freeport

Port Congestion Update

Exporters and importers are facing a perfect storm as the logistics industry has entered an era of unprecedented disruption, with ports crippled by acute congestion as the malaise faced by China’s Yantian spreads to other ports.

The delays to Chinese exports, which have escalated to 16 days or more for vessels not cancelling their Yantian call, threatens an impact significantly worse than March’s Suez Canal blockage.

According to some experts, the knock-on effect from Yantian, which had been operating at just 20% of normal productivity due to an outbreak of positive Covid-19 cases, will be acutely felt in the coming weeks by retailers and consumers with severe container shortages and shipping delays.
This era of unprecedented supply chain disruption will have a knock on effect with retailers facing supply issues from everything from consumer goods to important PPE.

Ocean carriers are scrambling to mitigate the impact, Maersk, for example, confirming the omission of Yantian on 11 of its services and ad-hoc cancellations on eight others. Omitting Yantian has seen vessels divert to smaller ports like Nansha who’s infrastructure is less robust than that of its larger neighbours.
Yantian port authority has successfully re-opened part of the port, moving productivity back to around 45% of normal, but as and when the pent-up export cargo does move, this huge wave of cargo hitting European and US ports will be extremely challenging for them and their already stretched landside operations.

In the US, ports struggle to cope with peaks more than their European counterparts, but the North Europe port of Hamburg has been under intense pressure in the past few weeks and recently Hapag-Lloyd advised customers of a tightening of restrictions for export cargo deliveries at Antwerp.

Experts warn that carriers could decide to omit the UK to mitigate the impact on their schedules.

“Congestion will rise significantly, meaning that ports, and especially those already suffering such as Felixstowe, will be heavily impacted,” the scale of the issue in South China is already bigger than Suez.”

Two accurate metrics to measure disruption by are days of delay and TEU; in both cases, Yantian far surpasses what happened with the Ever Given.

Horizon International and our local partner Sea Air Logistics continue to monitor the situation and are working together to find alternative solutions where possible for customers.