Supply Chains Pressured in China as Ships Avoid Virus-Hit Port

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The world’s shipping lines are avoiding a key port in China hit by a Covid-19 outbreak, causing increased congestion at other seaports across the country that likely will delay the delivery of goods to the U.S. and Europe.

Tightened health and safety checks have caused congestion and reduced productivity at the port of Yantian, prompting the cancellation of calls there, according to a notice from Mediterranean Shipping Co. on Wednesday. The port located in Shenzhen stopped accepting export-bound container boxes last week and suspended three berths after a coronavirus cluster emerged among the port staff and broader community.

The skipping of Yantian by ships has led to growing congestion at neighboring ports in the country, said Jason Duboe, chief growth officer of logistics start-up project44. Although shipping firms are indicating that the port is now accepting export containers, customers should expect delays of seven-to-10 days, he said.

Any bottlenecks will inflict further pain on exporters and importers struggling with stretched supply chains. The cost of shipping goods from China is already sky-high because of record export demand, a shortage of containers and other factors. Vessels have been racing to deliver everything from electronic vaping devices to frozen food and furniture to American and European consumers amid a surge in e-commerce.

Shenzhen, which includes Yantian, is the world’s fourth-busiest container port and a key node for the shipment of Southern China’s goods.

French shipping company CMA CGM SA asked customers on Thursday to consider loading their cargoes at Nansha in South China. Meanwhile, project44 expects other traffic to also be diverted to Shanghai, Ningbo and Xiamen.

Even after the Yantian situation clears up and normal exports resume, the U.S. and Europe will likely experience a delayed impact as inbound congestion builds up, said Duboe.

“Yantian sees a lot of volume destined for the United States flow through it,” he said.

©2021 Bloomberg L.P.

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