The global supply chain faces a new disaster: China's second largest port suddenly stops working

08/08/2021
Extreme weather events in China are becoming the latest challenge to the global supply chain. The rainy season brings with it major storms that can cause cargo to be stranded at some of the busiest container ports in the world.
The port of Yantian, located in the industrial and export hub Shenzhen, suspended container pick-up services on Tuesday night due to a storm warning, according to a notice posted on social media.

Just two weeks earlier, major facilities at the Yangshan Port in Shanghai and nearby ports had to evacuate ships when Typhoon In-Fa made landfall, causing widespread flooding and sending containers to a route. America was overthrown.

Heavy rains, high winds and floods this year have affected global trade, as the shipping industry is already too stressed to recover from the effects of the Covid-19 epidemic and geopolitical uncertainty. . Things could get even worse in the near term, with officials predicting more typhoons to make landfall in China this month.

Alex Hersham, CEO of cargo shipping company Zencargo, said: "Every time the port is forced to close, the containers continue to pile up. This situation makes the delay even more stressful. Moreover, when the time comes With more hurricanes forecast this time around, we anticipate further delays in shipping."

The supply chain has faced many unfortunate events in the past year. In May, due to some port staff being infected with Covid-19, Yantain had to partially close down, causing the cargo in the container to accumulate for a month. According to analysts and logistics intelligence firm project44, when the ships diverted from southern China, several factories in the nearby manufacturing hub of Guangdong province had to close because much inventory could not be exported. export.

“The impact from the Yantian port closure is unprecedented on the supply chain, as it serves one of the manufacturing facilities,” said Salmon Aidan Lee, head of polyester at consulting firm Wood Mackenzie. It's the biggest in the world. If there were a few other storms coming in and affecting production for a few days, this problem would only get worse."
The average waiting time for a container to be shipped at Yantian has been reduced to 5 days from June 25, and port operations are expected to resume on the evening of August 4 after the storm passes. . However, the situation is likely to get worse, should persistent weather delays occur in other Chinese ports.

Typhoon In-Fa affected factory operations in eastern China. Meanwhile, major ports along the Yangtze River, the country's busiest waterway, had to suspend operations last week. The Shanghai Transport Exchange (SSE) said heavy rains and flooding had affected the circulation of commodities such as oil and coal.

The disruption has sent the cost of shipping a 40-foot container from China to the US to a record high of more than $10,000, according to maritime consulting firm Drewry.

Ultimately, these fluctuations will drive inflation up, Lee said. He predicts that US consumers will pay 20% more for Christmas items, from toys to furniture.

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