The coronavirus outbreak and partial shutdown of the crucial port Greater China Yantian in recent days has prompted container carriers to reroute ships to other ports. Tuesday, Maersk reported that 40 ships were affected, while Hapag-Lloyd has reported 16 affected ships.
At DSV Panalpina, Executive Vice President for Air & Sea Henrik Nielsen ranks the current situation in China to be at least comparable to the Suez Canal blockage in March, which put a halt to large parts of the world trade for nearly a week.
“If possible, it presents as big a challenge as Suez, if not bigger. This is happening constantly, and it continues,” Nielsen tells WPO.
Today, we spend about ten times longer on an expedition than we did 12-15 months ago.
Henrik Nielsen, Managing Director of Air & Sea, DSV Panalpina
Tuesday, analyst and CEO of Vespucci Maritime Lars Jensen said that the port in Yantian has been unable to handle 357,000 teu in the period.
“Putting this in context, when Suez was blocked by Ever Given it impacted a daily flow of 55,000 teu, but Suez ‘only’ lasted 6 days. In Yantian, we are at 14 days now and counting,” Jensen wrote in a post on LinkedIn.
DSV estimates that it will currently take between two and three weeks for a container to leave the port of Yantian.
The rerouting of ships and cargo to other ports also presents logistical challenges.
“Today, we spend around ten times longer on an expedition than we did 12-15 months ago, as things have to be moved around constantly. It presents a massive challenge.”
At another major logistics company, DHL Global Forwarding, customers are currently encouraged to, whenever possible, redirect freight to other ports.
“We are in close contact with our partners and shipowners to keep up to date on developments and also encourage our customers to redirect shipments to ports in Shekou, Chiwan, Nansha or Hong Kong until the situation eases,” writes Dominique von Orelli, global head of ocean freight, in a comment to WPO.
Alternate solutions at play
DSV Panalpina has already applied alternative methods to send freight through the supply chains, Nielsen explains, including rerouting via train or air, for instance by transporting a container via train to Europe and from there to the US via sea.
“We have to find alternative solutions for more than 10 percent of our volume each day. Before, we could see at least three weeks or more into the future. Today, things are changing from day to day, or hour to hour,” he says.
We have to find alternative solutions for around 10 percent of our volume each day.
Henrik Nielsen, Managing Director of Air & Sea, DSV Panalpina
DSV Air & Sea started to look for further alternative solutions after the blockage of the Suez Canal, he explains.
“Since then, we’ve had to think outside the box. It’s a major challenge for customers, freight forwarders and carriers.”
Alternative solutions are not manifold when it comes to moving the 20,000 teu large container ships have the capacity for, he adds. It requires dialog with customers, also to determine and prioritize which cargo is most pertinent.
“It’s important to stay in dialog with customers and to advise about existing options. What’s possible today might not be possible tomorrow,” Nielsen says.
Sources confirm to WPO on Wednesday afternoon CET that Yantian’s Western Terminal will be reopened on Thursday, June 10. Still, it will take weeks to catch up and ease the bottleneck of container ships that has been built up at the key port.
English Edit: L. N. Barnes
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