“Ripple Effect” – Chinese Port Congestion Soars To Five-Month High 

March 24, 2022   |   Tags:
"Ripple Effect" - Chinese Port Congestion Soars To Five-Month High 

Top Chinese ports in Shenzhen and Hong Kong record some of the largest congestion in nearly half a year due to China's zero-tolerance approach, locking down more than 50 million people and shuttering factories to mitigate the spread of COVID-19. 

Bloomberg reports 174 vessels anchored or loaded off the country's top ports, the largest number since Oct. 21, when a massive typhoon battered the area. 

"Shenzhen is the second-busiest port next to Shanghai, so we will expect to see significant volume shift to the other ports within China," said Ryan Closser, a director at FourKites, a supply-chain information provider.

"A couple more weeks of shutdown may not have a huge disruption, but the longer the area is shut down, the more of a ripple effect it will have," Closser said. 

Even though workers have been sent back to factories, and some lockdowns have been lifted, the disruption alarmed A.P. Møller – Maersk A/S, the world's largest container shipping company by capacity, last Friday, telling clients to expect new supply chain snarls and logistical delays. 

"While manufacturing also takes place in other parts of the country, these delays will still affect output, though not drastically," Maersk said in a memo to clients.

Vessel observation data show increased congestion of container ships at Chinese ports. Meanwhile, congestion at Port of Los Angeles/Long Beach has subsided this year. 

Bloomberg notes the growing threat of "possible delays to goods heading to the U.S. this summer." 

Tyler Durden Thu, 03/24/2022 - 22:00