Ningbo terminal shuts and what will happen if Covid hits more ports in China

The Ningbo Meidong Container Terminal was halted on Wednesday due to a Covid case that raised greater concerns for the supply chain as the Delta variant outbreak in China continued to spread wide.

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Port of Ningbo - Zhoushan, China

Responding to the largest Covid outbreak since the pandemic broke out in early 2020, China continues to implement a "zero-Covid" strategy of restricting travel, locking down cities and testing all population, when cases of infection appear.

In the case of Ningbo Zhoushan, Reuters reports that an employee of the Meidong harbor has tested positive for Covid-19. This employee, who has been fully vaccinated with Sinovac, is said to be asymptomatic. It is not yet known whether the infection is due to the Delta variant strain that Sinovac seems to have limited protective effect on.

"Meidong firm immediately stopped all operations and shut down the port area after the COVID-19 test of the staff showed positive," said Jiang Yipeng, deputy general manager of Ningbo Zhoushan port.

The immediate impact of the closure is expected to affect Ocean Alliance members - including shipping lines COSCO, CMA CGM and Evergreen - that primarily use the port.

While container carrier Hapag-Lloyd told its customers: “With this sudden suspension, we expect a delay in planned sailings that might affect your cargo planning. Please know that we are working on alternatives, and hope for your understanding on a matter that is beyond our control."

The terminal handles about 25% of cargo volume at the world's fourth-largest container port Ningbo Zhoushan, which has a cargo throughput of 18.68 million TEUs in the first seven months of 2021.

For the port of Ningbo - Zhoushan, the two main concerns will be how long the closure will last and the number of infections being detected in other ports leading to large-scale closures of facilities. than at this key port. An outbreak earlier this year at Yantian International Container Terminal (YICT) led to a three-week closure and major disruption to container shipping with ripple effects across the globe.

But it also raises bigger concerns for the supply chain if the current outbreak continues to spread with China already imposing restrictions on a growing number of locations including Zhengzhou, Nanjing, Beijing, Wuhan, Yantai and Shanghai.

Further disruption at ports will come at a critical time for container shipping and the supply chain as it enters peak season. As Seatrade Maritime News reported yesterday, delays between China and Europe and North America have increased to an average of 7.5 - 8.5 days for major ports from China to Europe. Meanwhile, US West Coast ports like Los Angeles and Long Beach have seen increased congestion again with more than 30 ships moored waiting to enter the port.

If many of China's major ports are shut down due to the coronavirus outbreak, it could lead to the worst disruption the region has seen since the start of the pandemic.

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