EnOperations at the port of Yantian in China were returned to full operations as of midnight local time on June 24 according to port owner Hutchison Ports. Authorities took “proactive measures” to tackle the COVID-19 outbreak at the port which had disrupted operations since at least the last week of May as first noted in Panjiva’s research of May 28.
Working through the backlog of vessels is likely to take weeks with schedule disruptions rolling into the peak shipping season. The impact of lost exports will also only become fully clear through July given there is a two week transit time from Yantian to LA on direct routes.
As one challenge passes another may be opening for exporters from China however. Port authorities at Shanghai International Port Group have reportedly suspended landside handling of hazardous goods with limited exceptions through July 2 according to Loadstar. That follows a refrigerated-container fire on June 17 at facilities co-owned with Hutchison Ports.
Hazardous cargo fires aboard container ships have come into focus in the past three years, most visibly recently with the sinking of the Xpress Pearl which is set to generate a $40 million insurance claim, Maritime Executive reports. Some container lines, including Ocean Network Express, have already restricted the shipping of products containing lithium ion batteries as part of the response.
Panjiva’s data shows that Shanghai accounted for 41.6% of U.S. seaborne imports of containerized freight that contains hazardous material from China in the 12 months to May 31. Growth in shipments of the products, which range from chemicals and fireworks to knives and batteries, has also been significant with shipments having climbed by 62.2% year over year in the 12 months to May 31 and by 43.6% compared to the same period of 2019.
Source: Panjiva
Major importers to the U.S. of those products from Shanghai may face additional administrative burdens and possibly also shipping delays. While batteries only account for 8.2% of shipments labelled as hazardous in the past 12 months (TEU basis) that does not cover all battery shipments. Should the designation be required for all lithium ion battery shipments out of Shanghai, as well as key products using them such as power tools, car parts and laptop computers, there could be significant disruption to supply chains.
The boom in demand for consumer discretionary products has led to a rapid expansion in shipments of such products from Shanghai with growth of 107% year over year in the three months to May 31 and 82.3% compared to the same period of 2019.
The leading shippers include tool manufacturers Stanley Black & Decker and Makita with shipments linked to the firms having increased by 39.3% and 90.0% year over year respectively while shipments linked to Robert Bosch increased by a more modest 6.9%. Battery specialists including Panasonic have also seen a rapid rate of expansion as demand for electric vehicle batteries accelerates, with shipments having increased by 35.9% year over year and by 309% compared to 2019.
Source: Panjiva
