Challenges for shippers, pre and post Chinese New Year

Shanghai and Yantian port disruption, refusal of heavy weight containers onto quay and the serious issue of drivers returning home ahead of CNY, due to Government enforced covid related travel restrictions are bad enough, and now the signs are the shipping lines will do everything possible to maintain elevated rate levels post-CNY.

In normal years, this would normally be the time when carriers offer incentives to protect volumes during the subsequent slack weeks after CNY and beyond, however there is no evidence that any special offers are being made this year. In fact carriers seem to be getting more bullish with pricing, from some of the current contract negotiations that are due for renewal in the market.

The carriers are maxed out with booking requests, due to high continued demand and are earning more revenue than at any time in the last decade. It is unlikely they will do anything in the short term that may jeopardise this record profit-making opportunity.

In the run up to Chinese New Year container operations at Shanghai have been adversely affected by drivers returning home, ahead of the Chinese New Year Holidays, which start tomorrow and congestion in the roads around Yantian have impacted operations at the port.

Like all Chinese ports, Yantian is traditionally busy in the peak season before the Chinese New year with strong exports increasing trailer delivery numbers, and the extremely busy terminal operations working to load vessels for on-time departure. 

In order to ensure smooth traffic outside the port, reduce the impact on surrounding residents and alleviate the congestion of municipal roads, Yantian Terminal suspended the reception of heavy container services for seven days from 00:00 on Tuesday the 9th February. 

In an effort to clear congestion in the roads outside the port and in the terminal itself, Yantian has increased the time a container must be on the terminal (gate-on) prior to departure from two to seven days, effective from this Tuesday.

In practice this means that if your container is booked on a vessel departing from Yantian on the 18th February, you would have to gate-in by today at the latest, i.e. 7 days before departure

The challenge is with the lack of equipment availability continuing to be an issue, many carriers are releasing containers as they come in from positioning moves, which means that if ships are delayed, equipment may only become available within the seven day window.

The result is that if the earliest you can retrieve a container is around the shipping-line four day cut-off, you are already outside the Yantian seven day gate-in and have no option to make the departing vessel.  

Thankfully the measure will only operate over three days from the 9th to 12th February.

On 9th February, stop accepting containers for departures on16th February

On 10th February, stop accepting containers for departures on 17th February

On 11th February, stop accepting containers for departures on 18th February

Pearl River Delta factories, particularly in the electronics sector, have opted to continue production through CNY in an effort to clear order backlogs, but our local Chinese office are hopeful there should be no significant impact, because most factories will already be on holiday. 

We continue to work tirelessly in Asia, Europe and The UK to ensure that disruption is avoided and that we manage container flows and expectations through expert planning and our close relationships with partner carriers.

More than ever supply chains need to be resilient to withstand today’s challenges, which is why our award winning MVT digital platform is invaluable, in adding value, visibility and flexibility to protect our customers’ supply chains. 

Please continue through the next two week ‘lull’ to review your forecasts and requirements for container shipping from the China and Asian origins from which you are shipping. We can already see that after the European lockdowns lift, there will be a huge spike in demand, especially we suspect, in relation to the UK after 3/4 months of retail closures. 

Please continue to supply weekly reports, so we will have visibility and can manage your freight and expectations, as we have proven over the last 12 months.

For further advice and information on current market developments and intelligence relating to westbound container or air freight movements please contact Grant Liddell, Emma Hulbert or your usual Metro colleagues for more information.

恭喜发财 / 恭喜發財 Gōngxǐ fācái

Photos show queues outside Yantian port and surrounding roads