Shipping industry logjam could hold up Christmas orders

·2-min read
GUANGZHOU, CHINA - JUNE 08: Aerial view of shipping containers sitting stacked at Nansha Port, operated by Guangzhou Port Group Co., on June 8, 2021 in Guangzhou, Guangdong Province of China. (Photo by Qian Wenpan/Nanfang Daily/VCG via Getty Images)
Aerial view of shipping containers sitting stacked at Nansha Port, operated by Guangzhou Port Group Co., on June 8, 2021 in Guangzhou, Guangdong Province of China. Photo: Qian Wenpan/Nanfang Daily/VCG via Getty Images

A series of holdups for global shipping since the pandemic began have meant there could be a knock-on effect as far ahead as Christmas 2021 on the delivery of goods. 

The latest issue is an outbreak of COVID-19 in the Guandong province in the south of China. This has caused congestion at ports. 

The BBC reported that due to the tensions in delicate global supply chains the knock-on effect of these delays could last for many months. 

"One of the biggest ports in China has basically closed down for close to three weeks. They have some berths in operation, but nowhere near enough," Nils Haupt, communications director at the German shipping line Hapag-Lloyd told the BBC. 

Haupt said that shipping lines have been diverting vessels away from Yantian to nearby terminals in the Delta area due to the delays. 

The tailbacks in China compound a number of other setbacks for the industry, with shipping firms struggling to bear the dramatic changes first triggered by the pandemic. 

When global lockdowns first began there was a halt to much activity at sea. However, when things opened up again the barrage of orders and missed goods meant logjams at key ports. 

Supply chains are also still feeling the hit from the recent days-long blockage in the Suez Canal in March, which held up $9.6bn (£6.8bn) of goods each day.

The Ever Given, the ship that caused the blockage, is the length of four football pitches and one of the world's biggest container vessels. The 200,000-tonne ship is capable of carrying 20,000 containers.

At the time, companies said the blockage will impact the entire trading schedule for millions of tons of commodities. Companies said they were reworking itineraries for commodities worth billions of dollars, which could involve significant demurrage costs.

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The BBC reported that because of the lack of spare capacity in the global shipping industry, problems in one region can have a ripple effect around the world for months. 

Disruptions raise the possibility for UK retailers of a shortage of goods around Christmas time. Christmas ordering season would normally start in the third quarter, but since all the issues with global supply chains shippers are under pressure to deliver earlier. 

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