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Covid restrictions in South China – new disaster for container shipping

Covid restrictions in South China – new disaster for container shipping

Because of a new outbreak of coronavirus infection in China’s Guangdong province at the end of May, local authorities decided to re-enact COVID-19 related lockdown and partially close the Yantian terminal in Shenzhen. Shenzhen Port is the third largest container terminal in the world. These restrictions caused huge congestion of vessels on hold, both inside and outside the port. By mid-June the situation had gotten worse and led to the jams in neighboring Yantian terminals in Shekou and Nansha in Guangzhou. It also affected Hong Kong and other ports that shippers selected as an alternative. As a result, “traffic jams” of ships go on and the delays are now up to 15-16 days. Carriers also face a lack of labor and available equipment – due to a shortage of 40-foot containers; they are forced to use 20-foot ones. If we compare the situation with the Suez Canal blocking in March of 2021, we may see that the port restrictions have already caused the delay of more ships. Besides, the current situation also goes on for the whole month already compared to a week in Egypt. Experts are expecting the situation with jams and delays in ports to last until at least till the end of summer, or maybe even until the fall. In this regard, they all agree that in the near future the increase of the cost of sea transportation is to be expected, since the demand is increasing, and there is still a shortage of equipment and space. Shipping lines are doing their best to resolve the problem of port congestion, but so far, this has not led to any noticeable improvement, and the situation remains tense.

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