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Yantian to focus on logjam as it resumes full operations

Southern Chinese port aims to get back to full capacity at its 20 container berths and ‘gradually normalise’ vessel berthing

While the news will bring some relief to the already stretched global supply chain, the ripple effect of the port logjam is likely to continue in the coming weeks, according to industry experts

YANTIAN Port, a major export hub in Southern China, is poised to resume operations after having been largely closed for more than a month.

The port logjam, triggered by coronavirus-hit dockworkers, has sent a shockwave around the already fragile global logistics system, with stranded shipments and surging freight costs.

While the resumption of operations will bring some relief to the stretched supply chain, the resulting ripple effect is likely to continue in the coming weeks, according to industry experts.

The Yantian International Container Terminals, the sole box handling facility at the port operated by Hutchinson Ports, will “fully restore its operation” on June 24, according to a port statement.

The gate-in truck quota will also be increased to 9,000, from the 8,000 currently allowed.

The decision was made after no coronavirus infections had been reported in the port area for 21 consecutive days, government officials said, adding that vessels berthing at the terminal would be “gradually normalised” to clear the backlog and increase handling efficiency.

So far, 11 of the 20 container berths at the terminal have come on stream, with daily throughput topping 270,000 teu.

The west part of Yantian Port, which accommodates mid-sized vessels of 3,000 to 6,000 teu and had been shut down since May due to an outbreak of the virus, has been reopened. 

Figures from Lloyd’s List Intelligence show 87 boxships comprising 441,337 teu in the anchorages nearby Hong Kong, as the disruption at Yantian spreads to the nearby hubs of Nansha and Shekou.

The number has fallen from its peak of 104 ships comprising 611,966 teu on June 14. Part of the reason for the decline is vessels now being instructed to omit the ports altogether.

 

 

In its latest port update this week, Maersk expected “continued vessel omissions and vessel delays at Yantian port upwards of 4 days in the coming week.”

The world’s largest liner shipping carrier said 19 of its services, mostly on Asia-Europe and transpacific trades, have been so far impacted by the Yantian crisis.

“The Port of Yantian is gradually increasing productivity as more workers return and more berths reopen,” the company said. “We welcome the diminishing queue, but schedule reliability remains compromised.”

The yard density was reduced to 60% as of June 21, according to Maersk.

Meanwhile, operation in the east area of the port, designed to mainly dock long-haul megaships, was recovering to about 54% of its normal level, although export container gate-ins remained under restrictions. 

The reopening of Yantian is also expected to take some heat off the nearby ports that have been overwhelmed by the shift of cargo flows.

Nansha’s yard density has reached 100%, according to Maersk.

“We expect continued vessel delays at Nansha port upwards of 4-5 days in the coming week,” it said.

Linerlytica analyst Hua Joo Tan said operations at those Southern Chinese ports were unlikely to return to normal until the middle of July, with the remainder of the backlog needing to be cleared.

There is also little chance that freight rates, which have shot through the roof, fuelled by the port crisis, will ease back down.

“Lines are pushing peak season surcharges in July and they are likely to succeed so I would expect rates to continue to rise,” he said. “However current rates are already very elevated so the average increases will likely be smaller.”

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