Global trade at risk as China partially shuts world's third-largest container port
China partly shut the world’s third-busiest container port after a worker became infected with Covid, threatening more damage to already fragile supply chains and global trade as a key shopping season nears, Al Jazeera reports.
All inbound and outbound container services at Meishan terminal in Ningbo-Zhoushan port were halted on Wednesday until further notice due to a “system disruption,” according to a statement from the port. An employee tested positive for coronavirus, the eastern Chinese city’s government said.
The closed terminal accounts for about 25% of container cargo through the port, calculates security consultant GardaWorld, which said “the suspension could severely impact cargo handling and shipping.” Germany’s Hapag-Lloyd AG said there will be a delay in sailings.
This is the second recent shutdown of a Chinese port due to the coronavirus, after the closure of Yantian port in Shenzhen from late May for about a month. That led goods to back up in factories and storage yards and also likely lifted soaring freight rates, which are at record levels and a source of inflation.
The fear is that this new disruption will further strain shipping and supplies of goods, dampening growth and driving up prices. An extended shuttering at Ningbo could be especially painful for the world economy because seaborne trade usually rises toward the end of the year as companies ship Christmas and holiday products.
“There may be far-reaching downstream consequences going into Black Friday and holiday shopping seasons” and the next 24 hours will determine whether there is a large outbreak or not, said Josh Brazil, vice president of marketing at project44, a supply-chain intelligence firm. “One of the few givens in 2021 is endemic delays, and the fact that conditions can change almost overnight.”
In addition to the closed terminal, containers for shipment through the other terminals in the port will likely slow. The port will now only accept containers within two days of a ship’s estimated arrival time, according to a statement from shipping and logistics firm CMA CGM SA.