Congestion at South China ports – a further stress test for the logistics industry

Congestion at South China ports – a further stress test for the logistics industry

25. June 2021
Container congestion in South China

First the Suez Canal blockage, now congestion in the fourth largest container port in the world: Since the closure of large parts of the container port Yantian at the end of May, container ships have been jammed in front of southern China. The effects of the blockade are now estimated to be even worse than the blockade of the Suez Canal in March. The reason for the closure is the coronavirus outbreak in Guangdong, which led to severe restrictions. Even though the situation in Guangdong seems to be returning to normal in the meantime, as reported by the “tagesschau“, according to Nick Marro, global trade analyst at the Economist Intelligence Unit (EIU) in Hong Kong, the impairments are still to be felt until the end of the year. 

According to a report by the Kiel Institute for the World Economy (IfW), the container port of Yantian has shipped only about 40 percent of its usual container volume in the past 4 weeks. In addition, the number of waiting container ships is increasing rapidly and there are longer waiting times at surrounding ports.

Impact on world trade

As the Kiel Trade Indicator shows, China’s trade as well as global trade is still recording positive values so far. Depending on the development however, this could still change. With the Kiel Trade Indicator, the Kiel Institute for the World Economy analyzes the trade flows (imports and exports) of 75 countries worldwide, the EU and world trade as a whole. The evaluation is based on real-time ship movements, which are translated into growth values compared to the previous month by a programmed algorithm. For world trade for example, this is currently 0.4%. 

The container port of Yantian 

At the world’s fourth largest container port, Yantian, more than 27 million standard containers (TEU) were handled last year. By comparison, Hamburg handled about 8.5 million standard containers.  The only ports larger than Yantian are the ports of Shanghai (43.5 million TEU), Singapore (36.9 million TEU) and Ningbo (28.7 million TEU). Here alone, the scope of the restrictions can be seen. About 90 percent of China’s electronics exports go through Yantian, therefore this industry is currently also particularly affected by the restrictions. Delays are therefore to be expected, particularly for some electronic items such as laptops.

Tense situation in sea freight 

With the container congestion, the already tense situation in sea freight is becoming even more acute. Containers are missing and delays and high freight rates have been keeping sea freight busy for months – a real stress test for the logistics industry. This shows all the more how important it is for the individual players to work together to get a grip on the adverse effects. 

The supply chain management software helps companies to maintain the overview, strengthen collaboration with partners and generate transparency along supply chains. For more information simply attend one of our webinars or contact us directly.

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