Relief for shippers as Ningbo’s Meishan Island Terminal is set to reopen
Shippers moving cargo via the Meishan Island Container Terminal at Ningbo-Zhoushan Port will be relieved to hear it may partially reopen within days. Original reports suggested a date of 6 September would be the earliest for the resumption of operations, but no new cases of Covid-19 have been detected so the reopening may occur as soon as the 28th August. Agents anticipate it will take 10 days to two weeks to clear the boxship backlog with the whole port back to normal operations by the middle of next month.
The partial closure of the world’s third-busiest container port is also worsening congestion at other major Chinese ports, as ships have been diverting away from Ningbo amid uncertainty over how long virus control measures in the city would last. In nearby Shanghai and in Hong Kong, congestion is once again increasing after dropping due to the reopening of Yantian port in Shenzhen, which shut in May for a separate outbreak. The number of container ships anchored off Xiamen on China’s southeast coast rose to 24 from 6 at the start of the month, according to shipping data compiled by Bloomberg.
The world’s biggest shipping lines including AP Moller-Maersk A/S and CMA CGM SA are skipping Ningbo port after the closure. The companies prefer to divert shipments to other ports rather than wait outside Ningbo for an unknown length of time while the Covid-19 outbreak continues. Some other ships are willing to wait, with 141 ships at a shared anchorage for the Shanghai and Ningbo ports Tuesday, 60 more than the median number from April to August. “We hear the backlog is getting bigger and the congestion is getting worse,” said Dawn Tiura, CEO of logistics industry association Sourcing Industry Group. “The disruption across ports is absolutely related. If you are buying goods that originate or move through China, you need to increase lead times or find another source of supply.”
The shipping industry has been plagued by disruptions this year that have created delays in global shipping chains and driven freight rates to record highs. Grievances have ranged from a mega-ship stuck in the Suez Canal in March to virus outbreaks in Southeast Asia and China reducing productivity at ports, all of which ultimately help to drive the ever increasing delays cost of shipping.
Carriers Implement 40 HIGH CUBE Surcharges from Europe
In an attempt to limit the amount of 40 foot High Cube container bookings from Europe, carriers have introduced a High Cube Surcharge for sailings departing from the 1st of September of USD 500.00 per 40 High Cube container. This follows a shortage of high cube equipment in Europe, as well as a build-up of 40HC empties in Australia and New Zealand due to the slow export vs. import trade. The surcharge will be applied to all North and South Europe bookings to Oceania until further notice.
California congestion nears new high, East Coast gridlock worsens
It’s only mid-August — the early days of peak shipping season, but the record for container ships anchored off California is already on the verge of being broken. Port congestion is simultaneously building along the East Coast, with anchorage numbers off Georgia well into the double digits and, for the first time this year, a growing queue offshore of the Port of New York and New Jersey. California congestion previously peaked in the first quarter. On Feb. 1, the Marine Exchange of Southern California reported an all-time-high 40 container ships at anchor in San Pedro Bay, awaiting berths in Los Angeles or Long Beach.
The highest number of container ships in the entire port complex, including those at anchor and at berth, 67, was set on Jan. 28. On Friday, there were 125 ships of all types (including tankers and cruise ships) either at berth or anchor in Los Angeles/Long Beach. That’s a new record. The Q1 high was 113. Labor availability, yard turn times and productivity are still being affected by summer vacations as well as weather issues within the last week including temperatures of 95-100 degrees and COVID cases which continue to soar among port workers.
Shippers are encouraged to communicate new orders as early as possible and extend lead times to avoid lengthy delays out of the US.