Meishan Terminal in Ningbo could partially reopen this week

Date: Wednesday, August 18th, 2021
Source: Supply Chain Dive

‚ÄčUPDATE: Aug. 18, 2021: A phased reopening of Meishan Terminal in Ningbo, China, could begin this week as the facility tries to work through its growing backlog, according to a Thursday update from project44. The update cited port authorities, which suggested a full reopening could come Sept. 6.

As of Tuesday, 41 ships were waiting at anchor outside of Meishan Terminal, according to project44.

Carriers continue to omit the gateway from sailing schedules, according to Wednesday updates from Maersk and Hapag-Lloyd. Maersk's alert showed gate-in and gate-out operations at Meishan Terminal were still suspended.

"Due to aforementioned disruptions, we regret to inform you that a few vessels including our partners' vessels have omitted Ningbo in order to protect schedule reliability," Maersk said.

UPDATE: Aug. 16, 2021: The Meishan Terminal in Ningbo, China, remained closed Monday and operations will remain suspended "until further notice," according to a customer advisory from Maersk.

Maersk noted that some ships that call Meishan have been able to shift to other terminals within the Ningbo complex.

OOCL said there were four ships in its fleet that were affected, with two planning to omit Ningbo and two planning to head for other terminals in the gateway. Maersk noted five ships it has a vessel sharing agreement with that are omitting the port completely.

The number of port calls at Ningbo fell to less than 60 last week from an average of 200. There have been 37 blank sailings at the gateway as of Friday, according to data from project44.

Dive Brief:
At least three ships operated by CMA CGM, Seaspan and APL have already omitted Meishan Terminal in Ningbo, China, from their schedule as a result of the gateway's closure following a positive COVID-19 case at the location, according to a customer alert from the Hapag-Lloyd. A customer alert from MSC also noted it was adjusting sailings out of Ningbo to "match the actual departure dates from Asia."
Hapag-Lloyd said affected owners could consider shifting their volume to Shanghai. Nerijus Poskus, the VP of global ocean for Flexport, said that moving shipments to Shanghai would be the best alternative for those impacted by the Meishan closure.
Hapag-Lloyd is still waiting "to see what happens," Nils Haupt, a spokesperson for the carrier, said in an email. "No detailed information available as of yet. But for sure: if this turns out to be serious and ongoing we should expect major disruptions."

Dive Insight:
The shutdown of the terminal began at 3:30 a.m. local time on Wednesday. The closure doesn't just affect the berthing of ships, it also means that equipment can't be picked up and cargo can't be dropped off, according to a customer alert from Norman Global Logistics, which has operations in Ningbo.

It was the result of a 34-year-old worker at Meishan Terminal testing positive for COVID-19, according to the South China Morning Post.

"Ningbo is the fourth-largest port globally," Poskus said. "So it's a major, major port for the world."

A spokesperson for Kuehne + Nagel said it was "Too early to say" what the impact of the closure will be, but said there were 35 ships waiting at anchor outside of the port as of Wednesday afternoon.

And the terminal that is affected is one of the newest and busiest ports in Ningbo. There is more than 140 services per week out of the Meishan Terminal, according to Poskus.

With the terminal shutdown, stakeholders remain unsure of how long the shutdown could occur. But experts say the impact could be similar to what was seen in Yantian at the end of June, a situation that started similarly with a shutdown stemming from COVID-19 cases among port workers.

"If the closure is more prolonged, the effects will be significant, as the other terminals in Ningbo cannot fully absorb a more extended closure of the Meishan terminal," Stefan Holmqvist, a managing director at Norman Global Logistics, said in an email. "We saw in Shenzhen when Yantian was closed, the other terminal did the utmost to compensate but could not take up the full effect of lost capacity."

Poskus said that affected ships will likely have to omit Ningbo altogether due to the way terminal contracts work, requiring them to use particular facilities. He said that COSCO, CMA CGM, OOCL and Evergreen are the carriers with the most sailings at the Meishan Terminal.

"Given how high prices in shipping are, you don't expect shipping lines to just wait for it to reopen, they're going to skip the port and keep going because every day costs them hundreds of millions," Poskus said.

He said that if cargo owners need to shift volume to Shanghai then they should act quickly.

"Arranging trucking to Shanghai is a very real alternative," he said, adding that finding space won't be easy, but that it "always comes with a price." Though if cargo owners wait too long then "trucking will get so congested it's no longer going to be an option."

Judah Levine, research lead at Freightos, noted the impact could worsen delays for U.S. importers.

"Congestion and delays are already growing at the ports of LA and Long Beach and though disruptions at Asian origin ports could result in a temporary lull of arrivals in the US, they will only add to delays for US importers," Levine said in a Thursday market update.

 

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