How shutting down the world’s third-busiest port will affect global trade

COVID jitters hit the world’s third busiest container port located in China after a worker test positive on Wednesday. 

Soon after discovering that a 34-year-old worker, had caught the COVID-19 virus despite being fully vaccinated with two doses of the Sinovac vaccine, Chinese port authorities indefinitely shut the terminal area and the bonded warehouse, along with suspending operations at the terminal. However, the rest of the port remained functional, and the traffic meant for Meishan is now being redirected to other terminals.

The partial shutdown at the Meishan terminal at Ningbo-Zhoushan port, which accounts for over a fourth of the container cargo handled at the Chinese port is also likely to threaten the global supply chains that are already in a fragile state. 

Although the port has been quick on its feet to redirect the traffic, experts are anxious and are expecting a backlog of consignments with average wait time taking the upwards graph. 

As reported by Reuters, a backlog of 40 container ships were anchored off the coast of Ningbo as of Thursday, a day after the shutdown. 

Many shipping operators are also looking to redirect their ships to Shanghai, which is about 130 miles north of Ningbo, however, Shanghai is already congested, as it still is underway of processing the backlog caused by the typhoon In-fa in late July.

The time taken to move the ships through the port is likely to double or triple, and have a substantial and long-term impact on both the exports and imports. 

Furthermore, experts expect the container capacity to get more expensive, and the cost is likely to be pushed by the shippers onto consumers, heating global inflation. 

At a time when the world shipping system is already struggling with containers shortages, the shutting down of the third-largest container port in the world makes this tense situation, worse. 

Ports around the world are in fear after the shutdown at Ningbo-Zhoushan. They are worried that similar outbreaks may take place at docks and strain the world’s shipping system which is already struggling to handle unprecedented demand as economies reopen and manufacturing picking up.

The Meishan terminal primarily services trade destinations in North America and Europe.

Last year, the terminal handled 5,440,400 TEUs of containers.

During the first half of 2021, the Ningbo-Zhoushan Port handled the most cargo among all Chinese ports, at 623 million tonnes, which included exports of electronic goods, textiles, and low- and high-end manufactured goods. The top imports included crude oil, electronics, raw chemicals, and agricultural products.

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