Global shipments sounded the alarm! Many large ports are heavily congested and cannot pick up the goods!

On the morning of August 11, a person with a positive nucleic acid tested for the new crown virus was found at Ningbo Zhoushan Port Terminal, who was a strapping worker for Ningbo Meidong Container Terminal. At present, all close contacts and second-secret contacts were identified in the investigation and controlled in place. Relevant sites suspended operations and carried out environmental disinfection.

Meidong Company immediately issued a notice: at 3 o'clock in the morning on August 11, the customs checkpoint in the Meishan Bonded Port Area was temporarily closed, outside container trucks were prohibited from entering, the exit checkpoint was closed, and outside container trucks and all personnel stranded in the port were prohibited going out. Meishan Wharf also issued a notice about the suspension of the service of carrying containers at around 6 am on August 11.

Zhoushan Port is the world's largest port in terms of cargo throughput. The current suspension of container pick-up services will have an impact on the already chaotic shipping market.

Judah Levine, head of research at Freightos, a shipping tracking company, said that if China closes some ports, then freight rates will continue to rise, which means that the market needs to increase capacity by 25% to handle the same amount of cargo. The imbalance between supply and demand caused by continuous congestion and delays has caused freight rates to get out of control.

Under the current severe situation, China response to the prevention and control of the import of the epidemic is very rapid. The Discipline Inspection and Supervision Team of the General Administration of Customs has set up a supervision team to go to Tianjin, Shijiazhuang, Harbin, Fuzhou, Qingdao, Jinan and other six directly-affiliated customs special inspections for a week. Focusing on the prevention and control of port epidemics, monitoring and testing of imported and exported goods, preventive disinfection, exit protection of new coronavirus vaccines, and laboratory testing. In addition, a number of special supervision and inspections have been carried out, such as the supervision of export anti-epidemic materials and combating illegal exit of the new crown vaccine.

However, many major ports in the world have been captured by the Delta variant virus and almost lost their ability to operate!

 1. High risk of abandonment in Chittagong, Bangladesh  

Since the outbreak of the new crown pneumonia in Chittagong last March, 48 workers and their families had died of the new crown pneumonia, and 4 people died on August 4 alone. So far, about 12,266 coronavirus samples have been collected at Chittagong Port Hospital, of which 1,788 have tested positive.

Chittagong is the largest port in Bangladesh. It is located on the northeast coast of the Bay of Bengal. It is responsible for more than 70% of Bangladesh's import and export cargo transportation. At present, more than 4,000 containers arrive at the port every day, and more than 60% of the cargo comes from China. April to October each year is the busiest season in Chittagong Port. The epidemic has caused this port which is already known as the "No. 1 Block in the World" into an endless loop.

At present, Chittagong Port has reached the worst situation. More than 40,000 TEUs of imported goods have been stacked at the terminal for nearly 2 weeks, and more than 50,000 TEUs of cargo are outside the terminal. In addition, there are more than 20 ships in the port area. These ships have been waiting for entry into port for more than a week. The Bangladesh National Revenue Service has allowed all types of containers to be transported outside the terminal, but this has not provided any relief.

The Bangladeshi importers said that since the local area began to implement strict epidemic prevention measures on July 23, the factory was closed, so they could not handle the arrival of the goods.

The Chittagong Port Authority had threatened to punish importers who failed to pick up the goods within 4 days of unloading at the port terminal. In Chittagong, importers do not need to pay the rent for storage of containers during the first four days of unloading the containers. The rent will be collected from the fifth day. According to the Chittagong Working Regulations, when the number of containers in the yard increases, the authorities can impose punitive rents on the containers that have been detained for overdue periods.

Under the current circumstances, Chinese exporters must be careful not to abandon goods from Bangladeshi importers whose containers are stuck in Chittagong!

2. Vietnam's two major ports suspend receiving some containers

Currently, one third of the entire country in Vietnam is under epidemic lockdown, mainly in southern Vietnam.

Also due to the blockade, factories were shut down, warehouses were shut down, and imported goods were unhandled, causing serious congestion in southern Vietnam’s ports. The largest port in Ho Chi Minh City, Cat Lai, has a backlog of more than 100,000 TEUs. The container yard density has reached 85%.

The two major ports in Vietnam, Gloria Port Terminal and Xingang Gemei International Port Terminal (TCIT) have notified that they will suspend receiving some containers from August 5, 2021.

In addition, the chaotic port situation is spreading northward. Previously, the Vietnamese government decided to block the port of Quy Nhon in the central region of the country, where a larger outbreak has been detected. The foreign anchorage located in Haiphong in the northern part of the country is also very busy. Traffic jams at the Friendship Pass on the Sino-Vietnamese border are also quite serious.

Due to the severe epidemic in Southeast Asia, the current freight rate from this region to North America has soared by 15%-25%, and the freight rate to the east of the United States is as high as US$20,000 to 25,000, and the rate to the west of the United States has also reached US$16,000 to 20,000.

3. Waiting for unloading at US West Port

According to the latest data from the signal platform of the Port of Los Angeles, there are currently 19 container ships waiting at anchorages in Southern California and 11 ships waiting outside the port, with an average waiting time of 5.8 days.

Above, is there any container ship carrying your cargo?

According to Drewry’s latest report, of the 496 voyages on major routes across the Pacific, transatlantic, Asia to Northern Europe, and the Mediterranean, 24 voyages have been announced to be cancelled between week 31 and week 34, with a cancellation rate of 5%. According to the latest statistics of Seaexplorer, there are as many as 396 container ships berthed in Port Congestion worldwide.

(Red dots represent the fleet of ships, and orange represent congested or disrupted ports)

American freight forwarding company Flexport also stated that the transit time from Shanghai to Chicago via Los Angeles and Long Beach has increased from 35 days to 73 days. This means that it takes about 146 days for a container to depart from the port of origin and return to the port of origin, which is equivalent to a 50% reduction in the available capacity in the market.

The time required for a container to be loaded and unloaded from the ship to the terminal train is 18 days in Seattle, two weeks in Oakland, and more than a week in the Port of Savannah. Shipping delays delayed the equivalent of 25% of all trans-Pacific capacity, while demand surged by 25% over the same period.

Kazayan, the founder of Freight Right Global Logistics, said, “In May, we were already shipping Christmas products. As long as there are vacancies, someone will try to ship their products to the United States. They won’t wait until September.”

The global supply chain has been burning hot and extremely fragile.