Problems with containers from China in 2022 - why have they risen in price?

Another outbreak of coronavirus infection paralyzed one of the most important centers of the world container trade - the Chinese province of Guangdong. Has led to delays in shipments and acceptance at ports in southern China. Magnesium sulphate, manganese sulphate and other products began to run longer than planned. As a result of the epidemiological situation, port shipments were partially closed, and part of the goods were redirected to neighboring ports. Which led to overloading of the Nansha terminal, as well as Shekou. As a result, congestion became stronger and shipments were delayed. Given the situation, experts suggest that the situation will heat up and grow. The situation will be worse. Than during the closure of the Suez Canal and container prices will rise even more. Note that the Yantian terminal allows sending goods for 13.3 million TEU per year. And a two-week downtime is 0.55 TEU of shipped goods. And the workload of Shekou and Nansha is increasing every day.

For a week, from 25 to 31 May 2021, the port terminal was completely closed to minimize contamination among staff. All premises, equipment and machinery are treated with disinfectants several times a day. Vessels are redirected to neighboring terminals. All staff are tested every day. Therefore, before ordering unloading of cargo in a neighboring port, you must find a driver with a car and so that he must have a negative result. Otherwise, you will not get approval. Even if the person has no visible signs. As a result, he says, some vessels have been rerouted to alternative ports in Nansha, Shekou and Hong Kong, but they are not able to accommodate all the accumulated cargo. In addition, customs requirements limit the ability to transfer cargo from one port to another. "At the same time, containers are put up for loading in a limited time," - said the representative of the logistics and transportation department of FM Logistic in the Russian Federation, Dmitry Sukhoversh. He also added that according to the data provided by the partners of the firm, in the district of the ports of Huangpu, Foshan, a lockdown was announced and the movement of freight transport was cut.

“As a result, a series of circumstances, we are experiencing difficulties. Departure from Shekou and Nansh ports. Few free cars with verified drivers. Melamine supplies to Russia have become longer. Constant checks for the passage of shipping. "- says the regional head of Itella's transportation in the Russian Federation, Yulia Nikitina." The restrictions on the capacity of ports were introduced abruptly, as a result, the delay in processing containers is up to a week. This hits the prices for transportation, and also increases the total transit time for hypochlorite, potassium sorbate and other products up to 16 days. " “The situation with railway transportation within Russia is also not the best, sulfuric acid and ammonium nitrate can be shipped on a first come, first served basis. Moreover, the queue is actual, new volumes of import and transit cargoes cannot be accepted, ”adds Baskakov, director of container rail transport. The customs broker for registration, Yuliana Shlenskaya, reports that the number of sea transportations has increased. Some of the cargo, previously sent from China and the provinces by trains, were redirected by sea flights. Due to the unpredictability of delays from China.

After the resumption of the work of all Chinese ports - the shipment of containers and the reception, according to Mario Volzhichek, will be unstable for another 2-5 weeks. Everything will recover, and the resulting congestion will subside. In this case, the ripple effect will remain due to the stop of the empty flow.

“As for the world as a whole, the echoes of port closures will be felt for 2-3 quarters. Literally until the end of 2021 and the beginning of 2022, ”he believes.

Market participants are sure of one thing - the current situation will cause a further increase in freight rates.

But these are only forecasts, and what will really happen - only time will tell. Hopefully, China will cope with the pandemic as soon as possible and reopen ports at full capacity. They already have a well-honed scheme of struggle and a way out of such a situation.

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Update 10/09/2021



Evergreen has placed an order for the construction of 24 container ships. The total construction cost is $ 1.1 billion.

The project has already been approved, the planned construction of the ships will be carried out at a Chinese shipyard called Huangpu Wenchong Shipbuilding.

The contract stipulates the design and commissioning of container ships of three options (differences in size):

- the capacity of 11 vessels will be 3000 TEU,

- 11 more ships capable of transporting 2300 TEU (that is, the container ship will be able to transport 2300 twenty-pound containers by sea),

- a pair of vessels of the smallest volume of 1800 TEU (this is 1800 20-foot containers).

The price of container ships ranges from $ 27 million to $ 50 million.

This news is good news! As soon as the vessels are able to transport cargo, the tension on the lines of sea transportation of raw materials with China will begin to fade.