China's Yantian Port Suffers a 175,000-container backlog.

4 mins read  Team SealuminatiJune 25, 2021

China's Yantian Port is facing a container pile-up, which, according to some experts, could have aftermath worse than the March Suez Canal mishap. However, many containers are escaping from backlogs globally. China's current COVID-19 containment center, Yantian port, is still attempting to reopen the world's economy.

Approximately 298 boxships skipped the southern container port in Guangdong, between June1-15, reported Project 44 (a shipping and logistics forum). The containerships were estimated to have over 3 million 20-foot equivalent units (TEU) combined capacity.

There was an increase in blank sailing - ships when they cancel journeys as they are not allowed to load-unload cargo or skip the scheduled port, by 300%, claims Project44 analysts.

The median dwell time at the Yantian International Container Terminal jumped from a 7-day average for over two weeks to 23.06 days on June 15.

The entire ships' cargo was not meant for Yantian, yet the loaded export container volume left behind flooded the port, creating backlogs. Unexpected business transport costs and excessive inventory deficits per platform added to the backlog problem.

Presently, almost 175,000 containers are backlogged at the Yantian. Moreover, even if the terminal starts operating at 70% of its capacity. A delay of 12,000 TEU/day will still be there.

On Tuesday, Yantian Port officials stated that normalization of operations was required by the end of the month. This is not impossible, as workers have returned and additional berths have reopened.

On Thursday, the world's largest container line, Maersk, claimed that terminals have become global trade bottlenecks since the end of last year. This happened due to the damage caused by the ongoing pandemic and a substantial volume push.

Lars Mikael Jensen (head of the network, Maersk), said, "The situation is projected to improve, with bottlenecks expected to be alleviated, buying patterns expected to normalize, and new boats and containers expected to enter the market in 2021, implying that the current vessel and container scarcity is just temporary."

Moreover, the arrival of ships has been chaos, making the shipping lines' services look nonexistent, analysts said. In April 2021, the quality of plans reached 22% and has dropped since then.

CU and BAL Lines, are two shipping lines making their way along the Trans-Pacific routes. Each line will charter 2,300 to 2,550 TEU vessels. This additional induction of shipping lines is expected to regulate the container flow. Recently, due to the new entry of shipping lines, some ports have managed to escape from the backlogs.

There are certain anticipations of more shipping lines entering the maritime industry in 2021. With rumors of new entrants on Trans-Pacific routes, the all-time high charter rates are bound to fall in comparison to current ones.