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Container xChange warns of ‘ripple effect of disruptions one after the other’

Partial port lockdowns in China expected to further strain global supply chain

Those working in supply chain are concerned about potential disruptions caused by partial port shutdowns in China, including Ningbo. (Photo: Shutterstock)

Despite the fast turnaround of containers, the latest partial port lockdowns in China as a result of the country’s zero-COVID policies have supply chain operators voicing concern.

“As the omicron variant brings more disruption, with Chinese New Year around the corner and some ports including Ningbo already facing lockdowns, we are expecting a volatile start to the year for ocean freight logistics,” said Johannes Schlingmeier, co-founder and CEO of Container xChange, an online marketplace for buying, selling or leasing containers. 

“This means exports eventually have slowed down compared to imports at the Ningbo port over the past 11 days of the new year. The global supply chain will be further strained because of these lockdowns in China and the result would be a further gap in global demand and supply,” Schlingmeier said.

China drastically cut its container dwell times at its ports from 61 days in 2020 to just five in 2021.

The depot dwell time results were featured in the second annual Container xChange/Fraunhofer-CML “C-Timing” study. It was supported by the German Federal Ministry of Education and Research.

Topping the list of poor port performance was Europe and the United States.

“The global consumer demand has not dropped drastically with the beginning of the new year,” Schlingmeier said. “The congestion in LA, LB and other Western ports is yet to show signs of relief. This could potentially create a ripple effect of disruptions one after the other in the next few months.

“Once containers reach Asia, they are being redeployed at record speeds,” added Schlingmeier. “However, [there is a] mismatch between supply and demand at many origin ports, including in China. [This] means it is hard for U.S. and European importers to always secure boxes unless they have planned ahead or are working closely with their box supplier, forwarder or container line to ensure they have both a vessel slot and a container available in advance.”

Christian Roeloffs, co-founder and co-CEO of Container xChange, added, “We foresee that COVID-19 and its new variants will continue to disrupt the port operations and labor capacity as we progress into the year 2022. Persistent unpredictability is warranted.”

Lori Ann LaRocco

Lori Ann LaRocco is senior editor of guests for CNBC business news. She coordinates high profile interviews and special multi-million dollar on-location productions for all shows on the network. Her specialty is in politics, working with titans of industry. LaRocco is the author of: “Trade War: Containers Don’t Lie, Navigating the Bluster” (Marine Money Inc., 2019) “Dynasties of the Sea: The Untold Stories of the Postwar Shipping Pioneers” (Marine Money Inc., 2018), “Opportunity Knocking” (Agate Publishing, 2014), “Dynasties of the Sea: The Ships and Entrepreneurs Who Ushered in the Era of Free Trade” (Marine Money, 2012), and “Thriving in the New Economy: Lessons from Today’s Top Business Minds” (Wiley, 2010).