GRIDLOCK IN GLOBAL SHIPPING

Network that keeps world economy afloat is facing its biggest test

TOWERING cranes work overtime swinging containers from cargo vessels in the Chinese port of Lianyungang, racing to keep ahead of a perfect storm unleashed by the pandemic that has created gridlock in global shipping.

As the huge containers were flung onto trucks, Shi Jiangang, a top official with Chinese shipping company Bondex Logistics, reflected on the backlog.

“It’s been a very great challenge,” he said.

The ship being offloaded was a South Korean vessel that normally also carries passengers, but has been given over entirely to cargo. In the distance, other vessels waited.

Lianyungang is not alone. The global shipping network that keeps food, energy and consumer goods circulating — and the world economy afloat — is facing its biggest stress test in memory.

The situation arose last year as the pandemic jammed the patterns by which shipping containers are shared around the world.

As many countries began easing Covid-19 restrictions last year, a wave of pent-up demand from consumers bingeing on Internet purchases shocked supply lines.

Exports from nations like China soared. But since the end of last year, vessels have piled up outside overburdened Western ports, leaving Asian exporters clamouring for the return of empty containers needed for further shipments.

At Lianyungang — China’s 10thbusiest port — desperate firms are pressing rail-cargo containers into maritime service, placing rush orders for new ones and rerouting some shipping to other ports.

The price to ship a 40ft container from Lianyungang to the United States has soared to more than US$10,000, from the usual US$2,000 to US$3,000, Shi said, adding that this put pressure on everyone in the supply chain.

American consumer demand has been a key driver.

The Port of Los Angeles last month said processed volume in February jumped 47 per cent yearon-year, the strongest February in its 114-year history. The number of empty containers stranded there has also soared.

An LA port official last week said over two dozen ships were waiting to berth outside LA and Long Beach, the two busiest ports in the US. Normally there is no wait, but delays now average over a week.

Commodities information provider S&P Global Platts said vessels were also logjammed in Singapore, the world’s busiest container transshipment port, and that sailing-schedule reliability was at a 10-year low.