News / Super Typhoon Ragasa wreaks havoc with supply chains in East Asia

Photo: Joint Typhoon Warning Center

Shippers waiting for cargo out of southern China could face a significant wait, as typhoon-related delays merge into the Golden Week holiday. 

Factories in the global manufacturing hub would normally expect to close on 30 September for China’s 1-7 October holiday. However, those in the vicinity of Super Typhoon Ragasa are shuttered already, and may not reopen until the end of this week, giving a very small window to get goods out before the vacation.

Nearly 2m people have been evacuated from the Guangdong region, home to some 4% of the world’s manufacturing capacity. 

It’s not just China, Hong Kong and Taiwan affected: the typhoon has now weakened to a severe tropical storm, but is set to hit northern Vietnam tomorrow, with cargo handling delays expected at Hai Phong port and ships likely to re-route to the south.

Thousands of flights have been cancelled in the region, including by Cathay Cargo, Emirates and Qatar, leading to cargo delays. According to Rotate, widebody capacity out of Hong Kong in the past 24 hours versus a week ago out is down more than 13,000 tonnes.

If you add airports in southern China and Taiwan, the capacity drop is some 20,000 tonnes. Rotate said some 30,000 tonnes of cargo could be held up in the next 36 hours.  

The impact of the typhoon, which has, tragically, claimed the lives of at least 17 people across the Philippines and Taiwan, could be felt for some time. The backlog of cargo waiting to be moved could take days to clear, and drive heightened demand for air cargo, possibly triggering a rate rise. 

In the week to 22 September, airfreight rates fell on ex-Asia lanes, said TAC Index, “with shippers continuing to shift supply chains given higher tariffs and the end of the de minimis exemption for small parcels entering the US – but rising on many lanes out of Europe and North America”. 

Rates out of Hong Kong eased by 0.6% week on week, and dropped slightly out of Vietnam, to both US and Europe.  

With only a month to go before Thanksgiving in the US – and its related consumer shopping spree – forwarder claims that front-loading has reduced the need for shipping could be something of a blessing.