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Shippers are facing a perfect storm as the logistics industry has entered an “an era of unprecedented disruption”, with ports crippled by acute congestion as the malaise faced by China’s Yantian spreads to others.
The delays to Chinese exports, which have escalated to 16 days or more for vessels not cancelling their Yantian call, threatens an impact significantly worse than March’s Suez Canal blockage.
According to Alex Hersham, CEO and co-founder of supply chain technology company Zencargo, the knock-on effect from Yantian, which has been operating at just 20% of normal productivity due to an outbreak of positive Covid-19 cases, will be acutely felt in the coming weeks by retailers and consumers.
“Container shortages and delays will severely impact companies’ ability to deliver to customers,” said Mr Hersham.
And he warned that industries “will face shortages of materials, and countries will struggle to stock up on PPE”, and also claimed “we are in an era of unprecedented supply chain disruption”.
Ocean carriers are scrambling to mitigate the impact, Maersk, for example, confirming the omission of Yantian on 11 of its services and ad-hoc cancellations on eight others.
The carrier said the Yantian port authority had successfully re-opened part of the port, moving productivity back to around 45% of normal, but this was far from sufficient.
It told customers: “While this has a positive impact on gate activity, which is soon expected to reach the same levels as before the incident, schedule reliability will continue to suffer with an average waiting time of 16 days and counting.”
As and when the pent-up export cargo does move, this huge wave of cargo hitting European and US ports will be extremely challenging for them and their already stretched landside operations.
In the US, ports struggle to cope with peaks more than their European counterparts, but the North Europe port of Hamburg has been under intense pressure in the past few weeks and today Hapag-Lloyd advised customers of a tightening of restrictions for export cargo deliveries at Antwerp.
An advisory from the carrier said terminal operator PSA Antwerp had been “forced” to implement a “seven-day cargo opening rule” for export containers to its terminals, meaning shippers would henceforth not be allowed to deliver containers to the quay more than seven days before the confirmed arrival date of the nominated vessel.
Speaking to The Loadstar today Mr Hersham said carriers could decide to omit the UK to mitigate the impact on their schedules.
“Congestion will rise significantly, meaning that ports, and especially those already suffering such as Felixstowe, will be heavily impacted,” he said. “The scale of the issue in South China is already bigger than Suez.
“Two accurate metrics to measure disruption by are days of delay and teu; in both cases, Yantian far surpasses what happened with the Ever Given.”