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News June 24, 2021

Port Backlog in China Could Take Weeks to Clear

That could exacerbate issues like inventory shortfalls and rising product prices in the promo industry.

By  Christopher Ruvo

A major port in China is reportedly resuming normal operations following a COVID-19 outbreak that had crippled the bustling hub. But a backlog of shipping containers could still take weeks to clear, spelling more supply chain disruption for western importers, including those in the promotional products industry.

Yantian International Container Terminal, a deep-water port in Shenzhen, Guangdong, China, through which about a quarter of that country’s exports flow, was ramping back up to normal operational capacity on Thursday, June 24.

A cargo ship at Yantian Port.

A cargo ship at Yantian Port.

Operations at Yantian were running at only 20% capacity recently after new cases of coronavirus began spreading among dock workers in late May, according to shipping analysts.

The disruption has already lasted weeks. For instance, the west port area, which is now reopening, was fully closed for a three-week period from May 21 to June 10, Seatrade Maritime News reported. COVID’s gumming up of the works at Yantian has caused delays and congestion at ports across the Pearl River Delta, The Loadstar reported.

“Delays for berthing at Yantian continue to be reported as 16 days or longer, and congestion is growing at the nearby ports of Shekou, Hong Kong and Nansha, which Maersk reported as being two to four days on 21 June,” Seatrade Maritime News reported. “Even with Yantian resuming full operations, congestion and impact on container shipping schedules will take weeks to clear.”

Some analysts think the disruption tied to COVID flare-ups in China could be even more profound. Brian Glick, founder and CEO of supply chain tracking platform Chain.io., told Sourcing Journal that the outbreaks have the potential to stall brands’ shipments for months to come, potentially cutting into the spring 2022 selling season.

“What I’m hearing from customers is that they’re trying to book space [on ships] now two and three months out,” Glick told Sourcing Journal. Normally, such bookings occur days or weeks in advance. The congestion is going to overflow into the peak season, which occurs from mid-August through the end of October, said Glick, adding that it’s already intensifying.

The upshot is that shipping containers could become even harder to procure, space on ships more difficult to get, and delivery of products made in China could take even longer to reach North America.

That spells continued problems for the promo industry, which has been experiencing inventory shortfalls due to the importing challenges that have arisen from the shipping issues, which are largely beyond the control of promo suppliers. The wildly skyrocketing costs for containers and cargo transports have also been a key factor driving up prices on promotional products in North America. With more importing and inventory issues expected, it would be wise for promo distributors to plan for the busy Q4 holiday gifting season now, ASI Media has reported.