On the way to further delays in shipments? China has closed a major shipping terminal at Ningbo.Zushan port after one worker was found positive for Corona. This is a move that is expected to put additional pressure on supply chains, which are already tight and congested. This was the second time this year that China has stopped operations at one of its major shipping terminals.
All import and export services in the Mishan supplement at the port were suspended last Wednesday until further notice, according to Chinese state media. This is a terminal that handles ships departing and arriving in Europe and North America.
Ningbo.Zushan Port is the third busiest port in the world in terms of container volume. In 2019, the port handled 27.49 million TEUs (a unit of measurement representing a 20.foot container), according to the World Shipping Council (WSC). In 2020 the volume of containers increased by almost 5% to 28.72 million TEUs.
The cessation of activity in the Mishan supplement comes as container shipping rates continue to climb this year. Thus, shipping prices from China and East Asia to the west coast of North America jumped more than 270% this year to over $ 15.8 thousand per TEU, while to the east coast they jumped by 220% to $ 17.5 thousand, according to the Global Container Index of Containers of Freightos Baltic global.
Impact on the level of inflation
Supply chains have been hit this year by a number of crises, such as the shortage of containers and the blockage of the Suez Canal. Last June, corona eruptions caused disruptions in shipping centers in southern China, including the major ports of Shenzhen and Guangzhou.
CNBC notes that analysts believe China’s “zero tolerance” policy for the corona plague is likely to increase pressure on supply chains. Some analysts warn that as long as China continues to hold this position, this is not the last port closure.
“China’s zero.inclusion policy means the authorities will prefer to focus on reducing morbidity at the expense of other things, certainly given the high variance rate of variant Delta and the risks posed by the current outbreak for future economic performance in the third quarter,” World Trade Research chief Nick Marrow wrote in a review this week. Of the Economist. “As long as the authorities persist in this policy, the risk of sudden disturbances due to corona testing or closure still exists. This means that any hope of returning to routine is closely linked to national vaccination campaigns.”
Don Tiora, CEO of sourcing industry group, told CNBC that the eruption of the corona at the port of Shenzhen in June caused export activity at one of the major terminals to be cut by 70% and the waiting time to handle ships jumped from three days to 8 or 9 days. We are dealing with something similar now, and ship handling time will double or triple, we will see a substantial and long.term impact on exports, impact on the holiday shopping season and rising inflation, “Tiora told CNBC.” The shortage of containers is already hurting supply chains. Given that Ningbo.Zushan port is the third largest in the world, the current downturn is making a bad situation much worse. ”
Quantum Metric research CEO Mario Chiberra told CNBC that retailers are expected to face uncertainty in the upcoming holiday season. “Inventory management will be the retailers’ main concern. “They will have to decide between holding limited inventory and paying the higher costs of air shipments,” he noted.
The number of corona cases in China has recently climbed due to the Delta variant. Thus, on Monday this week 140 cases were recorded – the highest daily number since January. However, then a decline began to register. According to Reuters, only 66 new cases were reported in China yesterday, 36 of them people who had returned from abroad.