US goods risk being late as China's lockdowns worsen shipping port jams

[NEW YORK] Congestion in the key Chinese ports of Shenzhen and Hong Kong due to Covid-19 lockdowns has risen to the highest level in 5 months, posing possible delays to goods heading to the US this summer.

There were approximately 174 vessels anchored or loading off the South China hubs, the largest number since Oct 21, when the region dealt with the aftermath of Typhoon Kompasu. A queue of ships is also growing at Shanghai.

"Shenzhen is the second-busiest port next to Shanghai, so we will expect to see significant volume shift to the other ports within China," said Ryan Closser, a director at FourKites, a supply-chain information provider.

"A couple more weeks of shutdown may not have a huge disruption, but the longer the area is shut down, the more of a ripple effect it will have."

The delays come as China has imposed the strictest Covid-19 controls since the initial outbreak 2 years ago.

Technology hub Shenzhen is lifting a week-long lockdown after ordering factories to shutter and truckers to participate in mass testing for the virus. Infections in Shanghai are still on the rise, spurring concern that measures to combat the virus could affect the transport of goods to the world's biggest port.

Congestion and longer waiting times have been observed at Shenzhen's Yantian and Shekou container terminals as of Tuesday (Mar 22), shipping carrier CMA CGM said in an advisory to customers. The lockdowns have come at an inopportune time for consumers in the US, which is seeing container-ship congestion ease in Los Angeles and Long Beach on the West Coast.

Trans-Pacific delays have largely shifted to Asia, with China seeing 14 per cent more vessels than a median count from April 2021. Ships in the US are 6.2 per cent less than the median. BLOOMBERG