As Shanghai reopens, with a quarter million containers delayed, China orders Tianjin to close - Trade News

2022-06-16 14:28:15 By : Ms. Rose wu

While Tianjin -the 9th busiest port in the world and the 6th in China- begins to close its "doors" due to a new isolation decided by the central government of China as part of its unusual "Covid zero" health policy, Shanghai could begin to recover normality as of this Wednesday, June 1.Although the Shanghai container terminals remained operational, the paralysis of land transport led to a congestion of merchandise accumulated in factories and distribution centers equivalent to around 260,000 TEUs in the city that remained isolated for more than two months.Such is the calculation prepared by the specialized consulting firm Drewry, which estimated that the "blockades in China affected the global distribution of containers and added tension to a system that had been experiencing high levels of stress."Now, the company estimates, the upturn in activity will come up against low capacity due to the effects of congestion.And this, ultimately, will be reflected in the freight values.The main shipping market analysts take it for granted that freight rates on routes with Asia will adjust upwards in the coming weeks, which could only be moderated by a weak response from both North American and European demands.In short, if freight rates did not collapse with the blockades in China, it was due to the skillful response of the maritime industry in its “capacity management” of the hold, quickly removing ships from service and suspending calls.This was demonstrated by the freight indices reflected by Drewry WCI and by FBX, the Baltic index produced by Freightos.Now, the eyes of global logistics are on Tianjin, another of China's most important port cities: local authorities warned the population that they could not leave their homes unless absolutely necessary.And in this context, the Chinese government is making efforts to demonstrate that its health policy does not impact logistics activity, after showing the numbers thrown up by port activity so far this year: containerized exports grew by 1.7%, with the port complexes of Ningbo and Tianjin, precisely, leading the increase with rates of 27%.The total volume of cargo handled in Chinese ports was just 0.7% at the end of April, higher than that recorded in 2021.The port of Tianjin operates 18.3 million TEUs per year, and is known as the gateway to Beijing, the capital of China, and is also a maritime-rail connection node, which reaches Europe directly.All rights reserved.Platform Trade S.A.