Lead times from China's Qingdao port have drastically increased © Tcly via Getty Images
Lead times from China's Qingdao port have drastically increased © Tcly via Getty Images

Huge backlogs at Chinese ports spell shortages for Europe and US

posted by Marino Donati and Juliette Rowsell
13 October 2021

Massive backlogs at critical Chinese ports are exacerbating the supply problems at European and US ports, according to research.

Data from Project44 showed there were 386 ships anchored and moored off Shanghai and Ningbo ports last week with an additional 45 container vessels waiting to moor, which will create shortages and raise costs for US and European businesses ahead of the holiday season.

The UK’s biggest container port at Felixstowe has been forced to turn away ships from Asia due to a backlog of containers caused by the country’s shortage of HGV drivers.

The world’s largest shipping container company Maersk said it stopped sending ships to the port – which is responsible for almost 40% of the UK’s freight container traffic – due to bottlenecks. 

The port has a backlog of up to 50,000 empty containers out of a total capacity of around 145,000, according to estimates.

David Jinks, head of consumer research at parcel delivery service ParcelHero, said: “There are significant shipping delays across the world, caused largely by new outbreaks of Covid at ports in China.

“Not only are all the manufactured goods they contain not being shipped, but the containers are then needed to ship other goods elsewhere. Without the containers, goods can’t be shipped. It’s a chicken and egg situation.

“However, the UK’s particular labour shortage problems, created by Brexit, have severely exacerbated the problem here.”

Conservative Party chairman Oliver Dowden, responding to reports of potential Christmas shortages, told BBC Radio 4: “I do completely appreciate the concerns that people have looked at those headlines, I want to reassure them that the government is working to address that.”

According to Project44, a combination of backlogs from the Covid closure of Ningbo port, the impact of Typhoon Chanthu, and the Golden Week holiday in the first week of October have created a worsening situation at China’s ports, which account for 40% of total global container trade. 

Shanghai is currently the world’s busiest container port, with Ningbo the third busiest.

Container lead times for shipments from China to the US West Coast have increased significantly this year compared to 2020 and 2019, with lead times from Shanghai and Qingdao increasing by nine days (36.39%) and 10 days (32.79%) to the main ports in America’s West Coast. 

Container rollover rates – the percentage of containers that miss their scheduled sailings – have stayed high, indicating Chinese ports are not making significant headway in dealing with excess cargo, Project44 concluded.

Delays caused by rollovers are affecting production and delivery patterns at destination ports, with raw materials for manufacturing or retail goods for consumers not reaching customers in time, and increased freight rates.

Josh Brazil, vice president of supply chain insights at Project44, said: “As it becomes increasingly hard to get inventory from factory floors to end-consumers, competition for shipping capacity will heat up. The only way to survive in a market like this is by being proactive with granular visibility into your shipments.”

He added: “The challenge is less about achieving full inventory, that ship has sailed, and more about adapting to, and planning for, future disruption.”

The US government has announced a series of measures to combat bottlenecks at ports, including 24-hour operations at the ports of Los Angeles and Long Beach, which are the point of entry of 40% of containers to the US.

The White House said major companies had agreed to extend operating hours, in particular night working and other off-peak times, including Walmart, UPS, Fedex, Samsung, Home Depot and Target.

“Unlike leading ports around the world, US ports have failed to realise the full possibility offered by operation on nights and weekends,” a statement said. “Moving goods during off-peak hours can help move goods out of ports faster.

“For example, at the Port of LA, goods move 25% faster at night than during the day. These commitments will help unlock capacity in the rest of the system, including highways, railroads and warehouses, by reducing congestion during the day.”

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