The troubles for ocean container shippers are rising again, as the Delta variant of the coronavirus shutters portions of a major Chinese port – the result of a single case of an infected worker there.

Supply Chain Digest Says...   All that just adds to a variety of other factors that have sent container shipping rates soaring.     What do you say?   Click here to send us your comments       Click here to see reader feedback

The shutdown at one terminal at the port Ningbo-Zhoushan, the third largest in China, is raising fears that other ports across the globe will soon see the same kind of outbreaks and COVID restrictions that slowed ocean freight flow for most of 200 and continuing on in 2021.

The Ningbo-Zhoushan Port released a statement Aug. 12 that the only terminal closed is Meishan, with the rest operating normally. The release also said that it is actively negotiating with carriers and forwarders, sending them to other terminals and releasing information on a real-time data platform.

Overall, data from supply chain visibility platform Project44 found that shipping delay times increased significantly year-over-year throughout the majority of key commercial trade routes from China to ports worldwide.

For example, project44 commented that on the high volume trade lanes from China to the US West Coast, saying that "While selected China-US West Coast route schedules have improved significantly in recent months, gathered data indicates that multi-day delays on many critical routes remain high, if not increasing, in light of recent Covid variant outbreaks in southwestern China."

The potential impact?

“The fact that shipments are still being delayed and Covid variant breakouts are increasing in key Chinese industrial centers suggest that there may be far-reaching downstream effects leading up to the Black Friday and Christmas shopping seasons,” said Josh Brazil, VP Marketing for project44.

The Port of Los Angeles, which saw its volumes decline a bit June as the result of another COVID outbreak and closure at the Yantian port in China, is said to be bracing for another potential decline due to the Ningbo-Zhoushan situation.

Anton Posner, CEO of supply chain management company Mercury Resources, also noted that many businesses chartering ships already are adding COVID contract clauses as insurance so they won’t have to pay for stranded ships.

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Some ships that docked at the Meishan terminal before the closure are suspending cargo operations until the terminal reopens, according to a notice sent by ocean carrierCMA CGM to shippers.

Other vessels which usually call at the Meishan terminal will stop at the Beilun terminal instead, according to a statement Aug. 12 from Maersk Line. One of the company’s ships will skip Ningbo next week, it said.

All that just adds to a variety of other factors that have sent container shipping rates soaring.

The graphic below from Bloomberg, for example, shows spot rates to ship a 40-foot container from Shanghai to Los Angeles are presently at about $14,000, up from about $5000 at the beginning of the year.

Source: Bloomberg

Retailers are operating at historically low inventory levels that are vulnerable to further disruptions, as companies struggle to ramp up the supply side of the equation.

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