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COVID Outbreak in Yantian Port Poses Serious Obstacles to International Trade

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A new COVID outbreak in Yantian Port, southern China’s largest port in the city of Shenzhen, has brought cargo traffic to a near standstill, further affecting already strained global supply chains.

Yantian ships up to 13.3 million containers of goods a year around the world and is responsible for one-third of Guangdong province’s international trade and up to one-quarter of trade from China to the United States.

COVID Outbreak in Yantian - El American
The Yantian port is the largest in South China with the capacity to hold over 160,000 containers. (EFE)

How large is the COVID outbreak in Yantian port?

While the blockade of the Suez Canal delayed the movement of goods equivalent to 55,000 20-cubic-foot cargo units (TEUs), the COVID outbreak in Yantian port has delayed the clearance of up to 357,000 TEUs, and the problem remains unresolved.

At the port, some ships have had to wait up to two weeks to pick up cargo and some 160,000 containers are waiting to be transported. Congestion is such that the cost of shipping a container from Shenzhen to the West Coast has soared by 63%.

The port of China ships 50% more cargo than the port of Los Angeles (the largest port in the United States). Although the volume of containers received by the port of Yantian grew by 45% this year, the port is operating at 30% of its capacity.

More than 30 ships waiting to be loaded with cargo at Yantian port. (EFE)

Delays in the movement of goods are lasting for weeks. While in normal times a container could stay at most 8 days at Yantian port, they can now accumulate up to 18 to 21 days without being loaded on a vessel.

As COVID-19 affects the port’s operation, the congestion of waiting vessels at Yantian also accumulates. According to information provided by Marine Traffic, as of this writing, 33 vessels are waiting to be loaded at the port and another 26 are due to arrive soon. According to international trade expert Sara Hutchinson, “under normal circumstances there are about five (vessels)” waiting at the port.

Hutchinson recommends that distributors add an extra two weeks of waiting time for the shipment of goods and prepare for a price escalation in the cost of shipping goods.

The problem at Yantian port doesn’t seem to be going away anytime soon

If that wasn’t enough, Yantian port is not the only one being affected by the outbreak, the neighboring port of Shekou has also started to see contagions among its operators, which also anticipates delays and more congestion at this other major port in China and Guandong province.

According to Lars Mikael Jensen, head of Danish shipping company A.P. Moller-MaerskA/S, the COVID outbreaks at the Shenzen ports will strongly affect the supply not only of raw materials but of consumer goods for Americans who can normally shop at stores such as Walmart and Home Depot.

Because the problem is a biological emergency, there is no clear end to the decongestion the Yantian and Shekou ports are suffering, as Chinese authorities will keep everything closed until they manage to contain the new COVID-19 outbreak, adding more stress and uncertainty to international trade.

Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica

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