(Updated Aug. 18, 2021, 9:45 A.M. ET with more details on reopening schedule, impact on liner companies.)
Chinese authorities are expected to begin a phased reopening of a container terminal at the massive Port of Ningbo by the end of the week if no further COVID infections are detected. And the overall effects on ocean shipping so far have been less than originally feared, according to logistics and freight data providers monitoring the situation.
Last week’s closure of the Meishan Island Container Terminal after a worker tested positive for the virus put global supply chain managers on edge over a possible repeat of the month-long slowdown at the Yantian terminal in Shenzhen earlier this summer. That incident caused huge shipping delays and container backlogs that took weeks to reduce.
There were 41 vessels at anchor waiting for a berth Tuesday morning and the average number of weekly port calls to Ningbo fell 22% from nearly 188 container vessels to 146 last week, but the total nominal vessel capacity calling the port only dropped 7.8% to 572,052 twenty-foot equivalent units, project44, a supply chain visibility platform, said in a media bulletin.
The reason is that the other four terminals at the port absorbed the inbound and outbound container traffic redirected from Meishan, which handles about a quarter of the port’s volume. Also, ocean carriers did not blank as many sailings as they did following the Yantian lockdown.
Project44 said it recorded only 15 blank, or canceled, sailings to Ningbo on Tuesday, which is in line with the average number of voided sailings at the port to keep vessel routes on schedule.
Carriers are primarily diverting to other terminals rather than skipping the port entirely.
Members of the 2M and THE Alliance have low exposure to the Meishan terminal and remain relatively unaffected by the temporary closure. One of them, container shipping giant A.P. Moller-Maersk, has only one service – the AC6 serving South America in a vessel sharing arrangement with CMA CGM – that calls at Meishan. All vessels in the string will skip Ningbo this month. Vessels are waiting about two days for a parking spot at other terminals, it said.
The main users of the terminal are CMA CGM, Evergreen, COSCO Shipping Lines, OOCL – members of the Ocean Alliance – and regional feeder operators.
Cargo could begin flowing through the Meishan terminal earlier than the Sept. 6 reopening date officials initially hinted.. Health authorities have completed a second round of diagnostic tests for COVID-19 at the port, with no new cases reported. A third round of testing is underway and if there are no confirmed cases again, Ningbo could partially reopen as soon as Friday, Memphis, Tennessee-based freight forwarder Dunavant said in a customer notice.
Throughput will likely be increased in phases to whittle down the backlog of containers, with a full resumption of operations possible by the beginning of September. SEKO Logistics, Itasca, Illinois, said in a customer advisory that terminal staff entered the port Thursday to manage berthing and anchoring conditions, with resumption of container gate operations likely to occur on Aug. 25 and a full resumption of operations on or around Sept. 1.
Chinese authorities have been aggressive in trying to stamp out COVID outbreaks. Many ports are requiring nasal swab tests for entire crews, forcing vessels to remain outside the harbor until negative results are confirmed. And many ports are requiring vessels to quarantine for two to four weeks if they were previously berthed in India, where the delta variant surged during the summer. Quarantines also are required if any crew changes occurred within 14 days of arriving in China.
Airports are also operating under strict quarantine and other health measures, which is reducing labor availability and slowing the loading and unloading of cargo jets. Some airports were temporarily closed for several days to allow for disinfecting and testing.