South China continues to impact world shipping as Nansha goes into lockdown

South China continues to impact world shipping as Nansha goes into lockdown

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South China continues to impact world shipping as Nansha goes into lockdown

 

The impact of Covid-19 continues to impact world shipping this week as Nansha goes into lockdown.  Please see an updated summary below of the current impact in these regions:

 

Shenzhen, Yantian Terminal

  • There are 40 Vessels anchored waiting to berth at Yantian.
  • Most shipping lines are omitting Yantian across North America and European trades.
  • Congestion caused by the closure is approximately 25,000 containers expected to take 14 Days or more to recover however this doesn’t take into account the number of bookings and containers that cannot get to the port.
  • 10 Hour Delays to get into Terminal.
  • Chinese Authorities are advising carriers to divert to nearby ports.
  • Major carriers such as Maersk, COSCO, Hapag Lloyd and ONE which make up 4 of the top 7 carriers are advising customers that the delays are growing, congestion is growing and they may not call Yantian.

Nansha  Terminal

  • Nansha terminal is now located in an area locked down by the Government with truck drivers requiring a negative Covid test every three days to be allowed to operate within this area.
  • Nansha is the only deep water port on the Western Pearl River Delta and  Moved  23.51 million TEUs in 2020.
     

How is this affecting the world's shipping?

  • Most carriers are omitting Yantian, some carriers on Europe and North America have also omitted Shekou due to berthing delays. All services to Australia that call Yantian are omitting Yantian until Mid-June, 2021. The change on port rotation affects transit time & empty equipment return.
  • The vessel omissions from Yantian to East Coast Australia mean that this trade lane will be reduced to 40-50% of its available capacity for three weeks.
  • Yantian and Shekou are now only accepting full export containers 3 Days before vessel ETD.
  • All carriers are advising significant equipment shortages.
  • Carries are prioritizing FAK Cargo as they ration equipment and manage the demand for available services with FAK rates being offered on a per booking basis.
  • It will take 4 – 8 Weeks for the situation in Shenzhen to improve.

 

Consideration for managing your supply chain over the coming two months:

  • Container Equipment:                  
    Expected to be critical over the coming two months as carriers avoid calling Yantian meaning empty equipment is unable to be re-positioned back to Shenzhen.
  • Sailings:                          
    Available sailings to Australia have been reduced by 50 – 60% over the coming two weeks.
  • Space Demand:
    Demand is going to outstrip capacity from Southern China based on lack of equipment and reduced services which will take 4 – 8 weeks to improve.
  • Market Rates:
    Market Rates will continue to increase while above points are critical. 
  • Whale Outlook:                        
    • Situation is expected to take 6 - 8 weeks before it settles based on no further disruptions.
    • Equipment to become critical from Southern China.
    • Carriers to drive rates up across all trades as they ration equipment and services.

Whale will continue to monitor and update you on the evolving situation in South China.  Please contact your dedicated Customer Champion if you have any questions relating to this.

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