This will enhance the availability of containers for global trade
It’s good news for the global supply chain as Shanghai, which has the world’s largest container-handling port, is finally lifting its lockdown from Wednesday after seven weeks of Covid-restrictions. The port getting back to normal will significantly help in the availability of containers for global trade.
From Wednesday, the Shanghai Municipal Government, will implement the ‘Shanghai Action Plan for Accelerating Economic Recovery and Revitalisation,’ which includes 50 policy measures in different areas, according to information available on the website of the Chinese Ministry of Transport.
Last month, the Royal Bank of Canada said in a report that ships awaiting berth at the Port of Shanghai were over 340, an over 30 per increase over April. This means if the average parcel size of a ship is kept at a bare minimum of 15,000 TEUs (twenty-foot equivalent units), the total number of containers stranded on the sea outside Shanghai port is 51,00,000 TEUs.
In 2021, Shanghai port handled nearly 270 million TEUs. It mainly handles mother vessels that connect China with the US and Europe, with the capacity of each ship being around 15,000 TEUs.
Shipping goods from a warehouse in China to the US currently takes 74 days longer than usual — double the time duration when compared to the pre-Covid period, said the report.
To effectively help foreign trade enterprises, Shanghai encourages port enterprises to reduce or exempt cargo storage fees for a specific period, encourages shipping companies to reduce or exempt demurrage fees for a specific period, and advocates port- and shipping-related enterprises to reduce or exempt import- and export-related logistics operation costs, the Chinese Ministry of Transport’s website said.
Previously, SIPG, COSCO SHIPPING Group and many other port and shipping companies, successively introduced preferential measures such as reduction or exemption of storage fees, demurrage fees, order change fees, and booking cancellation fees to help each other and overcome difficulties together, said the website.
“We are starting to see the situation in Shanghai easing, and are preparing how we help our customers best in this new phase, where additional capacity in terms of both landside and equipment might be needed. The situation continues to be fluid,” said Anne-Sophie Zerlang Karlsen, Head of Asia Pacific Ocean Customer Logistics, Maersk, a global shipping company.
June will be a milestone month with Shanghai reopening, which could release a surge of vessels and containers, said Jon Monroe, an expert in shipping based in the US.
A positive impact
Shanghai opening up will have a positive impact, with stranded container vessels starting to move . This will ease pressure on container availability. Many countries rely on shipments from Shanghai, including raw materials, and India is no exception. With the opening up of Shanghai, shipping movements will enhance, vessel availability will increase and container slots will improve, said G Raghu Sankar, Executive Director, International Clearing & Shipping Agency (India).
Shanghai port used to handle around 30 ships a day. This dropped by half in the last few days, leading to a huge backlog. The next one month is going to be crucial to clear, he added.
Published on May 31, 2022