According to Verus Global, an international freight forwarding company, the world’s busiest shipping ports in China are yet to reopen following Chinese New Year celebrations and the ongoing Russia-Ukraine conflict.
As a result of these issues, Australians can expect further shipping delays potentially lasting for months as well as increased postage and insurance costs.
“Chinese New Year would typically see only some Chinese ports temporarily shut down over the course of the two-week celebration, but this year we couple that with ensuing global disruptions in the freight and shipping industry worldwide, which have added to stress implications already seen within the supply chain,” Jackson Meyer, Verus Global CEO says.
Chinese ports reported they were operating at a lower capacity than usual due to container and staff shortages, notes Verus Global. This is a phenomenon that’s shaking the international logistics industry.
“Typically, factories shut down for one or two weeks for the celebration followed by mass demand from businesses that need to cater for those delayed products in the weeks following, but due to tremendous pressure already on the system, we saw a majority of Chinese ports shut weeks before the spring festival even began,” Jackson says.
Chinese New Year 2022 was the most significant in more than 60 years, with more than 2 billion people celebrating the spring festival’s year of the water tiger amid COVID-19 infections, pandemic restrictions, and global supply chain delays.
“You would also normally expect to see a level of supply-chain forecasting that could help prepare these ports in advance by preparing cargo loads to cope with the demands of the celebration, but with factories shut well beforehand and a shortage of shipping container delays, that was just not feasible this year,” Jackson adds.
“On top of this, we’re seeing incredibly low staffing levels internationally due to the coronavirus pandemic, with Hong Kong recently declaring mandatory testing for all 7.5 million of its citizens in March to cope with the latest Omicron outbreak.
“This has resulted in a delayed start for workers returning to the workforce or some workers not returning at all leading to immense delays on already strained production lines.”
China’s Ningbo shipping port is the third busiest in the world, notes Verus Global. It says Chinese authorities have reported more than 66 per cent of staff are predicting shipping ports will be affected by further delays caused by Chinese New Year following a two-week shutdown in early January due to the latest Omicron outbreak.
Verus Global also says shipping routes are now reporting an 85 per cent increase in transit times compared to 2019 and are predicted to last for the coming months.
With western countries imposing sanctions on Russia following its invasion of Ukraine, concerns have been raised about shipping congestion at Chinese ports and further impacts on the industry generally.
For more information on Verus Global, click here.
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