Yantian Port Faces Severe Delays Amid a COVID-19 Outbreak in Guangdong

Yantian Port Faces Severe Delays Amid a COVID-19 Outbreak in Guangdong

Severe congestion at the Yantian International Container Terminal (YICT) has been reported following a COVID-19 outbreak among port staff, including 16 cases of infection, which was discovered on May 21. The YICT in Shenzhen is a leading gateway with an annual handling volume of over 13 million TEU, characterized by deep-water berths and mega-vessel handling capabilities. Port authorities have since imposed strict quarantine and disinfection measures which have led to delays and disruptions to shipping in the area.

Figure 1: Waiting times at the Yantian International Container Terminal, in days. Source: Everstream Analytics.

As seen in Figure 1, waiting times for vessels to berth at the Yantian International Container Terminal have soared to over 16 days as of June 8 due to the outbreak, compared to average levels of 0.5 days in mid-April. Increased measures to combat the outbreak, along with a shortage of manpower and lower productivity, have led to an increase in waiting times. Moreover, YICT halted the acceptance of laden export containers from May 25 until June 1 due to the increasingly serious delays in vessel schedules. The current laden gate-in waiting time is about 1 to 4 hours. Operations were suspended at 3 of the port’s 20 berths to carry out disinfection measures, which reportedly caused a shortage in labor.

Yard utilization remains elevated at the YICT amid the COVID-19 measures, which has led to the terminal only accepting laden exports with slots available for containers within three days of a vessel’s estimated time of arrival. As seen in Figure 2, the percentage of yard utilization has remained over the full capacity limit of 80 percent and has peaked during the week of May 24 at 96 percent following the discovery of the cases. Yard utilization is likely to continue at heightened levels, as container pick-ups are reportedly delayed by up to 10 hours.

Figure 2: Percentage of yard utilization at YICT. Source: Everstream Analytics

A key logistics hub for Shenzhen’s manufacturing sector  

YICT is a vital transport hub as it mainly handles exports to Europe and the United States from Shenzhen, a technology hub that hosts large manufacturing operations. About 90 percent of the world’s electronics such as televisions, air conditioning units, mobile phones, and drones are produced in the city. It also hosts many tech startups and multinational technology conglomerates, including Huawei. The ongoing congestion has caused manufacturers to face delays and international shipping lines have diverted to nearby ports.

Carriers are currently diverting to the following ports in southern China to meet delivery times:

PortsStatusLaden Gate-In Waiting TimeVessel Berth Waiting Time
ShekouOpen3-4 hours4 days
NanshaOpen15-20 hours1-2 days
ChiwanOpen3-5 hours4 days
Da Chan BayOpen2-4 hours1-2 days
Hong KongOpenN/A2- 2.5 days

The nearest ports to Yantian are Nansha, the deepwater port of the Port of Guangzhou, and the Port of Hong Kong. However, Nansha is also facing congestion as it is handling an influx of cargo from the Yantian and Shekou diversions. As a result, truck drivers are facing several days of delay for container loading and unloading. Terminal congestion and vessel delays at Nansha are likely to remain for another two weeks or longer as the COVID-19 situation in Guangdong province remains fluid. The authorities on June 7 tightened travel restrictions further amid the continued spike in COVID-19 cases. This is likely to exacerbate operational challenges at Nansha, which may subsequently affect industries located in neighboring provinces such as Guangxi, Yunnan, Guizhou, Sichuan, Hunan, Hubei, and Jiangxi.

Challenges have been also reported at the Port of Hong Kong, where customs clearance is required. This means that while barge services are available to berth at Hong Kong’s Kwai Chung Container Terminal, cross-border cargo delivery can only be carried out by truck drivers from Hong Kong. Moreover, the authorities have enhanced COVID-19 testing for cross-border trucks to and from Hong Kong on June 2. Under the new regulation, all cross-border trucks will need to undergo a sterilization process, while the trucker will need to wear protective clothing including goggles, gloves, and shoe covers. For import activities, all cargo will require sterilization. The procedure may lead to extra cost and slow operational productivity. 

Outlook

The mass COVID-19 testing among dockworkers at YICT, resulting in berthing congestion and cargo delays, are likely to continue in the coming weeks. The port already had a backlog of over 20,000 containers to unload, with 40 container ships anchored outside the terminal in open water, during the temporary halt.

Manufacturers in Guangdong are also planning to reduce the number of international orders and take a wait-and-see approach, and thus export orders are expected to slow in the second half of the year due to the spike in cargo costs as well as shipping delays. Customers with shipments to the aforementioned ports are advised to keep abreast of the local developments to avoid berthing delays and production times. Everstream Analytics will continue to monitor the situation, and provide its users with updates in near-real time.

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