If U.S. ports are contending with headaches, ports in China are facing massive migraines.
Data from project44, a supply chain visibility provider, shows that as of Oct. 7, there were some 386 ships either anchored or moored off the Chinese ports of Shanghai and Ningbo. Among those ships were 45 container vessels and 228 cargo ships.
Those traffic jams affect supply and demand halfway around the world because the freight passing through Chinese ports accounts for 40 percent of global container trade. Shanghai is the world’s busiest container port; Ningbo is third.
Project44 said the berthing delays are the result of lingering backlogs from the COVID-19 closure of Ningbo port, the impact of Typhoon Chanthu, and the recent Golden Week between October 1 to 7, a holiday celebration which closes businesses, schools, and government.
Shippers are especially concerned because Chinese ports are not making significant headway in dealing with the excess cargo, the firm said.
Those delays can be measured by container rollover rates, which are defined as the percentage of containers that miss their scheduled sailings. Data from project44 shows that those rates have stayed high, with September numbers reaching 36 percent at Ningbo, 41 percent at Hong Kong, and 37 percent at Shanghai.
The report said freight could soon slow down even more as a result of a power-shortage crisis caused by a national electricity ration. Facing mandatory power limits and shortages of coal reserves, manufacturers may be forced to scale back just as demand heats up. This could create “global whiplash effect,” the firm said.
“We can expect these growing backlogs across Chinese manufacturers and ports to exacerbate imbalances at U.S. and European ports,” said project44’s Josh Brazil said in a release. “As it becomes increasingly hard to get inventory from factory floors to end-consumers, competition for shipping capacity will heat up. The challenge is less about achieving full inventory—that ship has sailed—and more about adapting to, and planning for, future disruption.”
Source: DC Velocity