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As if rising shipping costs, global product shortages and the recent Suez Canal crisis weren’t enough, a late-May outbreak of COVID-19 among dockworkers in parts of the Guangdong province in China has forced the Yantian Port — the fourth busiest in the world — to shut down. The halt in shipments has sent shockwaves through an already beleaguered industry and has further slowed port operations in neighboring regions as shipping companies scramble to keep product moving and meet customer demands.

Record Delays at Yantian Port

Our analysis of ocean data in the 2 weeks following the news of the Yantian outbreak shows unprecedented congestion at the Yantian Port, and an all-time-high dwell time of 20 days. Among other findings:

  • Port congestion at Yantian Port accounted for a 122% increase in dwell time in the two weeks following the outbreak

  • Dwell departure times increased 242% in the same period

  • Areas around the Hong Kong, Yantian, Shekoum and Nasha port regions are all seeing large clusters of ocean vessels, with triple-digit increases in the last two weeks

Impacts on the US Market

The US market has opened back up to a strong economy and rising consumer demand for goods, but the late-May shutdown is causing repercussions for US businesses and consumers. Imports are down sizably — from electronics to furniture to automobiles — and late shipments are quickly rising, which can lead to increased demurrage and detention fees, customer satisfaction issues and a potential bullwhip effect on ports. We looked at FourKites platform data from the busiest ports in the country over the last two weeks and found that:

  • US imports decreased in the weeks of June 6 and June 13, by 11% and 6% respectively.
  • We saw a slight dip in late shipments for US imports, which declined 2% during the week of June 13 over the previous week, when it grew by 16%.
  • Exports have remained relatively stable compared to imports, and have seen just a slight decline over the weeks of June 6 and June 13.

  • The Port of Los Angeles and Long Beach have seen a continuous increase in the number of late shipments. We observed growth of 28% and 2% at these ports, respectively, for the week of June 13.

  • We have observed a continuous decline in imports at some of the busiest ports in the country. Specifically, the Ports of Long Beach, New York and Los Angeles registered continuous declines in imports of 11%, 4% and 23%, respectively, during the week of June 13, compared to the previous week.

Delays Will Stretch into Fall

The situation in Asia remains uncertain, and while Yantian Port says it should be back to normal by end of June, we anticipate that it may take months for the cargo backlog to clear, and for the global ripple effects to subside. To combat these lasting impacts, businesses must plan ahead, leverage technology that can help them remain agile, and make careful considerations on if and how to reroute the already backed up goods coming in from overseas.

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