Key China Port Terminal Shuts Down

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Tariff Relief May Be On Way

A key terminal at one of the largest shipping ports in the world–and a leading port for consumer electronics goods– has been shut down due to COVID.  The closure at the port, located in China, is expected to cause delays in shipments to the US, leading to possible higher prices.

Just as suppliers are facing headwinds getting their goods across the ocean during the busy pre-holiday season, a section of the Ningbo-Zhoushan Port–the number 3 port in the world for container shipments–has been shut down indefinitely due to the finding of a single COVID case in a port worker.

The shutdown affects the Meishan Terminal of the port, responsible for a fifth of all traffic at the port.

China has a zero tolerance policy toward COVID and is conducting massive testing so that other port disruptions may be expected, said Barron’s.

“This is just the latest example of the unpredictable bumps that lie ahead. It will add to supply-chain disruptions such as the global microchip shortage, and Beijing’s proclaimed zero-tolerance on the virus could lead to other similar decisions,” said Barron’s.

According to industry members including blue salve partners, Ningbo is a leading port for consumer electronics vendors, as it is located in proximity to many CE factories.  Robert Heiblim of blue salve said that the closure could cause shipping rates to go up even higher.  He added, “Keep in mind that holiday shipments will start soon, so smaller folk will be pushed aside by those who can pay.”

Container traffic will be diverted to other areas of the Ningbo-Zhoushan Port, but delays are expected to reach 7-9 days, up from the current 1-3 days, according to reporting in China Macro Economy.

The Ningbo port handled the most cargo among all Chinese ports, close to 700 million tons, during the first half of the year.  The backlog from the closure of its Meishan Terminal “leaves factory owners with nowhere to put goods, and prices are rising,” reported China Macro Economy.

Port congestion was starting to rise even before this recent shutdown as COVID cases in China are on an upswing, and the country is shutting down parts of the supply chain in response, said China Macro Economy.

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