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China Port Shutdown Will Lead To More Shortages

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Container cargo freight ship with working crane bridge discharge | China Port Shutdown Will Lead To More Shortages | featured

A port shutdown in one of China’s busiest areas is threatening a repeat of last year’s shipping nightmares. Due to a COVID-19 outbreak in the Ningbo-Zhoushan port, China decided to shut down the area until further notice. The Ningbo-Zhoushan port is the world’s third busiest container port. 

RELATED: Shipping Crisis Looms With COVID-19 Outbreak In Southern China

Ningbo-Zhousan Port Shutdown Due to COVID-19

Last Wednesday,  authorities put a stop on all inbound and outbound container services at the Meishan terminal in the Ningbo-Zhoushan Port.

Earlier, an employee tested positive for coronavirus, sparking fears that another outbreak will spread in the area. Even worse, there are fears of a delta variant spread, which can close the port for a longer period of time. 

The shutdown is now threatening to further strain an already fragile global supply chain. The timing couldn’t be more problematic, as a key shopping season is approaching.

If the ports stop operating, many items anticipated for the thanksgiving and Christmas seasons are at risk to arrive late. This early, any delays in shipping can lead to further shortages in the market, which can lead to higher prices and lower growth.

If the Ningbo-Zhoushan closure will drag on for months, expect companies to lose on holiday sales.  

Port Shutdown Will Create A Big Impact

The Meishan terminal accounts for 25% of Ningbo-Zhousan’s port operations. According to security consultant GardaWorld, “the suspension could severely impact cargo handling and shipping” worldwide. In fact, Germany’s Hapag-Lloyd AG already announced delays in its scheduled sailings.

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The Meishan closure is the second time a major China port has closed due to coronavirus. Last May, the port shutdown in Shenzen lasted for a month. As a result, many goods piled up in factories and storage years. This also led to higher freight rates, as demand for limited shipping operations rose. 

Los Angeles Port Braces For Delays

Meanwhile, the Los Angeles port is bracing for another slowdown due to the Ningbo-Zhoushan port shutdown. The US port already saw volumes go down last June because of the COVID outbreak in Yantian last summer.

Anton Posner, CEO of supply-chain company Mercury Resources, said that many companies are taking note. Many firms who chartered ships are already adding COVID contract clauses as insurance so they won’t have to pay for stranded ships.

The recent port shutdown is also raising concerns that other ports worldwide will face shutdowns due to COVID. Many economies already felt the impact of delayed shipping of perishable items to electronics.

As a result, many areas are dealing with higher shipping costs and higher product costs. Limited operations are also affecting how companies are handling their reopening. 

Continued Operations

In a statement issued late Thursday, the management of Ningbo-Zhousan said all other terminals except Meishan will continue operations. They are also meeting with shipping companies and directing them to other nearby terminals.

To minimize the impact of the port shutdown, officials said they’re adjusting operating hours so that clients can clear their shipments faster.

According to Ningbo’s Customs Bureau, the biggest exports passing through this port include electronic goods, textiles, and low and high-end manufactured goods. Top imports included crude oil, electronics, raw chemicals, and agricultural products.

Meanwhile, Ningbo city remains a low-risk virus area, as reported by the city health commission. However, all flights to and from Beijing remained closed.

Watch the DW News video reporting that Port closures in China hamper global supply chains:

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Do you foresee many other shutdowns in ports around the world due to delta variants? Also, do you foresee a higher cost of goods within the next few months due to shipping disruptions?

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4 Comments

4 Comments

  • The professor says:

    Just remember all you need are 2 tablespoons of peanut butter or a banana or an apple to survive every day …. you don’t have to have three square meals a day … just make sure you’ve got plenty of toilet paper paper towels and some bottled water …. these communist Chinese deserve everything they get screw them look what they’ve done to us with this Wuhan Xpress virus …. I refuse to say COVID-19 it’s the communist Chinese party virus they screwed us and what are we doing …and what’ssleepy Joe doing he’s waiting for someone to pull his strings so he can pretend to be our president …. I hope every Chinese port shuts down I hope they all shut down ….we all need to adapt to improvise to be aware of our surroundings this ain’t no dress rehearsal…

  • Brian J Duchnowski says:

    I agree with the professor!! This is just the beginning…wait for the finale.

  • Reggie says:

    To “The Professor”: Terrific reply! I agree!
    I’m sure whatever these Commie murderers are doing is only to benefit themselves, and to spite everyone else, especially their own people.

  • The professor says:

    Thank you Brian and thank you Reggie ….. but seriously we need to contact our representatives sleepy Joe has got to go …. that should be our slogan sleepy Joe has got to go …. I know a lot of families are working and raising their kids and they might not have the time to contact your representatives but you have to make time we are going through a tremendous time right now …. not only with China but the closing of Afghanistan …. I hope a lot of people can contact your representatives Senators congressmen governors and express their views I think it’s the only way we can make a change and remember sleepy Joe asked to go

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