Clients who engage in trade between China and Australia need to be aware of the growing crisis at ports in Southern China, where shipping traffic is presently caught in a snarl.
The situation follows severe bottlenecks that have bound up major ports in the U.S. and Europe through the pandemic and could last until the end of this month, leading to possible further increases in ocean freight rates.
Yantian is a deep-water port in Shenzhen, Guangdong, China. Heavy congestion at the port has shown little sign of abating and has now spilled over to neighbouring harbours. Containerships are gathering in the Daya Bay and Wanshan Archipelago. About 50 vessels anchoring in this area would normally be destined for terminals in Hong Kong, Shekou and Guangzhou’s Nansha, however, as carriers are forced to omit Yantian, these nearby ports are also under stress due to the massive shift of cargo flows.
Lloyd’s List Intelligence data shows that the number of fully cellular containerships at anchor in the Daya Bay area near Yantian stood at 40 on 04 June. When the bottleneck began over two weeks ago, Hutchison-run Yantian International Container Terminal (YICT) blamed out-of-whack shipping schedules for suspending laden export operations. The facility is facing challenges due to efforts by the local authorities to disinfect and enforce quarantine measures that have led to labour shortages.
Productivity at berths in the western area of YICT, where mainline vessels call, is currently only at 30%. Some of the major shipping lines, including Maersk, have blamed Covid-19 for causing the poor port productivity in the Pearl River Delta.
The disruption at the world’s fourth-busiest container port is putting stress on an already fragile global supply chain. While ships are still calling at Yantian, port activities there remain restricted. Vessels are spending as long as five days at port, as containers for exports are piled high at yards stretched to maximum capacity.
These substantial traffic jams are causing a shortage of trucking capacity; container pick-ups are subject to delays of 10 hours or more and many hauliers require overnight time for haulage, storage and lifting, adding to costs.
By some estimates there was around 25,500 TEU (twenty-foot equivalent unit) container capacity a day that the port had been unable to handle since the crisis began. To put this in perspective, when the Suez Canal was blocked by the Ever Given recently, it impacted a daily flow of 55,000 TEU, but that lasted only 6 days. In Yantian, we are at 14 days and counting – and there is the impact on Nansha and Shekou as well.
Once the ports re-open to normal operations we should expect a surge of cargo – at least to the degree that there are vessels available to handle the flow. This in turn will cause ripples of potential congestion at Australian destinations, with a lag time of some two to five weeks anticipated.
Talk to us here at Colless Young for updated schedules and cargo tracking.
We offer you correct, professional advice on all matters related to international shipping and trade. Based in Brisbane, we provide a complete range of logistics services, both air and sea cargo, through all Australian ports and airports. As licensed Customs Brokers and Freight Forwarders, Colless Young handles import clearance through Customs and quarantine, exports, trucking, warehousing and fumigation treatment.
