More supply chain havoc after outbreak near 'pivotal' Chinese port in Yantian

Wednesday, 2 June 2021

'Lumpy' supply chain - Ports of Auckland faces troubling times (Video from December 2020)

The near-shutdown of a “pivotal” Chinese port will have flow-on effects for New Zealand, the chief executive of the Customs Brokers and Freight Forwarders Federation (Cbaff) says.

Bloomberg reported the Yantian international container terminals stopped accepting containers last week after a Covid-19 outbreak in the surrounding area of Shenzhen, southern China. Since then, several people in the port area have reportedly tested positive for Covid-19.

Strict virus precautions have been put in place at Yantian, slowing the passage of cargo and leaving ships waiting at anchor.

A spokeswoman for shipping line Maersk said a triple star service connecting New Zealand to Hong Kong and other areas of mainland China would now omit Yantian and connect cargo to the port via other means.

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More shipping delays are coming thanks to disruption at the Yantian international container terminals.

Yantian is part of the Port of Shenzhen which stretches across 260km of coastline and is considered the world’s third-busiest port.

Maersk released a statement earlier this week saying productivity at Yantian port had plummeted to 30 per cent and the shipping line expected vessel delays of more than seven days.

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Cbaff chief executive Rosemarie Dawson said Yantian was a “pivotal port” for international trade because so much international freight product passed through there.

Exporters and importers should be aware that there would be delays from the disruption, Dawson said.

This could come not just from delays to containers leaving or destined for New Zealand, but also from the re-routing of ships to other ports.

Chris Wilkinson says the issues at Yantian will undoubtedly have flow-on effects for New Zealand.

Importers or exporters might also be forced to pay extra transportation charges to get containers to their correct destination.

The high level of “yard density” at Yantian was also of particular concern to Dawson.

Containers were being packed tighter and tighter, which added to the amount of time it might take to pull them back out again.

“Anything above 80 per cent [yard density] creates inefficiencies because they’re having to double-triple handle stuff, and they’re having to store containers in a manner which means access to each and every container is compromised.”

All of this would just add to the delays currently being experienced thanks to both the Covid-19 supply chain disruptions and the Suez Canal blockage in March.

First Retail group managing director Chris Wilkinson said the disruption would “without a doubt” have an impact on New Zealand, and noted we were still feeling the “long-tail” effects of earlier disruptions to shipping.

Not only were there delays getting retail products into New Zealand, but some of those disruptions had affected the supply of raw materials needed to manufacture the goods.

This meant manufacturers hadn’t been able to ramp up production to meet demand in some cases.

“Whilst people are wanting to buy stuff, in many cases these retailers haven’t actually got the stuff to sell.”