Traffic Jam at World’s Fourth-Largest Port Disrupts Trade Flow

Shipping experts predict the global supply chain disruption caused by the recent closure of the Port of Yantian, in China, to last for months.
Jul. 13, 2021
Lisa Anderson

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The full reopen­ing of the major port in Yantian, China, on June 24 comes as cold com­fort for the global sup­ply chain, with some pre­dict­ing the after­ef­fects could last into next year.

New data released on July 5 by the Kiel Trade Indicator, which ana­lyzes the flow of trade among 75 coun­tries, reported: almost five per­cent of all con­tainer ship capac­i­ties” are at this time tied up by traf­fic jams” at Yantian. This was more than in the first wave [of the Covid-19 pan­demic],” it was fur­ther noted.

With an open port, you now need to deal with the full force of the nor­mal cargo flow, and then the back­log on top of it. In this respect, I expect full nor­mal­iza­tion to take a cou­ple of months.- Lars Jensen, CEO, Vespucci Maritime

The dis­rup­tion at Yantian International Container Terminal, the world’s fourth-largest con­tainer port, started with a par­tial clo­sure in late May. This came about when five work­ers in the port tested pos­i­tive for Covid-19 dur­ing an out­break in the province.

Due to the scope of the out­break in Guangdong province and its vul­ner­a­bil­ity as a major entry point for vis­i­tors and cargo, the port only fully re-opened a month later.

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With an open port, you now need to deal with the full force of the nor­mal cargo flow, and then the back­log on top of it,” said Lars Jensen, the CEO of the Danish-based ship­ping com­pany Vespucci Maritime. In this respect, I expect full nor­mal­iza­tion to take a cou­ple of months.”

There is also a capac­ity short­age on ves­sels out of Asia,” Jensen added. This means that tak­ing extra cargo to han­dle the back­log from Yantian will lead to a reduc­tion of avail­able capac­ity out of other ports in Asia — and hence the prob­lem will be felt across the mar­ket in the com­ing weeks. Realistically the impact could be felt well into 2022.”

Just two weeks into the port clo­sure, Jensen noted that the clo­sure dis­rupted more con­tain­ers than those affected by the Suez Canal block­age in late March.

At the time, Jensen explained dur­ing the first 14 days of the Yantian dis­rup­tion, the port was unable to han­dle 357,000 20-foot equiv­a­lent units (TEU).

On the other hand, the Suez Canal block­age would have dis­rupted 330,000 TEU if it had con­tin­ued for the same period. Moreover, the Yantian clo­sure lasted two weeks longer than the Suez Canal block­age.

When he released these fig­ures, Jensen said shar­ing these ball­park fig­ures demon­strate ship­pers should not dis­miss the extent of the expected rip­ple effects.

Weighing in on the mat­ter, senior man­ager of con­tainer research at London-based Drewry Shipping Consultants Simon Heany said the sit­u­a­tion at Yantian has exac­er­bated exist­ing global sup­ply chain dis­rup­tion, caus­ing more bot­tle­necks in neigh­bor­ing ports and ter­mi­nals.”

This has delayed the much-needed improve­ment in port pro­duc­tiv­ity required to han­dle the surge in con­tainer traf­fic seen from the sec­ond half of 2020,” he added.





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