Post Date : June 12, 2021
Fresh coronavirus cases-led disruptions that have resulted in massive delays from congestion at southern Chinese ports are throttling global supply chains, leading to inflated costs and further disruptions.
The delays have already triggered soaring shipping prices within China due to a scarcity of containers and increased export demand.
There are mounting fears that these high shipping costs may just be the tip of the iceberg, where supply chain experts fear a looming threat to global inflation.
Surge in freight rates
Freight rates continueto be on a rise for additional factors, with the virus outbreak at Shenzhen’s Yantian already triggering inflated spot freight rates globally.
Simon Heaney, senior manager of container research at Drewry Shipping Consultants Ltd. fears that rates will climb higher as they head into the third-quarter peak season.
“Both importers and exporters will suffer if delays and waiting times extend”, he said.
Global shippers in a quandary
Global shippers who have been already dealing with many supply chain disruptions since the past year, including the recent Ever Given grounding, now find themselves in another predicament with these incoming disruptions.
Even Trans-shipment dwell times in Singapore are at about eight to nine days now, up from roughly five days a year ago, according to estimates from project44.
In Singapore, the delays at China’s Yantian port have led to major disruptions in vessel schedules and carrier service levels. Delays in China have consequently led to cargo vessels skipping their scheduled port stops, with one of CMA CGM’s vessels heading to China in July likely to skip the Southeast Asia trans-shipment hub.