Temporary Shuttering of Meidong Terminal in China
A positive test for coronavirus on a vaccinated individual, working for an undisclosed carrier, led to shipping delays and the temporary shuttering of Meidong terminal in Ningbo, China, the country’s second largest container port, according to Reuters. The shutdown of the terminal, at 3:30 AM local time on Tuesday, August 10th, was the result of China’s tighter restrictions as it attempts to fight the most recent outbreak of coronavirus within its borders.
The backlog of ships queuing to call at Ningbo stood at 37 vessels as of Friday, August 13th, down from a peak of 39 the day before. Ningbo Zhoushan Port Co Ltd, the owner of Meidong terminal, was forced to make quick decisions to divert incoming vessels to neighboring ports in Ningbo and Shanghai. Nearby Yangshan port in Shanghai was facing a backlog of 29 vessels of its own at the time of the report. Unfortunately, the timing could not be worse, as ports in the East China Sea are still playing catch up due to disruptions stemming from Typhoon In-Fa, that struck hard in July.
Backlog Keeps Building
The ocean logistics chain is already stretched to its utmost limit, with 100% capacity on all ocean-going vessels; making it exceedingly difficult to lower the backlog, especially at an integral terminus such as Meidong, which accounted for 5.44 million TEUs, or 17% of the city’s total container handling volume in 2020.
Amid no signs of lessening demand from the US and Europe, this latest domino effect of port congestion could push container shipping rates even higher, after setting an all-time record north of $20,000 per 40-foot box just last week. In addition to Ningbo and Shanghai, the Yangtze River estuary has seen particularly acute congestion. Experts are warning businesses to consider contingency plans as the U.S. ramps up for the holiday shopping season.
Shipping Companies Staying Optimistic
There is still optimism that the Ningbo shutdown will be less dramatic than that experienced in Yantian, near Hong Kong in the South China Sea. Over 150 ships were diverted or skipped calls entirely in May. Thorsten Meincke, DB Schenker board member for air and freight expressed hope Meidong will be able to isolate any infection and quickly resume operations as normal. “If they don’t open the terminal today or tomorrow, then the impact will be super massive. Ningbo is in the epicenter of greater Shanghai,” he was quoted in an interview with JOC.com.
Forwarders anticipate a phased reopening of the Meidong terminal to begin on Wednesday, August 18th, following testing on 50,000 individuals showing no new cases of COVID-19. In order to clear the backlog, no new cargo will be accepted until a week later, on August 25th, with normal operations expected to resume on September 1st.
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