The latest obstacle hitting global shipping is likely to jolt trade flows for several more weeks and could delay shipments heading into the year-end holiday shopping season. Shipping executives say around 50 container ships remain backed up around the Yantian port in Southern China and that some 350,000 loaded containers are stacked up on docks as the major gateway for China goods heading to Western nations struggles to recover from a Covid-19 outbreak that disrupted operations there.
The ship bottlenecks began in late May when a coronavirus outbreak forced authorities to shut down parts of Guangdong province, which is home to Yantian, one of the world’s busiest ports and a major gateway for containerized exports like electronics, furniture, home appliances and car parts.
Officials at Yantian say cargo-hauling operations that normally handle about 36,000 containers a day are back to 70% of capacity, from 30% earlier this month. But the vessel queue is so long that liner operators are diverting their ships to nearby ports that are also swamped with containers.
“Clearing the big pile of backlogged export cargo from Yantian will be a challenge,” said Lars Jensen, Chief Executive of Denmark-based Vespucci Maritime. “We are coming into peak season with a serious capacity crunch and clearing the backlog will require ships to be diverted away from other ports in Asia, but there are not enough ships available.”
Germany’s Hapag-Lloyd AG , the world’s fifth-largest container operator in terms of capacity, according to marine data provider Alphaliner, said there are around 50 ships waiting to call in at Yantian, down from 70 last week.
“The queue of ships is easing, but everybody is still trotting to berth,” said company spokesman Nils Haupt. “Capacity will stay tight into the fourth quarter and this could affect the year-end shopping season and put more pressure on freight rates.”
The logjam is the latest in a series of disruptions that have battered supply chains around the world this year, leading to shortages of everything from raw materials to consumer goods, raising costs for manufacturers and retailers and undercutting attempts by companies to capitalize on resurgent demand in Western economies.
The weeklong blockage of the Suez Canal in March caused by a grounded container ship pushed back deliveries of roughly 250,000 containers by around a month.
Demand for boxships is mainly driven by Western retailers such as Walmart Inc. and Amazon.com Inc. that have been scrambling to restock after a year of supply-chain disruptions from the pandemic.
At Palmer & Purchase, a boutique women’s clothing and accessories shop in Rye, N.Y., owner Abbie Durkin is trying to ensure that the winter line comes in before the holidays.
“It will be a race to get a full range of merchandise by Christmas,” she said.