Yantian Port slowdown follows Suez Canal example in pushing volumes to air

Shenzhen’s Yantian Container Port returned to nearly full operational efficiency late in June, after a drop to less than 30% productivity caused by a late May COVID-19 outbreak at the port . While the terminal is working through its backlog, freight forwarders warn that the widespread impact on global logistics will likely outweigh the impact of the Suez Canal blockage during the first quarter. [caption id="attachment_96037" align="alignright" width="450"] Shipping containers sit stacked next to gantry cranes at the Yantian International Container Terminals, operated by CK Hutchison Holdings Ltd.'s Hutchison Port Holdings Trust (HPH Trust). Photographer: Qilai Shen/Bloomberg[/caption] While wait times at the port and secondary ports in the region were expected to drop quickly after the operations restarted, the greater impact on supply chains would be from the cargo stuck in warehouses, Akhil Nair, VP global carrier management and ocean strategy at SEKO Logistics, said in a media call held hours before the re-opening of most of the port’s capacity. “The terminal itself has a backlog that they believe that they can manage reasonably quickly within a couple of weeks,” said Nair. “However, the market backlog that is cargo sitting at a customer's factory or on door, on a chassis or in temporary warehouses in and around the Dongguan-Yantian area — the expectation currently is that it will probably take closer to one month as of now to clear this backlog or get it somewhere close to current.” See also: Cargo Chat: Dimerco’s Jeffrey Shih on peak season expectations With problems plaguing ocean freight through much of 2021, “a lot of commodities that would not typically move via airfreight are moving,” said Brian Bourke, SEKO’s chief growth officer, during the call. “We are seeing clients leverage airfreight as an option when they can." While one major reason behind the pivot is the rise of e-commerce, traditional retailers are also sometimes opting for air despite the higher cost, to keep their products available within the domestic market, according to Bourke. Airfreight is a historically expensive shipment mode, but as Dimerco Express’ Chief Executive Management Jeffrey Shih noted in a recent interview with Air Cargo World , ocean freight rates have soared themselves, especially with the disruption in Yantian, on ex-China lanes. “Europe is already more than 10-times [the cost] compared with before COVID-19, USA for ocean is at least five or six times more,” said Shih. “Now you have the shortage of the port congestion from origin and destination, and you also have the equipment shortage. So, now customers willing to pay the high, high rates in order to move the containers, otherwise they have to ship by air for sure in order to meet their production requirement, or the distribution requirement in a consumer market like the U.S.” Many of the shipments converting to air from the Shenzhen region around the port are departing from Hong Kong (HKG), which Shih said is the region’s “traditional international airport,” as well as Guangzhou (CAN), which is growing in importance in terms of international cargo. “For Dimerco Express Group, Guangzhou now in the last six months has become very important, the actual station for us, because the capacity we have. For intra-Asia, some of the carriers, say China Airlines, EVA Air, Korean Airlines, Asiana or even Cathay Pacific — of course, Cathay Pacific are mainly using Hong Kong, but for the other carriers — they all have the freighters directly into Guangzhou. So we can ship out from Guangzhou to Taiwan and Korea, to Europe, to the United States, and that becomes a very important region for us.”

Yantian Port slowdown follows Suez Canal example in pushing volumes to air

3PLs expect effects on cargo transport ex-China to linger

First ATR freighter with Amazon registration emerges

Sullivan appointed IATA global head of cargo

Sullivan appointed IATA global head of cargo

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password