Medicinal

China’s Covid-19 flare up threatens backlog in Shenzhen’s busy port

Cargo ships accumulate in one of China’s busiest ports after the outbreak of another Covid-19 in Shenzhen, closing factories and warehouses, a new bottleneck that could boost freight rates and delay delivery Is increasing the possibility of.

More than 35 ships are moored in Shenzhen, and more than 30 more are moored in Qingdao. China’s exports to the United States Shenzhen remains open, but most manufacturing plants and warehouses were ordered to close last week, and container loads are declining rapidly as fewer trucks arrive.

“I have a lot of bikes, but I’ve been stuck 16 km on the highway into the harbor for almost two days,” said Wei Wu, a truck driver traveling through the boxes of European container and logistics operators. rice field. It needs to be tested repeatedly, but I’m not sure if the ship will be allowed to enter the port. “

Qingdao in this February photo is one of the Chinese ports waiting for ships to berth.


Photo:

Costfoto / Zuma Press

The blockade in Shenzhen was after President Xi Jinping told Jinping at a Politburo meeting that the pandemic should “minimize the impact” on the country’s economy while adhering to the zero Covid-19 policy. It was partially released.

The Shenzhen government said Friday that more than 12 million cities have resumed work on several factories along with public transport.

The Covid-19 outbreak closed the Yantian Terminal for almost a month in June, backlogging tens of thousands of containers and waiting for dozens of ships to be loaded outside Shenzhen. Eventually it returned across the Pacific and caused bottlenecks in the ports of Los Angeles and Long Beach, California.

The outbreak of salt pans has reduced operations at the terminal by about 75%, according to shipping brokers, during the blockade as cargo owners attempt to find vessels to move their products by calling at other Chinese ports. Daily fares across the Pacific have skyrocketed to a quarter. ..

In a report last week, freight carrier Seko Worldwide said trucks entering and exiting Shenzhen were restricted, and trucks from Shenzhen to Hong Kong were shut down except for essentials to Hong Kong.

Truck restrictions remain in Shanghai, the world’s largest port, and some ships are rerouting to Ningbo.

Hong Kong faces a record surge in Covid-19 and the highest mortality rate in the world, urging authorities to impose strict restrictions. WSJ’s Diana Chan reports on how Hong Kong’s daily life has changed, from panic buying to the outflow of residents.Photo: Emmanuel Serna / Zuma Press

AP Moller-MaerskAS, a Danish boxship company, said the Shenzhen terminal is up but has an emergency response plan and can detour the ship if Covid-19 restrictions remain. I did.

Kuehne + Nagel International AG

A Swiss-based logistics operator said truck drivers arriving in Shenzhen may be switched to avoid delays due to restrictions on intercity transportation, and vessels will berth in salt pans on average about three and a half days. He said he was waiting.

According to the Freightos Baltic Index, fares from China to Los Angeles last week were stable at around $ 16,242 per container from the previous week, but remained at record levels, tripled compared to the same period last year.

Backups outside the Ports of Los Angeles and Long Beach are the two largest gateways to the United States, with 48 vessels on Thursday, down from a record of 109 in early January, according to the Southern California Marine Exchange. He expects a new surge in ships in the coming weeks.

According to analysts, if the Chinese port remains open, a suspension of manufacturing will clear some of the backlogs of the boxes waiting to be loaded, but the warehouse is closed, so there is space for incoming containers. Is difficult to find.

Lars Jensen, Chief Executive Officer of Vespucci Maritime, a Danish-based consulting firm, said: However, China’s Zerocovid resistance and Omicron variants are not a happy combination. “

The recent outbreak has led major manufacturers, including Apple’s supplier Foxconn Technology Group. Ltd,

Toyota Motor Ltd

And Tesla Ltd

Reduce production.

China’s move to contain the outbreak will determine its impact on the global supply chain. About half of China’s exports are produced in areas that address the Covid-19 outbreak, and three-quarters of its exports are shipped from there.

Taiwan-based Foxconn said Wednesday that it was able to resume several businesses on its Shenzhen campus, where workers live in dormitories alongside assembly lines. Tesla will stop production last Wednesday and Thursday, telling employees and suppliers that it is manufacturing Model 3 sedans and Model Y sports utility vehicles in Shanghai.

United Parcel Service Ltd

According to the company’s website, collection and delivery will be suspended in Shenzhen and Dongguan, and imported products will be stored for 4 to 7 days for disinfection in Zhejiang and other provinces.

Write to Costas Paris (costas.paris@wsj.com)

Copyright © 2022 DowJones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

..

About the author

Funviralpark

Leave a Comment