Shipping congestion is growing at world's biggest port

[SHANGHAI] Ships looking to avoid Covid-induced delays in China are making a beeline for Shanghai, causing growing congestion at the world's biggest container port. Shipping firms are making the switch to avoid delays at nearby Ningbo, which suspended some trucking services near that port after an outbreak of Covid-19, according to freight forwarders and experts. Ships are also re-routing to Xiamen in the south, Bloomberg shipping data showed.

Those diversions are adding to the new wave of congestion facing China's ports as an increasing number of cities deal with virus outbreaks. The strict testing of workers and truckers ahead of the Chinese New Year holiday at the end of this month is further stressing already strained supply chains as the pandemic heads into its third year.

In the country's technology hub of Shenzhen in the south, testing of residents and truckers to contain an outbreak means a queue of ships has formed at the port. That has caused the Shekou terminal to start restricting the acceptance of goods, meaning that from Friday (Jan 14) full containers can only be trucked in 3 days before vessels are due to arrive, the terminal operator said on Tuesday.

Meanwhile, the northern Chinese city of Tianjin ordered workers to take a half-day break for Covid testing as officials try to contain the spread of the Omicron variant.

Trucking capacity is estimated to be half of normal levels, and drivers are required to be tested daily before entering the port, said Alex Hersham, CEO of digital freight-forwarder Zencargo.

That outbreak has now spread to the port city of Dalian, with 2 people who travelled there from Tianjin confirmed to have Omicron.

The influx of ships into Shanghai has delayed sailing schedules for container ships there by about a week, said freight forwarders. Those delays may then ripple outward to already backlogged gateways in US and Europe, they added.

Ships could start skipping Chinese ports soon due to a lack of options, according to Zencargo's Hersham.

"The port congestion issue will continue to impact restocking cycles this quarter, alongside the Omicron breakout and the impending Chinese New Year closures in China," said Josh Brazil, vice-president of supply chain insights at logistics intelligence firm project44.

BLOOMBERG