Typhoon In-Fa approaching Shenzhen.
Typhoon In-Fa approaching Shenzhen.

Containers cost over $20,000 due to demand, lockdowns and storm season

11 August 2021

 

Asia’s typhoon season is threatening to bring fresh misery to already embattled global supply chains as tropical storms force port operations to halt in Chinese industrial hub Shenzhen.
The city’s Yantian port was forced to suspend drop-off services of containers last week due to a typhoon alert.
Two weeks ago, Shanghai’s Yangshan terminal facility and nearby ports evacuated ships as Typhoon In-Fa brought high winds and widespread flooding.
International airports in Shanghai cancelled all flights, and authorities banned outdoor activities as the storm lashed the city.
The China Meteorological Administration (CMA) has predicted there is worse to come, forecasting a further 16 to 18 typhoons in the Northwest Pacific and South China Sea during the typhoon season, Bloomberg reported.
Meanwhile, rising US retail orders ahead of peak shopping season have propelled container shipping rates from China to the US to fresh highs – taking them to above $20,000 per 40ft box.
This is more than 500% higher than for the same period last year.
Covid restrictions in China and Vietnam are adding further to supply chain pressure. A lockdown in South Vietnam has led to congestion at Ho Chi Minh City’s Cat Lai port while restrictions are also slowing traffic at Chinese ports in Shanghai and Ningbo.
Philip Damas, managing director at maritime consultancy Drewry, told Reuters he expected the high rates to last at least until Chinese New Year in February 2022.
Shipping companies have ordered new vessels to deal with high demand, but the number of cargo ships in use is not expected to increase substantially until 2023. 
Damas said high demand, Covid restrictions and storms had “turned global container shipping into a highly disrupted, under-supplied seller’s market, in which shipping companies can charge four to ten times the normal price to move cargoes".
"We have not seen this in shipping for more than 30 years," he added.
In June a Covid-19 outbreak in southern China caused shipping delays in Yantian and Guangzhou ports as the authorities moved to shut down businesses to halt the spread of the virus.

Asia’s typhoon season is threatening to bring fresh misery to already embattled global supply chains as tropical storms force port operations to halt in Chinese industrial hub Shenzhen

The city’s Yantian port was forced to suspend drop-off services of containers last week due to a typhoon alert.

Two weeks ago, Shanghai’s Yangshan terminal facility and nearby ports evacuated ships as Typhoon In-Fa brought high winds and widespread flooding.

International airports in Shanghai cancelled all flights, and authorities banned outdoor activities as the storm lashed the city.

The China Meteorological Administration (CMA) has predicted there is worse to come, forecasting a further 16 to 18 typhoons in the Northwest Pacific and South China Sea during the typhoon season, Bloomberg reported.

Meanwhile, rising US retail orders ahead of peak shopping season have propelled container shipping rates from China to the US to fresh highs – taking them to above $20,000 per 40ft box.

This is more than 500% higher than for the same period last year.

Covid restrictions in China and Vietnam are adding further to supply chain pressure.

A lockdown in South Vietnam has led to congestion at Ho Chi Minh City’s Cat Lai port while restrictions are also slowing traffic at Chinese ports in Shanghai and Ningbo.

Philip Damas, managing director at maritime consultancy Drewry, told Reuters he expected the high rates to last at least until Chinese New Year in February 2022.

Shipping companies have ordered new vessels to deal with high demand, but the number of cargo ships in use is not expected to increase substantially until 2023. 

Damas said high demand, Covid restrictions and storms had “turned global container shipping into a highly disrupted, under-supplied seller’s market, in which shipping companies can charge four to 10 times the normal price to move cargoes".

"We have not seen this in shipping for more than 30 years," he added.

In June a Covid-19 outbreak in southern China caused shipping delays in Yantian and Guangzhou ports as the authorities moved to shut down businesses to halt the spread of the virus.

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