Case increment in China Caused Container Crisis

The growing number of COVID-19 cases in China, which is the epicenter of the pandemic, has affected 600,000 containers compared to the Suez Canal crisis, creating a new crisis in the sector. While the region’s woes have pushed up freight prices, experts say the pandemic must be contained for the sector to recover.

Since March 2020, problems have not ended in the container sector, which has been struggling with the restrictions imposed by the pandemic, supply shortages and the ever green ship clogging up the Suez Canal. The increase in the number of COVID-19 cases in China’s port regions has caused problems in port services and supplies, increasing freight costs in China, one of the world’s leading export giants. More than 600,000 containers have been affected, experts say. Authorities in the region have signaled a recovery, but control of the pandemic is essential for the sector to fully recover.

It was effective more than Suez crisis

The 150 Delta variants seen in Guangzhou, China, have caused major disruption to the city’s port operations, while new cases in Shenzhen have led to jumps in freight costs at the world’s third and fifth largest ports. More than 600,000 containers have been affected by the region’s shortages, Lars Jensen, the industry’s leading container shipping analyst, told Splash. This is almost double the number of containers affected during the six-day closure of the Suez Canal due to the Ever Given ship.

Freight Costs Rise Over 200 Percent

Freight prices on the Asia-U.S. West Coast route rose to $6,614 per container, a 206 percent year-on-year increase. On the Asia-U.S. East Coast, freight prices have risen 244 percent year-on-year to $9,889.Meanwhile, prices between Shanghai and Rotterdam rose 300 percent to $10,522, according to Dewry Shipping. Hong Kong-based Freightos predicts the outages are expected to exacerbate shortages of empty containers at ports, and that more flights will be cancelled and capacity at ports will fall in June and July, although demand continues to grow. While the sector currently adversely affected by the pandemic does not have enough capacity to deal with new problems, Freightos data now shows that sea shipments from China to the United States are 42 percent longer than in the same month last year, which will worsen before recovering.

Meanwhile, Maersk, the world’s largest shipping company, says the waiting time in the Yantian region exceeds a week or two and many carriers divert ships to other ports. Yantian International Container Terminal said in a statement that the current operational capacity at the port has reached 70 percent of normal levels, while calling for acceleration in vaccination activities for a full recovery.