Shipping containers in port at night

Container Congestion in Vietnam & China

Container terminals continue to see congestion due to COVID -19. A lockdown in Vietnam has led to a buildup of at least 100,000 teu at Cat Lai port in Ho Chi Minh City and in China newly enacted COVID restrictions are increasing congestion at ports in Ningbo and Shanghai, the world’s two largest ports.

In Vietnam’s Cat Lai port, despite 2.000 containers being cleared over recent days, about 105,000 teu remain taking up space needed for containers that continue to arrive at the port. Only about 15% of the space is available for incoming containers.

During the lockdown factories reduced production to as much as half from normal levels. Due to the reduced productivity, containers aren’t being picked up and the terminal is running out of space for new containers.

When it comes to Cat Lai port, there are nearby alternatives such as Cai Mep, which is operating without issue. However, these alternative ports are further away from the city than Cat Lai port. The increased distance raises questions about who is responsible for additional charges for services such as trucking

Conditions at these ports and many others are exacerbated due to equipment shortages that emerged during the pandemic and continue today.

Even more distressing, according to a Maersk report, some factories are planning to reopen over the coming week, which would only worsen the availability of containers.

In the same report, Maersk commented on the deteriorating conditions in China due to the Delta Variant. Conditions that are causing delays for the next 2-3 months.

The conditions due to COVID are further complicated by weather and strong demand from the US.

Last month the two ports of Shanghai and Ningbo were hit by a typhoon, which slowed productivity and has since been followed by enhanced COVID restrictions.

Some of the new restrictions at many ports, for example, requires vessels to quarantine for 14-28 days if they’ve visited India or performed a crew change within 2 weeks of arriving in China.

There’s concern that another nationwide lockdown in China could be on the horizon as daily COVID cases increase. Such a lockdown would primarily impact personnel through increased testing and other restrictions.

As the global pandemic persists, we expect international shipping to face continued fluctuations.

Comments are closed.