What’s Up Dock? Air Rates are! It’s a Ningbo No go !

Look at the 2 workers on this crane repair platform. We chose this picture because of the word (Bromma) located just above the 2 workers on the crane repair deck. The word BROMMA is very close to the word “broma” in Spanish. It means “tease or joke”. Unfortunately, this situation is NO BROMA. Read on…

Okay – Here we GO or NO GO again.  The third-largest container port in the world located at the port of Ningbo, China closed down a terminal on August 11, 2021.  A dockworker tested positive for COVID

We’re not alarmists, but how else do we say this ? Here’s what we see coming soon, so

  • GET READY for AIR RATE HIKE$ LIKE YOU’VE NEVER $EEN
  • Air Capacity $hortages and Long Waits for Air Cargo
  • Delay$ – Like no one wants

Ningbo is a major port in East China in Zhejiang province just south of Shanghai.  It’s strategically located midway on the East Coast between Hong Kong to the south and Beijing to the North.  Actually, it’s quite famous as it’s also the location of the 1516 landmark one of the oldest libraries in the country in Tian Yi Square.

Authorities in China suspended vessel and gate operations due to the COVID outbreak. That immediately stops 20% of its capacity at the port.  – At least to start….we’ll see… Look back and see what happened earlier this year in this article. Looks like history is repeating itself !

Ningo is an important cog in the wheel of supply chain.  It is the number three container port in the world after Shanghai and Singapore.  Let’s look at the magnanimity of the port’s capabilities and how it affects supply chain, LTL trucking and life in general.

Ningbo handled more freight in the first seven months of this year than any other port in China according to the Ministry of transportation.  It handled nearly 19 million 20 foot equivalent units (TEU).  Assuming each ship carries 10,000 TEU’s then we’re looking at 1,900 ships. That’s about 270 ships per month equating to 9 or more per day. We are talking about a lot of logistics, offloading and planning. But what happens if a worker gets infected with COVID. Well, China is mucho mucho or much much more restrictive in its approach to these outbreaks in comparison to other nations. As a result, many factories have to close or reduce production.

Experts are thinking that if the COVID outbreak spreads in Ningbo, then the impact could be worse than what happened in May and June this year when the Yantian container terminal in Shenzhen, China partially shut down.  Capacity actually reduced by 70% ! This caused enormous delays, as we all know too well.

Hapag-Lloyd, a German vessel operator also posted to its website that they expect delays in planned sailings that might affect your cargo. Other major companies such as Mediterranean Shipping Company (MSC) and carrier CMA CGM stated that some vessels will be rerouted to Shanghai or even skip Ningbo altogether resulting in vessels departing later.  You guessed it – more delays.  Arrival times are now even farther away.

Arrival times are now looking into mid September and early October.  Unfortunately, shipping rates are more than 10 times the normal rate on certain routes compared to pre-pandemic times.  The demand is incredible.  We are getting calls to ship by AIR because our clients cannot wait for the ocean vessels. But even AIR SPACE is getting scarce. More than the OCEAN wait, it is the uncertainty. Remember the Suez incident in March – it took 3 months to clear the vessel and release it after some $erious fine$.

So, how does it affect importers?  Well, now that Ningbo’s port is most likely being bypassed it’s going to put the strain on the other ports which are already trying to recover from backlogged shipments.  Factories feel the pinch too, as they need to ship their goods out to avoid clogging their manufacturing docks. Remember the article Ship Happens? How about the Memphis-Arkansas bridge closure affecting the trucking routes and the LTL industry?

A similar issue happened when vessels bypassed the Yantian port and headed to other ports in South China. It created huge congestion in those alternate port locations. The result – a backlog of shipments that took almost 2 weeks to clear. Unfortunately, factories are still recovering and trying to clear their docks.  This situation upsets delivery schedules for a retailers.  It trickles down to LTL Trucking and so on…

Whether it’s COVID or just backlogged orders due to the increase in e-commerce buying, companies doing shipping must plan way ahead.  It’s so important to have expert help with your International freight needs.  DGL Logistics LLC understands the global situation.  Call them for a free consult.

Be prepared, especially as we enter the peak shipping season !  Contact one of the International specialists at DGL Logistics.  They’ll help you navigate those troubled waters as well as manage the PUC. (Pain, Uncertainty & Chaos)

Above all stay well rested!  Stay healthy and reduce your stress so you can deal with the PUC – life is too short. It’s not worth it to lose your soul over shipping delays when there’s help nearby! Enjoy the weekend coming as we approach September and the change of seasons.

By David Lorusso

CEO /DGL Logistics, LLC

[email protected]

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