More COVID Lockdowns at Chinese, Vietnamese Ports Continue to Strain Supply Chains

The world's third-busiest port partially shut down last week in the latest pandemic-related supply chain disruption.

The Los Angeles Times reported that a terminal at the Ningbo-Zhoushan port was closed last Wednesday after a worker tested positive for COVID-19. This comes at a time where shippers are bracing for the start of peak shipping season. On the domestic shipping front, the USPS and UPS are already bracing for high volumes during the year-end period.

All inbound & outbound container services at Meishan terminal in Ningbo-Zhoushan port have been halted.

This is the world's third-busiest port and a sign that Covid's resurgence in Asia will likely add to supply chain headaches for the rest of the world.https://t.co/io4dfst8It

— Tracy Alloway (@tracyalloway) August 12, 2021

The Ningbo-Zhoushan Port in E China's Zhejiang saw its container throughput reach 20 million TEUs (Twenty-foot Equivalent Units) on Sunday, one month earlier than last year. pic.twitter.com/LGBRS9pRDJ

— National Business Daily (@NBDPress) August 16, 2021

Elsewhere in Asia, lockdowns in Vietnam have created a backlog of 100,000 twenty-foot equivalent unit shipping containers at the Ho Chi Minh City Cat Lai port, with yard density at a reported 85%, according to the Loadstar.

The lockdown in South #Vietnam has caused a 100,000 teu pile-up at Ho Chi Minh City’s Cat Lai port.—The Loadstarhttps://t.co/VYNlFRNZ6M

— Asia Customs & Trade (@Asia_Customs) August 10, 2021

The Ningbo-Zhoushan port is directing shipping companies to other terminals to try to alleviate the pressure.

“We are working on contingency plans in order to mitigate the likely impact on our vessel schedules and cargo operations,” Orient Overseas Container Line said in a statement to the LA Times.

Vietnam has been a popular sourcing and manufacturing alternative to China, especially for apparel. The country ranks fourth on the list of top garment manufacturers, with $38 billion in yearly apparel exports. Shutdowns and delays at Vietnamese ports could complicate an already difficult sourcing situation for apparel businesses.

Shipping costs, in general, are continuing to rise, with the Baltic Dry Index global shipping price benchmark up more than 10% since July. The LA Times reported that the cost to ship a container from Shanghai to Los Angeles is up more than 220% over the last year, reaching as high as $10,322 by the end of last week. Overall, the cost to ship a container has quadrupled in the last year.