and all employees are tested. Terminals in the port complex however are spread out over great distances and remote from the city itself. The terminal handles about a fifth of all the containers moving through the port with CMA CGM and Hapag-Lloyd among its major customers.

In an update sent out to customers earlier today, August 12, CMA CGM reported that two vessels currently alongside had operations suspended and that it has already decided to divert two vessels to Shanghai. A third is reported to be omitting Ningbo with no alternative port announced. In addition to the Meishan Island International Container Terminal (MSICT) suspension, CMA CGM warned that gate-in of export containers to all of Ningbo’s terminals is being limited to two days of a vessel’s ETA. 

“With this sudden suspension, we expect a delay in planned sailings that might affect your cargo planning. Please know that we are working on alternatives, and hope for your understanding on a matter that is beyond our control,” wrote Hapag. Three vessels due to arrive starting this weekend and into next week will be omitting their scheduled calls at Ningbo. 

Maersk while saying it was monitoring the situation sought to assure customers saying that vessels operating in the 2M Alliance mainly call at another terminal, Beilun Phase 4, which is operating normally. Currently, the advised that waiting time is a day and a half to two days, but that yard density for loaded containers is already at 80 percent. They expect gate operations will be reduced to two to three days depending on the backlog at the terminal.

Analysts monitoring the port report that the closure has already had an impact with the number of vessels waiting in the anchorage rising by a quarter to approximately 40 ships total overnight. Based on this along with the carriers’ experience during the COVID-19 outbreak at Yantian in the spring, the expectation is that carriers will move quickly to reduce delays, potentially creating more disruptions and backlogs both at regional ports and potentially globally.