Supply chain congestion surrounding the Pearl River Delta will undoubtedly ripple to global supply chains, given the volume of goods and exports that flow out of southern China.
Annual throughput at Yantian is more than 13 million TEUs. (For comparison, the Port of Los Angeles handles more than 9 million TEUs annually.) Yet the port is operating at a productivity level around 30% of its normal levels, according to Maersk.
Lars Jensen, CEO and partner at Vespucci Maritime, estimated the two weeks of disruption at the port to date, combined with 30% operating productivity, amounts to 357,000 TEUs that Yantian has been unable to handle.
The challenges at Yantian are the latest in a saga of global container shipping issues that have plagued shippers, forwarders and carriers for more than a year — from port congestion, to equipment shortages, to blank sailing, to skyrocketing freight rates. Many importers have pivoted to airfreight given ongoing capacity and timeliness issues in ocean freight, although air cargo space is also limited.
Analysts and industry stakeholders do not anticipate a swift resolution to the port congestion or container availability issues at ports in southern China.
“The situation continues to deteriorate as more positive COVID cases have been confirmed in Shenzhen where Yantian port and Shekou port are located and in Guangzhou where Nansha port is located,” Maersk wrote in a Tuesday advisory. The carrier said it expects vessel delays of 15 days and has suspended operations in the western part of the Yantian terminal.
As operations continue to stall at the terminal, dozens of vessels are waiting at the port. As of Wednesday, Marine Traffic showed 26 vessels in port, and Sara Hutchinson, international trade expert at RISA (UK), said there were around 40 vessels waiting to enter around the beginning of June.
“In normal circumstances it would be around five,” Hutchinson wrote on LinkedIn.
She advised businesses dealing with the region to add at least two weeks of transit time to account for delays and to expect rising freight rates.
Jensen also warned of congestion at destination ports as Yantian and the ports in southern China resume normal operations.
“This in turn will cause ripples of potential congestion at the destination with a lag time of some 2-5 weeks,” he wrote.
Source: Supply Chain Dive