Christmas season is here, and China has shut down its ports until further notice. Enough to threaten traders’ festive season.
- World’s third busiest port, Ningbo Zhoushan temporarily closed down due to Delta variant cases.
- West suffers a massive supply chain crisis ahead of the festive seasons and remerging demand.
- China shut downs flights to and from Beijing to Ningbo.
- Similar disruption recorded in May, 2020 at the Yantian port, China.
An incident nothing less than a shipping nightmare occurred in 2020 when China’s one of the busiest port temporarily shut down due to virus outbreak. It is happening again. World’s third-busiest cargo port in eastern China, Ningbo-Zhoushan is temporarily on lockdown in the wake of increasing cases of COVID-19.
The shutting down of port has severely threatened worldwide supply chain, worse, right ahead of the Christman season.
The terminals of Meishan island have been shut until further notice, cutting down the cargo capacity by almost a quarter. While the businesses around U.S. and Europe are trying hard to handle the shipping disruption due to port’s temporary shut down, the condition is nothing short of crippling.
This shutdown of the Ningbo-Zhoushan port has further led to possibilities of similar halt around the world as the cases continue remerging globally. A similar shipping nightmare was witnessed in 2020 when everything, from electronics to perishable goods, came to a sudden halt due to COVID-19 restrictions.
China’s port lockdown can shoot up the cost of global supply chain, once again
From 200 container vessels last week, port calls to Ningbo has tumbled down by whopping 70% to just 60 this week. One of the biggest victime of the abrupt halt is Peru, one of the largest trading partner of the country awaiting its crops trade.
Some of the major consequences of this temporary lockdown of China’s port will be experienced in the form of increased freight fares. As many as 28 container vessels were waiting for their berth space, anchored outside the Ningbo-Zhoushan port on Aug 12. As the traffic on the port increases and creates congestion, the port authorities now have to divert ships to other terminals. This directly leads to increase in the freight fares, whether the dry bulks or the container side.
COVID-19 outbreak has already spelled havoc on the supply chain in the U.S. Since last year, the average container shipping cost from Shanghai to Los Angeles has already increased by three times.
Although, the region of Ningbo is relatively less affected by COVID-19 than other parts of China, flights to and from Beijing still stand suspended.
So far, it has been mere few days since the port was shut down. However, anymore stretch of the China’s port lockdown can start to leave severe impact on the global economy. Closure of Ningbo port is the second since the virus outbreak. Last time, it happened in May after Yantian port in Shenzhen was partially shut for several weeks.
However, this disruption is different as it has happened right before the beginning of the Christmas season in the west. Moreover, with massive vaccination drive, life in several parts of the world, are coming back to normal, shooting up demands to pre-COVID levels.
All of this adds to the worry of global traders, waiting for the Ningbo port to reopen.