Yantian Limits Export Boxes as Chinese Ports Struggle with Congestion

China ports are continuing to struggle with the pressures on the supply chain with the challenges being compounded both by the rush to get goods shipped before the Lunar New Year holiday and the growing number of cases of the Omicron variant of the coronavirus. Four of China’s largest port regions have all reported cases of the virus and limited lockdowns in recent days while others such as Ningbo-Zhoushan continue to struggle with the backlogs created by recent disruptions. With shippers frantically trying to redirect cargo, other ports are reporting mounting backlogs with the international container terminal at Yantian becoming the latest to restrict volumes due to the congestion.

While none of the ports have suspended operations as some did previously, Shanghai and Tianjin for example have both in recent days reported significant disruptions and lockdowns in regions of the cities. Last week, both Toyota and Volkswagen both announced early closures of their operations because of the lockdowns in parts of the city. The car companies said they would temporarily suspend operations due to the virus-related restrictions and problems along the supply chains.

China continues with its zero-tolerance policy to the virus although has shown restraint using lockdowns limited to smaller regions during the current wave. However, in Shanghai, China’s busiest port, officials are reporting that ships are running as much as a week behind schedule due to global port congestion and mounting backlogs from other ports such as Ningbo and Tianjin. Risk management consultants Russell Group is now estimating that port congestion at Shanghai is costing an estimated $4.5 billion a week in lost trade. Suki Basi, Russell Group Managing Director commented that further analysis shows that $635 million worth of trade from Shanghai to the United States is currently under threat due to the congestion in the ports.

Earlier this week, Dalian became the latest Chinese port city to begin limited lockdowns in response to reported cases of Omicron. While operations continue at this and other ports, Maersk for example delayed by a week two upcoming sailing dates from Asia saying, “We will further adjust the voyages to the U.S. West Coast to match the actual departure weeks and provide better schedule visibility.” Last week, Hapag-Lloyd also announced plans to replace some scheduled calls at Ningbo with Shanghai due to congestion in the ports related to the COVID controls.

Starting today, January 21, Hutchison Ports said the Yantian International Container Terminal, one of the large parts of the Shenzhen region which is China’s third-busiest container port, would begin limiting the arrival of export containers. Yantian, they reported, will only receive export laden containers for vessels with an estimated time of berthing within 4 days.

“We are now under the peak season before the Chinese New Year,” advises Hutchison advising that in recent days “there are many laden boxes stuck inside the terminal and the yard density is close to a full scenario.” In the past two weeks, Hutchison says vessels scheduled to arrive at Yantian were on average delayed over 170 hours with an on-time ratio of less than 20 percent. “The number of the arrival of vessels (mainly on U.S. and EU service) has dropped sharply by over 40 percent,” they reported prompting them to start the limits on export containers until the backlog can be reduced.

The export backlog comes at a time when China’s ports had dramatically reduced the median time containers spent in a depot. Container xChange found in a recent study that short of capacity, shippers and Chinese ports were moving containers in and out of China at record speed. The average median time containers spent in Chinese depots dropped to just five days in 2021 down from 61 days in 2020 according to Container xChange and Fraunhofer – CMI. China had the lowest overall average media time among the large global ports in 2021 with all of the Chinese ports except Shenzhen turning boxes around in just a matter of days.