Yantian Port is one of the busiest ports in the world. The port, which serves at least 100 ships a week, was partially closed for a week because of the COVID-19 outbreak in Guangdong province in late May. With a total container handling capacity of 13.34m TEU in 2020, Yantian's situation is likely to further damage the already fragile global supply chain.
Container shipping companies, including Maersk and Herberot, have issued statements saying they are rerouting vessels to minimize disruptions at Yantian port. Maersk has suspended all ships in the western port area of the Yantian International Container Terminal (IYICT) until further notice.
According to the official notice of Yantian Port on May 27th, Yantian International will resume receiving inbound heavy containers from 00:00 on May 31st, but only accept export heavy containers within three days prior to the ship's expected arrival date. This measure will be implemented on May 31st solstice on June 6th.
On May 31, as the number of confirmed cases in Shenzhen, home to Yantian and Shekou ports, continued to rise, Maersk again issued a statement saying the situation "continues to deteriorate."
The closure of some operations and disinfection and quarantine measures have led to a growing number of containers at the Yantian International Container Terminal (YICT) yard. At eastern terminals, where most of the cargo is unloaded, "productivity is already down to 30 per cent of normal levels" because of fewer workers.
Maersk said it expected congestion and ship delays at Yantian port to last for seven to eight days over the next week.
In addition, freight rates on the relevant routes also appear to have been affected to a certain extent.
Freight rates from Asia to the west coast of North America are now 236% higher than a year ago. From Asia to the east coast of North America, the increase was 190%. That doesn't include premium rates and other fees paid by U.S. and global importers. U.S. exporters say they pay at least $17,000 per container to ship the goods.
One importer, who asked not to be named, said, "My freight has gone up by 300 percent, and on top of that, I can't guarantee when my goods will arrive as the shipping space is very limited."
According to data from Freightwaves Sonar, the number of TEUs booked from China's Yantian port of departure to all US ports can be seen in the figure below. (The white dotted line represents the TEU for the next seven days.)
The average price of a 40-foot container from a Chinese port to a West Coast (blue) and East Coast (green) port of North America is shown below.
The butterfly effect
The port of Yantian handles nearly 90 per cent of Shenzhen's exports to the US and Europe, and 100 routes are likely to be affected by the shutdown. More delays are likely on European exports to North America, the trans-Pacific and Far East-Nordic trade routes.
Shipping analyst Lars Jensen said shippers around the world, not just those in China, should be concerned about the congestion, as a major outbreak at any Chinese container port could push the resolution of current congestion and container shortages into next year.
After all, the world is completely connected.