Just when we thought the worst was behind us and the world was getting back to something resembling normal, chaos has returned. Shipping delays are currently being reported in China, which are affecting global shipping issues. How will this play into your shipping schedule in the short term and long term?
The Situation: Shipping Delays in China Are Reverberating around the Globe
China’s zero-tolerance policy regarding COVID-19 mitigation is having a ripple effect far beyond its borders. In recent weeks, China has reinstituted lockdowns in Shenzhen and Shanghai in the hopes of quashing COVID-19 cases. That includes having employees work from home, and as we all remember from previous lockdowns, that results in reduced staff in factories and ports.
The Specifics: Shanghai’s Lockdowns Are at the Root of the Problem
Shanghai is the world’s biggest container port, so shipping delays here are felt at many major ports across the globe. Project44 tracks ports and global supply chains in real time, and they report a four-times increase in shipping delays between China and the US and Europe since the end of March. That’s when COVID-19 cases were at their height and Shanghai was placed under lockdown. Although the port has remained open, with the city closed, employers have been stuck following stay-at-home orders.
And it’s not just the ports in Shanghai that are facing issues. Trucks have been challenged with getting to Chinese ports to pick up containers due to COVID-19 testing requirements.
Currently, one in five global container vessels is waiting outside congested ports—and 27.7% of those are in China. That’s due, in part, to the fact that half of the world’s 20 largest container ports are located in China. Shenzhen was another city placed under lockdown this winter/fall, and the ripple continues to be felt across China and around the world.
Projections: Port Delays Could Return to California
Remember when ships were waiting off the coast of Los Angeles port for days? Experts predict a similar situation could be one of the repercussions from the lockdowns in China. Between 10% and 12% of shipping capacity is currently locked in port congestion. Lockdowns in China are partially to blame, as restrictions lesson and ships continue to move to their destinations. Another consideration is that we are moving into the peak season for shipping. That starts in mid-August and runs through mid-October.
Just as shipping delays start to normalize following the issues in China, consumer demand will likely make them increase. Experts are now wondering when we will start to get back to the schedules we enjoyed prior to March 2020.
Cyclone Shipping: Your Source for Shipping Information
At Cyclone Shipping, we are always paying attention to what’s going on in the world of container shipping. Whether that means shipping delays, cost increases, or the effects of war and the pandemic, we stay up-to-date and share that information with you. Why do you need a freight forwarder on your team? That’s why. You can stop worrying about whether your products will get from point A to point B and focus, instead, on your business operations. Leave the shipping management to us.
Contact us to learn more.