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Shipping Crisis Looms With COVID-19 Outbreak In Southern China

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The ultra large container ship CSCL Indian Ocean of the China Shipping Line moored | Shipping Crisis Looms With COVID-19 Outbreak In Southern China | featured

Another COVID-19 outbreak reported in Southern China is threatening another looming shipping crisis. This latest setback follows two major crises earlier this year and in 2020.

Earlier, a shortage of shipping containers in 2020 jacked up prices. Then, the massive shipping backlog earlier this year due to the Suez Canal blockage wreaked havoc on delivery schedules worldwide. 

RELATED: Suez Canal Traffic Jam Costs $400M an Hour in Delayed Goods

COVID-19 Outbreak In Southern China

Businesses and consumers are bracing for another shipping crisis, this time with roots in Southern China. A COVID-19 outbreak in Guangdong province is disrupting port services, delaying deliveries, and pushing up delivery costs yet again.

Chinese authorities have quickly responded by shutting down districts and businesses to isolate the virus and prevent it from spreading further.

Already, the shutdown led to massive shipping backlogs in major Chinese ports. The already high shipping costs continue to increase as waiting times at berth continue to pile up.

Brian Glick, founder, and CEO at supply chain integration platform Chain.io observed the increased delays in Chinese ports. “The disruptions in Shenzhen and Guangzhou are absolutely massive.

Alone, they would have an unprecedented supply chain impact,” he said. Given the earlier challenges the industry faced, shipping is now in “absolutely uncharted waters,” Glick added.

Guangdong Hit With Delta Variant COVID-19 Outbreak

A quarter of all Chinese exports pass through Guangdong, China’s major Southern hub. It is also home to the Shenzhen and Guangzhou ports, the third and fifth largest ports by container value in the world.

Guangzhou reportedly got hit with the COVID-19 Delta variant in May. The delta variant is the one first detected in India. The infection quickly spread to cover 100 cases, which prompted authorities to impose lockdowns.  

The outbreak couldn’t come at a more difficult time. Prior to the Guangdong COVID-19 outbreak, a backlog of shipping containers left ports unable to dispatch deliveries, leading to massive delays.

A buying boom during the early days of the recovery period wiped out the stock of containers. The delays led to price increases as deliveries took a hit all over the world.

Then, one of the world’s largest container ships, the Ever Given, ran aground the Suez Canal, blocking a major trade artery and grounding shipping for a week for 12% of the world’s commerce.

It sparked a global shipping crisis and caused a $9 billion a day disruption in international trade. Just as shipping is almost recovered, the southern China virus crisis is sowing chaos again.

Watch the Al-Jazeera news network reporting that China on alert amid new COVID outbreak in the south:

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