Strict anti-epidemic, China closed a wharf after 1 case of Covid-19

Strict anti-epidemic, China closed the container port after 1 case of Covid-19

China has closed a key container port in the Ningbo – Zhushan port complex after an employee was identified with Covid-19, according to CNBC.

The Ningbo – Zhoushan port complex has closed one of its key container ports after an employee was confirmed to be infected with Covid-19. Photo: Reuters

The Ningbo – Zhoushan port complex in Zhejiang province (China) is the third busiest port in the world, handling up to 27-28 million TEUs (equivalent to 20 feet) of container cargo each year. Experts say that the port closure Meishan Inside the Ningbo – Zhoushan port complex shows China’s determination to implement a “no Covid-19” tightening policy, but the move is likely to put more pressure on already strained global supply chains. straight from the beginning of the year.

Analysts say that China’s “zero tolerance” approach to the Covid-19 epidemic will exacerbate the “illness” of supply chains that have deteriorated this year. Some experts warn that this may not be the last closure at a seaport in China, if Beijing continues to maintain its current anti-Covid-19 stance.

According to Dawn Tiura, CEO of Sourcing Industry Group – an association specialized in the procurement and outsourcing industry, China’s tough anti-epidemic stance will have “serious” consequences for supply chains. .

“China has zero tolerance for Covid. One person testing positive is enough to close the port,” Dawn Tiura commented to CNBC.

The Ningbo – Zhoushan port complex is the third largest port area in the world, based on container handling capacity. In 2019, the port complex handled 27.49 million TEUs of container cargo, according to the World Shipping Council. Container throughput in 2020 of Ningbo – Zhoushan Port increased by nearly 5%, reaching 28.72 million TEUs.

All services to and from Meishan Port in the Ningbo-Zhushan Port Complex have been suspended from August 11 until further notice, according to Chinese state media. Worth mentioning, Meishan is an important container port specializing in handling goods to Europe and North America. In 2020, Meishan Port handled more than 5.4 million TEUs of container cargo, the South China Morning Post reported.

This is not the first time China has suspended operations at one of its key ports. Previously, the Covid-19 epidemic also disrupted operations at logistics centers in southern China, including key ports in Shenzhen and Guangzhou. In May, Yantian port authorities in the city of Shenzhen were forced to suspend operations at this port to prevent the spread of Covid-19, according to the Indian Express.

Not only taking the “hit” of Covid-19, global supply chains have also been severely disrupted since the beginning of the year by two logistics crises due to lack of empty containers and traffic congestion through the Suez Canal.

Nick Marro, head of global trade at market research and analysis firm Economist Intelligence Unit, said that China’s application of a tough response to Covid-19 shows that this disruption at the Ningbo-Zhushan Port Complex may not be the last.

“China’s ‘no-Covid’ approach means that local officials will prioritize fighting the epidemic over everything else, especially given the dangerous contagious nature of the Delta strain and the risks that the outbreak poses. What the current findings have on economic activity in the third quarter,” said Nick Marro.

This expert said: “Once the authorities maintain this ‘no Covid’ policy, the risk of having to suddenly suspend operations (at seaports – BTV) to conduct testing or blockade will There is still hope, along with the hope of a return to normal according to the national vaccination schedule.”

China recently recorded an increase in the number of infections due to the Delta variant. According to Reuters, the number of daily Covid-19 cases in China surpassed 140 earlier this week, the highest level since January 2021. Chinese authorities have ordered mass Covid-19 testing in some areas and imposed widespread restrictions on movement in major cities, including Beijing.

The shutdown at Meishan port comes amid soaring container freight rates. Container freight rates from China and East Asia to the West Coast of North America have increased 2.7 times since the start of the year to more than $15,800 per TEU, according to the Freightos Baltic global container shipping index. The cost of shipping containers to the east coast of North America also increased 2.2 times, to more than 17,500 USD/TEU.

Experts have warned that the shipping and logistics industry will suffer from further delays in deliveries and consumers may face increased costs due to these delays.

The CEO of Sourcing Industry Group said that the Covid-19 outbreak in China in June caused 70% of exports through the port of Yantian, Shenzhen, while waiting time for goods to be processed doubled. 3 times from 3 to 9 days.

“If we had something like that here and the porting times were doubled or tripled, we would see a significant and lasting impact on exports, affecting the buying season. shopping for the upcoming holiday and increase inflation,” said Ms. Tiura.

“Container shortages already put a strain on global supply chains. Now that Ningbo – Zhushan is the third largest container port complex in the world, the closure here makes the situation even worse. worse,” said Ms. Tiura. According to this expert, the cost of shipping by containers is likely to continue to increase, and shippers will likely pass the costs on to consumers, pushing up global inflation further.

Mario Ciabarra, CEO of data analytics company Quantum Metric, warned that retailers will face a lot of uncertainty as they head into the upcoming holiday season, and inventory challenges will be one of them. there. “Inventory levels will be a primary concern for retailers when they are faced with movement restrictions, the risk of emptying certain items, or increased costs due to freight. by air,” noted Mario Ciabarra.

More broadly, Nick Marro, head of global trade at market research and analysis firm Economist Intelligence Unit, said: “Trade disruptions are not just causing problems for the transport industry and consumers. , but also affects manufacturers who are dependent on important imported components.”