How The Port Closure in China Is Impacting Australia

The Australian trade market has seen some serious disruptions after China partially shut down one of the world’s largest and busiest ports on 11th August 2021. Due to the outbreak of the recent delta variant, China has taken stringent measures to stop the spread, leading to eventual port closures and limited air cargo flights.

The Shutdown of Ningbo-Zhoushan Port

China partially shut down the eastern Ningbo-Zhoushan port nearly two weeks before when one of its workers from the Meishan terminal tested positive for covid-19. This is the second recent shutdown following Yantian port in Shenzhen earlier in late May due to Covid-19.

The Ningbo-Zhoushan port is the world’s third busiest port, with its closed Meishan terminal accounting for about 25% of cargo containers through the port. According to a statement from the port, all inbound and outbound container services were halted, calling it a “system disruption”.

An Increased Congestion

The partial closure of Ningbo-Zhoushan port saw some of the other major container ports, including Xiamen, Hong Kong and Shanghai, face a massive amount of congestion as ships divert from Ningbo. The congestion further raised with the reopening of the Yantian port, which was shut down for three weeks from May 21 to June 10 for another outbreak.

The Key Impacts on Australian Trade

China’s zero-Covid strategy to curb the new delta variant has added more pressure to the already soaring supply chain and freight shipping costs in Australia. “The Chinese approach is clearly to do whatever it takes to prevent a spread of covid-19 domestically, and hence the shutdown in Ningbo is due to just a single positive case in a port worker,” said Lars Jensen, the chief executive of consultancy, Vespucci maritime.

The port is actively taking part in negotiations with logistics and shipping companies to divert the congestion to other terminals, has tremendously increased the delay and disruptions in the Australian supply chain management. This, especially, was impeding the Australian retailers and companies that import steel, resulting in sky-high prices and delay in the supply of key materials used for housing and other infrastructure development projects.

While the container shortage itself was a problem since the pandemic taking a toll on Australian imports and exports on one end, the port closure is affecting the trade lane in a whole new dimension. Besides, the Chinese government’s strict quarantine restrictions and the recent political tension between Australia and China makes it worse for Australian merchants to make any progress.

“The downstream impact is being felt hard locally, with shipping lines daily advising our industry of port omissions across Australia’s container terminal,” said Paul Zalai, the director of the Freight and Trade Alliance (FTA), Australia’s leading representative body for the international supply chain sector. And according to the Australian Bureau of Statistics, the structural timber rates soared up to 6.6% during the June quarter, which is 11.7%, much higher than last year. At this rate, the local retailers fear having a stock shortage and increased retail prices as they near the festive season.

How We Can Help You

While all these can hamper the Australian economy, our C2C Logistics team have managed to ease the stress of the current disruption with careful planning and assessment. As a leading and trusted logistics company based in Illawarra and Wollongong in NSW, we use our 30 years of experience in providing only the best service to our clients, no matter how hard the situation is. At C2C Logistics, we take your priorities with utmost consideration and transparency. We can assist you with the best freight prices, ensure safety to your freight and keep you informed from process to process for a hassle-free logistics operation.

If you are looking for reliable air freight and sea freight services during these unfavourable times, our team is more than happy to help you.