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  • Writer's pictureStephen Fodor

Delta variant hits Dongguan, Port of LA expects delays, holiday shipments likely to see disruption

Monday Morning Wake Up Call

June 21, 2021

China's Dongguan is latest southern city to be hit by COVID-19

(Reuters) - The manufacturing hub of Dongguan in China's most populous province Guangdong launched mass coronavirus testing on Monday and cordoned off communities, after the city detected its first infections of a flare-up in the province.

The Delta variant of COVID-19 has dominated infections in the provincial upsurge, the first time it has hit China. Seen by experts as highly transmissible, the variant was first identified in India.

Dongguan launched its citywide testing program following two cases reported since Friday.

City authorities told residents not to leave the city, except for essential reasons. Those leaving must show negative test results within 48 hours of departure.

A few entrances on highways to other cities were closed, while all shuttle buses linking airports in other cities and check-in terminals in Dongguan were halted. Some museums and libraries in the city also closed to visitors.

Its factories are still running, however.

"(Workers) need to do COVID tests, but it's not a prerequisite for them to be able to enter factories," said King Lau, who helps manage a metal coating factory.

"My staff will do (their COVID tests) after work, although there will be long queues."

Guangdong has reported 168 confirmed infections since May 21, with nearly 90% of them in its capital, Guangzhou.

The cases are few compared with the rest of the world and previous outbreaks in China. But Guangdong, a key entry point for travelers and cargo, is not taking any chances.

Although its capital has reported no cases for two successive days, the province as a whole is still detecting new infections.


Strict disinfection and quarantine measures since May 21 have led to congestion of vessels waiting to berth in one of China's busiest container ports, Yantian International Container Terminal (YICT) in Shenzhen.

"The impact would be bigger than the Suez Canal incident," said Patrik Berglund, chief executive of Xeneta, an ocean freight rate benchmarking firm headquartered in Oslo.

Although 50 vessels were waiting outside the port, more than 160 were being affected, he added.

"We've seen exporters who cannot wait for the port congestion to ease turning to trucks to send the cargoes from China to Europe."

Normal operations are expected to resume by end-June.

But even as congestion at Yantian eases, traffic at the Shezhen port of Shekou and the main Guangzhou port of Nansha remains high, shipping firm Maersk said on its website.


Chinese experts said Guangzhou's fight against the Delta variant served as a warning to other cities against complacency.

China reported 17 new confirmed mainland infections on June 20, down from 23 a day earlier, its health authority said on Monday, adding that one of the new cases one was a local infection in Dongguan, while the rest were imported.

"All our workers were asked to complete their testing yesterday, and the results were all fine," said the owner of an electronics plant in Dongguan.

"Also, we've all been given the second shot of the vaccine," said the factory owner, surnamed Wang.

Guangdong has sped up its vaccination effort since the outbreak. By May 19, before any local cases were reported, the province of 126 million people had administered 39.15 million doses. By June 20, the figure was 101.12 million, meaning more than 60% of its doses were injected over one month.

To Read More:

New COVID-19 outbreaks in China threaten to delay shipments at America’s largest port

(YahooFinance) Fresh coronavirus outbreaks in Southern China are threatening to create new bottlenecks at America’s largest port again, even as the recovery in Western economies help to dramatically reduce its inventory.

In an interview with Yahoo Finance Live, Port of Los Angeles Executive Director Gene Seroka said he expected to see "a little bit of a lull" with roughly a third of its cargo coming in from the Pearl River Delta in the Guangdong Province.

“What we’re seeing is that 50% of normal productivity is taking place,” Seroka said.

“Some of the liner shipping companies are omitting those South China ports. There is some cargo that's moving cross-border into Hong Kong. Hong Kong's five terminals are really full right now.”

With nearly 60% of its containerized imports coming from China, the Port of Los Angeles remains acutely sensitive to any delays in Asia.

China reported just 20 new coronavirus cases on Thursday, according to data from Johns Hopkins University. While that number remains well below the country’s peak last year, concerns about an outbreak linked to the Delta variant, first detected in India, have led to strict lockdowns in the vital industrial province of Guangdong.

That has contributed to massive shipping delays in major Chinese ports. In Shenzhen, an outbreak among dockworkers at the Port of Yantian brought traffic to a near halt.

The Wall Street Journal reports some ships have had to wait up to two weeks to take on cargo at Yantian, causing the price of shipping to soar more than 60% since the start of the year. The world’s largest container line Maersk recently warned of delays of up to 16 days outside of Yantian, saying the situation was far worse than delays caused by a vessel blockage in the Suez Canal in March.

“I don't think we have an answer to [the extent of the delays]. We'll probably see a little bit of a lull, if they're working at 50% of capacity,” Seroka said. “When folks get back healthy, and on the job, we'll see the business pick up a little bit. But at a third, and with the information system, the port optimizer that we have being able to see three weeks out with some precision, we'll be able to manage this.”

The potential bottlenecks come as the Port of LA continues to rebound from the lows of the pandemic, with Western countries leading the economic recovery. In May, the port processed more than a million container units, marking the busiest month in the port’s 114-year history. Inventory is down by 75%, while the number of ships anchored and waiting to be processed is likely to reach near zero by the end of this month, Seroka said.

Outside of Los Angeles, port congestion continues to snarl supply chains causing significant challenges across sectors. On Monday, the National Retail Federation sent a letter to the White House, requesting a meeting with the Biden administration, to discuss solutions to alleviate the disruptions. In a recent survey of NRF member companies, more than 95% of retailers said they had been affected by port and shipping delays.

Seroka said maritime traffic is likely to ease in the second half of the year.

“We're going to be coming up on back-to-school season fall fashion, as well as year-end holidays. What remains to be seen, though, is how the American consumer pivots from buying these retail goods as we have for the last 11 months to getting back into the service sector,” he said.

To Read More:

A COVID-19 outbreak at a major Chinese port is worsening the global shipping crisis, which could disrupt orders for the holiday season, experts say

(Business Insider) Shipping disruptions around the world could lead to a shortage of goods for the holiday season, according to industry experts.

A recent coronavirus outbreak in the province of Guangdong, in southern China, prompted authorities to introduce strict COVID-19 measures, causing congestion at four major ports, Reuters reported on Friday.

This is worsening a worldwide shipping crisis that has hiked costs and led to shortages of semiconductors, chicken, and other goods, as Insider's Rachel Premack reported.

"Supply chains are more complex and delicate than ever," Tom Fairbairn, an engineer at the middleware company Solace, told Insider. He recommended customers use real-time data — for example, from Unilever's database — to see whether there would be disruptions.

"Retailers using this approach can say with confidence whether their Christmas inventory will be delayed or not," he said. Otherwise, he said, retailers could be "wasting existing stock, incurring unnecessary late fees, missing opportunities, and delaying deliveries."

The new restrictions at the Chinese port, which include disinfection checks and limits on vessel numbers, have triggered a backlog in shipments in ports in Yantian, Shekou, Chiwan, and Nansha, Reuters reported.

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

Delays are "piling up" in the other three ports as well, Haupt said.

James Baker, the container-shipping editor at the industry publication Lloyd's List, told the BBC that retailers were already putting in orders for the holiday season because they know how slow shipping is at the moment. He said this was leading to more congestion.

"Traditionally, the peak season for container shipping starts in the third quarter as everyone stocks up for the holiday season in the west, but this year we're just in a permanent peak season already, and heaven knows what's going to happen come August or September," he said. "It could get crazy."

Baker told the BBC he expected shipping delays to last at least another year. Until then, customers in North America and Europe will continue to wait longer than usual for orders, he said.

More than 50 container ships were waiting to dock in the Outer Pearl River Delta as of Friday, compared with about 20 ships in the same period last year, according to Refinitiv data cited by Reuters. This was also more than in February 2020, when the coronavirus pandemic stopped China's shipping business, the report said.

The industry is still suffering from the 400-ship backlog caused by the Ever Given container ship getting lodged in the Suez Canal in March. The ship was freed at the start of April, but Maersk, the world's largest shipping company, has said it could take months to resolve delays.

"We were just beginning to see light at the end of the tunnel" after the Suez Canal blockage, Haupt told the BBC. "But then unfortunately we ran into this situation in Yantian."

The COVID-19 crisis has sparked several issues for the shipping business — customers' spending habits fluctuated during the pandemic as people stayed at home, shifting the demand for shipments and destabilizing the industry.

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