Covid-19 Creates Chaos in Vietnam and China – What Does This Mean For Shipping?

In China, ports at Shanghai and Ningbo are reportedly facing additional congestion from new Covid restrictions. The two ports were hit hard by a typhoon late last month and have seen productivity slow as new anti-Covid measures are being carried out at most Chinese quaysides in the wake of the sudden spread of the delta variant of Covid-19 over the past three weeks.

Several Chinese cities, including Zhangjiajie, Zhengzhou and Beijing have restricted movements such as limiting public transport, locking down specific neighbourhoods and banning residents from travelling, but most have yet to impose a city-wide lockdown.

Meanwhile, the lockdown in South Vietnam has caused a 100,000 teu pile-up at Ho Chi Minh City’s Cat Lai port.

According to Saigon Newport (SNP), the leading port operator in Vietnam, yard density at Cat Lai port is currently around 85%, with 106,700 teu clogging the terminal, although 2,000 containers were cleared a few days ago.

SNP said it had experienced a “rapid surge in the volume of over-dwelled import containers” at Cat Lai, which had negatively impacted vessel handling, and has implemented measures to encourage shippers to pick up their cargo, including offering free transport to nearby depots.

A Ho Chi Minh based forwarder’s owner, Marc Guilhem, said many factories had closed or reduced production to 50%-70% during the lockdown.

“So containers are piling up with nobody picking them up, and they don’t have room for new containers coming in. “So far we can still use Cat Lai, but they’re going to have to distribute more container blocks to the other smaller terminals.” Mr Guilhem said.

Vung Tau’s Cai Mep port is the deepwater alternative to Cat Lai, and Mr Guilhem said its terminals were “operating fine”, but added: “The problem is it’s much further away, so who then pays for the additional trucking or barge fees?”

He added, “freight rates have gone up five times already, it’s getting really out of control.” He also commented that there were still equipment shortages, which have persisted since the pandemic began.

According to Maersk’s latest update, some factories are expected to reopen next week, meaning empty container availability could worsen.

“As factories start to reopen and manufacturing starts to ramp up…[the] expectation is that we will once again experience severe equipment shortages in the southern provinces in the weeks to come,” Maersk said, noting equipment supply in the north was also “extremely tight”.

Maersk added: “From a vessel schedule standpoint, sailings have largely continued as planned, albeit with some departure delays.”

However, with Maersk also noting the deteriorating Covid situation in China, it listed some 14 transpacific sailings as being delayed over the next 10 weeks.

Aerial view of shipping containers

Information sourced from here, here, here & here.

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