June might be a little early to start sorting through your Christmas present list, but you may want to get those orders in soon. This is because a COVID outbreak in southern China has caused a huge backlog of uncleared shipping containers which could take months to handle and could well spill over into the holiday season.
It all started when the port city of Guangzhou recorded a surge in COVID cases earlier this month. The Chinese government ended up locking down parts of Guangzhou for over a week and imposing strict travel restrictions on the city's residents.
Per a CNN report, this lockdown caused a significant delay in shipments — particularly in Yantian, a major port 50 miles away from Hong Kong. Before the lockdown, the Yantian port handled around 36,000 20-foot containers daily, but a COVID outbreak among its dock workers led to the entire shipyard's operations being shut down, wrote CNN.
Now Yantian's port workers are scrambling to clear the backlog that is clogging up its waterways, per a report by local finance news outlet Eastmoney. But the congestion caused by this one-week delay had a domino effect on Guangdong's shipping business, causing overloads at other container ports in Shenzhen and Guangzhou, too.
"The Yantian backlog is adding extra disruption on an already stressed out global supply chain, including the significant seaborne leg of it," Peter Sand, chief shipping analyst for shipowner association Bimco, told CNN. He added that people "may not find all they were looking for on the shelves when shopping for Christmas presents later in the year."
Vincent Clerc, head of Maersk's ocean and logistics business, told Seatrade Maritime News that he expected the Yantian shipping delays to last up to 16 days, which could be a "bigger disruption" than the Ever Given getting stuck in the Suez Canal.
News of this shipping delay in China and its knock-on effects comes while the global shipping industry is facing an unprecedented crisis.
Insider's Rachel Premack reported on June 11 on how prices of consumer goods skyrocketed in the US after the pandemic turned the supply chain topsy-turvy. Ports in Long Beach and Los Angeles are facing sea-traffic jams due to ramped-up shipping volumes, with vessels sitting idle for weeks while short-staffed port workers struggle to process an overload of containers.
The shipping delays along the supply chain and how expensive it is becoming to ship items via sea routes are leading to price hikes for goods across the board, wrote Insider's Grace Dean last week. There have been product shortages in the US since May for everything from semiconductors and medicine, to Fourth of July fireworks and Starbucks menu items like green iced tea and hazelnut syrup.
