Ningbo-Zhousan may not exactly be a household name, but find something in your house made in China and it’s quite likely it was delivered from there. Ningbo-Zhousan, which overlooks the East China Sea some 200km south of Shanghai, is China’s second-busiest port, handling the equivalent of some 29 million 20ft containers every year.
At the time of writing, it has more than 50 ships waiting to dock. This is because the Ningbo-Meishan terminal, which handles about one-fifth of the port’s total volumes, has been closed for a week after a member of staff tested positive for Covid. With still no word of a reopening, many more ships have diverted to alternative ports.
Unfortunately, this is the tip of the iceberg in shipping. China has eight of the top 10 busiest ports in world and it is running at well below normal capacity because of COVID restrictions. From Shanghai to Hong Kong to Xiamen, ships are in long queues to unload – and the diversions from Ningbo will be making this worse. The US west coast is also seeing bad congestion, with many ships anchored in California’s San Pedro Bay, awaiting access to the ports of Los Angeles and Long Beach.
This has driven the cost of shipping rates for containers through the roof in recent weeks. The cost of moving a 40ft container from China to Europe is currently running at around US$14,000 (£12,000), about 10 times what it would normally be. So how long will this continue and what will be the knock-on effects?
The pandemic and other problems
This situation is noticeably different to 2020. Covid restrictions had weakened the cargo-handling capacity of ports then as well, but it was less of an issue because global demand for consumer products was so much lower earlier in the pandemic. Now that many countries have vaccinated large numbers of people and their economies are reopening, demand has bounced back with a vengeance and ports are not coping well.