The congestion woes at ports in Southern China continue to worsen — with more than 100 sailings at Yantian and other nearby ports now being dropped or diverted by major container lines to avoid piling port congestion in the region due to tighter Covid-19 measures.

In a June 9 customer advisory, Ocean Network Express (ONE) said the situation has worsened due to tighter controls at the port amid a Covid-19 outbreak.

“The container logistics situation continues to deteriorate around all the ports in the area,” ONE said. 

The shipping line added that while the worst congestion was seen at the Yantian International Container Terminal (YICT), nearby Shekou Container Terminal (SCT) and Chiwan Container Terminal (CCT) are also operating a yard capacity of well over 90%.

ONE said in its advisory that 25 more sailings were impacted on top of an earlier list of 27 sailings published it published on June 5. Apart from ONE, another liner OOCL disclosed that 26 of its sailings dropped calls at Shekou and Yantian.

Maersk: 16 days of delays expected

Maersk told its customers on June 8 that it forecast delays of up to 15 days for operations moving through the YICT as the delays ripples and continue to grow. It earlier advised 14 days.

But on a June 10 advisory, the shipping line said delays of up to 16 days could now be expected. 

"The situation continues to deteriorate as more positive Covid cases have been confirmed in Shenzhen where Yantian port and Shekou port are located and in Guangzhou where Nansha port is located," Maersk said.

"Due to further measures being implemented, increased congestion and vessel delays upwards of 16 days are expected in Yantian port," it added.

Maersk said yard density at YICT "remains elevated" with disinfection and quarantine measures being continuously implemented by local authorities to prevent the spread of Covid-19.

It continued saying that operation in the eastern area of the terminal where mother vessels mainly berth continues to experience low productivity which is about 30% of its normal level.

"Due to aforementioned disruptions, we regret to inform you that 64 vessels including our partners’ vessels have omitted the Port of Yantian and Shekou in order to protect schedule reliability," Maersk said.

It said import-laden containers on the omitted vessels are also expected to delay for "over three weeks."

Chinese officials implemented the first containment efforts and restrictions at the port of Yantian starting on May 25 — already slowing vessel movements at the port.

Reports also initially indicated that the mini outbreak was mostly contained to areas near Yantian only, but later on, the spread has also begun to impact the neighboring port of Shekou, both in the Shenzhen province, resulting in further port congestion and delays. 

Port officials are saying that they plan to keep quarantine restrictions and implement disinfection measures at least next week.

project44: More blank sailings expected

Analysts project44 said on June 9 that the minimum dwell times at YICT as a port of loading was one day, while median dwell times were at most 18 days, and minimum dwell times at YICT as the port of discharge was also a day, median dwell times were far higher at 18 days.

"Port congestion in the South China Sea surrounding Yantian has been severe. As of June 7, 47 vessels are approaching the port with upcoming ETAs of which 22 vessels with ETAs already in the past," the analyst said.

"With roughly 32% of all vessels approaching Yantian delayed already, the congestion is expected to exacerbate over the next few weeks," it added.

"The obstruction will mean additional blank sailings in June from Yantian to Hong Kong to the US West Coast," it added, noting that container capacity may reduce by roughly 50% from the port, and there could be restrictions on the carriers allowed to release premium shipping containers.

For Asia-Europe trade lanes, it added that shipping lines have already announced blank sails from northern ports like Tianjin and Quindao, citing congestion issues.

The congestion at YICT and other South China terminals and advisories from ONE, Maersk and OOCL, puts the number of impacted sailings to at least 121 — that are either omitting calls or rerouted vessels to other ports.

"The recent rise in Covid-19 cases in China has resulted in a shutdown that may add to the already record cost of shipping goods out of China. The delays have already resulted in pressurizing soaring shipping prices within China due to a lack of containers and increased export demand," Josh Brazil, vice president of marketing at project44 said.

Separately, ONE has announced the implementation of a US$1,000 per reefer container surcharge for Yantian.

"This may result in an extended period of storage of inbound reefers at transshipment port or the discharge of reefer containers at an alternative port without prior notice,"  ONE said.

"ONE has decided to apply a congestion surcharge (CGD) of US$1,000 per container to cover additional costs related to the unexpected but necessary arrangement of shipments and associated plug-in charges, monitoring fees etc," it added.

2-5 weeks shipping disruption

The surcharge is effective for all reefer cargo arriving into Yantian from June 10, and from July 11 for regulated trades.

Danish consultancy Vespucci Maritime noted that disruptions at South China ports "will cause ripples of potential congestion at the destination with a lag time of some 2-5 weeks" according to its CEO, Lars Jensen.

He noted that since the Yantian shutdown has now been ongoing for 14 days, it means that "the port has been unable to handle some 357,000 TEU."

The availability of containers is also worsening in South China ports as fewer boxes arrive at the ports.

According to reports, Yantian saw a 19% drop in incoming containers between Week 17 and last week (Week 22) as Nansha recorded a 16.4% drop in incoming containers over the same period. At Shekou, a 29.6% drop was recorded.