Following our most recent advisory outlining disruption and restrictions at locations across China, please see below an update on the most important factors affecting Asia supply chain.
With COVID-19 outbreaks spreading across China, further restrictions are being imposed in many regions with a visible knock-on effect to port operations and production. Increased congestion and equipment and labour shortages are the result, with a significant rise in blank sailings adding pressure in the run up to the Chinese New Year.
Shipping lines will be carrying out blank sailings throughout January and February 2022 in order to avoid problem areas as schedule reliability continues to slip.
Tianjin: Tight restrictions still in place, with tiered lockdowns forcing some to remain at home. Marine terminals are operating as normal although import container pickup operations have been suspended across both the port and airport. Some cancellations of bookings as restrictions are tightened are expected.
Shenzhen: A combination of overseas port congestion and increased COVID regulations/restrictions are causing severe congestion within the Yantian Port terminal. The congestion is creating long queues at the Yantian port entrance, forcing the terminal to announce that it will only accept container delivery within 4 days of estimated time of berthing, as of 21st February. This is causing a decrease in schedule reliability for shipments originating at the port, with containers piling up and putting strain on storage due to delayed shipping. This also has the potential to add extra costs with off-terminal storage being sought ahead of the containers being received.
With Chinese New Year holidays fast approaching a shortage of drivers continues to mount whilst feeder ports in the Pearl River Delta are winding down ahead of CNY celebrations. By the end of week 3 there will be very limited opportunity to truck/feed containers into Shenzhen prior to Chinese New Year creating a further backlog.
The coming weeks are a critical and busy time for exports out of China ahead of the Lunar New Year public holiday, with the opening of the Winter Olympics potentially sparking tighter restrictions.
We will keep you updated as the situation develops.
If you have any questions on your Asia supply chain, please contact us here.
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