South China Port Congestion Worsens As Traffic Jam Of Container Ships Builds

By Tyler Durden

We have previewed for months that port congestion in southern China could be a more severe problem than the shutdown of the Suez Canal in March. Port congestion at Yantian International Container Terminal, a deepwater port in Shenzhen, Guangdong, is operating at 40% capacity and is seeing vessel delays of more than 16 days, significantly impacting exports to the US. 

Just outside of Yantian is the Outer Pearl River Delta (OPRD) Area, where the number of container vessels is waiting to access ports on the mainland has hit multi-year highs.

At the end of June, 75 container ships were moored in OPRD, surpassing levels from early February of around 35 and about 50 in February 2020. These vessels are waiting for berths to open up at ports.

The congestion has surpassed March’s Suez Canal blockage in terms of container disruption with median wait times around 18 days, according to data from project44.

“From port handling in Yantian alone, the sheer number of containers (not vessels) impacted now exceed the number of containers impacted in Suez,” Lars Jensen, CEO of advisory Vespucci Maritime, said in a post on LinkedIn.

Jensen warned:

Add to this ripples such as problems in recent weeks getting new empty containers into South China. Then you will have a pile of cargo in backlog coming out of Yantian once everything re-opens given rise to a surge on the destination side with some timelag. You will have a pile of reefer cargo already on vessels inbound for Yantian but which is now being discharged in other ports increasing the risk that other ports will run out of reefer plugs (as we also saw in early 2020).

Meanwhile, international container shipping rates have hit never before seen levels amid a historic global scramble to secure goods and inventory…

Congestion and soaring shipping costs are more bad news for Walmart, Target,, and top retailers who are now placing holiday orders for Chinese-made merchandise weeks earlier this year, as a global shipping backlog threatens to leave many gift buyers empty-handed this Christmas shopping season.

The latest shipping data out of China suggest port congestion continues to worsen as supply chain woes are expected through the second half of this year.

Source: ZeroHedge

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