The news that Ningbo Meidong Container Terminal had suspended operations on Wednesday over a single Covid case raises wider fears for the supply chain as the Delta variant outbreak in China continues to spread.
Tackling its largest Covid outbreak since the onset of the pandemic in early 2020 China continues to operate a zero-Covid strategy of travel restrictions, locking down cities, and testing entire populations, when cases spring up.
In the case of Ningbo Zhoushan Reuters reported that a single employee of the Meidong terminal had tested positive for Covid-19. The employee who was fully vaccinated with the Sinovac vaccine was believed to be asymptomatic. It is not yet known if the infection is the Delta variant strain which Sinovac appears to have limited in efficacy against.
“Meidong firm immediately stopped all operations and shut down the port area after the Covid-19 test of the staff showed positive,” said Jiang Yipeng, deputy general manager of Ningbo Zhoushan Port. The terminal is currently locked down with no movement of vehicles in or out and operations shutdown. All close contacts have been placed under observation, no more cases were reported till now.
The immediate impact of the closure is expected to be on the members of the Ocean Alliance – Cosco, CMA CGM and Evergreen – primarily using the terminal.
While container line Hapag-Lloyd told its customers: “With this sudden suspension, we expect a delay in planned sailings that might affect your cargo planning. Please know that we are working on alternatives, and hope for your understanding on a matter that is beyond our control.”
The terminal handles around 25% of the volumes at the world’s fourth largest container port Ningbo Zhoushan which has a throughput of 18.68m teu in the first seven months of 2021.
In terms of Ningbo – Zhoushan two key concerns will be how long will the closure last and more cases being found at other terminals resulting a wider scale shutdown of facilities at the key port. An outbreak earlier this year at Yantian International Container Terminal (YICT) resulted in a three-week shutdown and major disruption to container shipping with ripple effects felt across trades globally.
But it also raises much wider fears for the supply chain if the current outbreak continues to spread with China having already put restrictions in place in a growing number of locations including Zhengzhou, Nanjing, Beijing, Wuhan, Yantai and Shanghai.
Further disruptions at ports would come at a critical time for container shipping and the supply chain as the sector moves into it peak season. Already as reported, delays between China and Europe and North America have been growing to 7.5 – 8.5 days on average on key China – Europe port pairs. Meanwhile the US West Coast ports of Los Angeles and Long Beach have seen congestion rising again with over 30 ships waiting at anchor to berth.
Should more major Chinese terminals stop operations due Covid outbreaks it could lead to the worst disruption the sector has seen since the start of the pandemic.