Global shipping sector struggles due to container backlog in China
A shortage of shipping containers resulting from the control measures put in place in China to contain the spread of the novel coronavirus (2019-nCoV) is slowing global trade.
Container ships are waiting offshore for the chance to unload goods at Chinese ports, while the same ports are also stacked with empty containers waiting to be filled and returned to the seaborne market.
The build-up of empty containers in China is a direct result of the difficulties in domestic logistics, which developed after the authorities extended the Chinese New Year holiday to delay the return of the workforce in an attempt to slow the spread of 2019-nCoV.
One major container shipping line was now no longer letting its ships call at Chinese ports because the ships were unable to reload with goods, a logistics service provider based in Europe said.
But a source at a Chinese shipping company put it another and said that “ships come to call at China and are welcome, subject to quarantine.”
China is home to several of the world’s largest container ports, including Shanghai, Shenzhen and Ningbo-Zhoushan.
The number of containers sitting idle is now at its highest ever, according to a shipbroker based in London.
The source conceded that information was third-hand, but he said he was seeing the bulk market slowing down considerably because ship owners did not want their vessels to travel to China.
The majority of commodities priced by Fastmarkets are traded in bulk shipments, although some lower-volume minerals and metals, such as iodine and certain types of ferrous and non-ferrous scrap, tend to be containerized.
And the price of iodine so far remains unaffected by any issues caused by the 2019-nCoV outbreak, with Fastmarkets’ price assessment for iodine 99.5% min, spot, delivered Europe/US, cif Asia, unchanged from the previous two weeks at $35-39 per kg on February 27.
One iodine distributor reported that he was “really struggling to find container vessels” and was also seeing a shortage of containers.
Refrigerated containers, used for transporting fresh food products, as well as traditional 20-foot equivalent units (TEUs) were in short supply. This was confirmed by a source at a China-headquartered shipping company.
“There have been blank sailings, originally due to the Chinese New Year [holiday] but these have been further extended because of the virus. Now, [blank] sailings as a whole are increasing,” the source said.
A blank sailing is either a canceled voyage or when a ship does not call at a port it originally intended to visit.
The shipping company source said: “We might need another two-to-three weeks to get back to normal operating levels.”