China's port shutdown raises fears of closures worldwide

The shutdown at the Ningbo-Zhoushan port is raising fears that ports around the world will soon face the same kind of outbreaks and Covid-19 restrictions last year as the pandemic took hold.
The shutdown at the Ningbo-Zhoushan port is raising fears that ports around the world will soon face the same kind of outbreaks and Covid-19 restrictions last year as the pandemic took hold.PHOTO: REUTERS

NEW YORK (BLOOMBERG) - A Covid-19 outbreak that has partially shut one of the world's busiest container ports is heightening concerns that the rapid spread of the Delta variant will lead to a repeat of last year's shipping nightmares.

The Port of Los Angeles, which saw its volumes dip because of a June Covid-19 outbreak at the Yantian port in China, is bracing for another potential decline because of the latest shutdown at the Ningbo-Zhoushan port in China, a spokesman said.

Mr Anton Posner, chief executive officer of supply chain management company Mercury Resources, said that many companies chartering ships are already adding Covid-19 contract clauses as insurance so that they will not have to pay for stranded ships.

It seemed as if things were just starting to calm down, but "we're now into Delta delays", Mr Emmanouil Xidias, partner at Ifchor North America LLC, said in a phone interview. "You're going to have a secondary hit."

The shutdown at Ningbo-Zhoushan is raising fears that ports around the world will soon face the same kind of outbreaks and Covid-19 restrictions that slowed the flows of everything from perishable food to electronics last year as the pandemic took hold.

Infections are threatening to spread at docks just as the world's shipping system is already struggling to handle unprecedented demand, with economies reopening and manufacturing picking up.

Ningbo-Zhoushan port said in a statement late on Thursday (Aug 12) that all other terminals aside from Meishan have been operating normally.

The port is actively negotiating with shipping companies, directing them to other terminals, and releasing information on a real-time data platform, it said. To minimise the impact, it is also adjusting the operating time of other terminals to make sure clients can clear their shipments.

A spokesman for the port said there were no further updates when contacted on Friday.

Ningbo city is still considered a low-risk virus area, according to the city's health commission, although flights to and from capital Beijing have been cancelled.

The Baltic Dry Index, which serves as a global benchmark for bulk shipping prices, has been up by more than 10 per cent since a month ago as the Delta variant began to spread rapidly.

While there have not been significant effects on American ports, the problems in China could hurt companies that rely on container exports from the nation.