Shipping companies are bracing for further port congestion in China due to rising Covid-19 infections and severe weather conditions.
Local shipping sources said piloting services at the Port of Nanjing — one of the main ports along the Yangtze River — are currently not available after one pilot tested positive for coronavirus.
China's zero-tolerance policy on Covid-19 infection has been cited as the reason for the severe action taken by the Port of Nanjing.
Sources said dry bulk forward freight agreements (FFAs) reacted by jumping by $1,000 earlier in the week, despite the Christmas holiday season. It is understood the jump was caused by the Covid-19 infection at the pilot station in Nanjing.
"The piloting service has currently stopped, but the Nanjing port is still in operation," a shipping source said. "Domestic and foreign-owned vessels that do not need pilots are still able to call at Nanjing and discharge their cargoes since they will not come in direct contact with the pilots."
There is concern that other ports along the Yangtze River may adopt the same precautionary measure taken by the Port of Nanjing, if more Covid-19 cases are detected.
"China has huge volume of cargoes and once strict policy is taken up to mitigate Covid infection, it will have a big impact on the shipping industry," the source said.
TradeWinds has learned that ports in the north of China are already adhering to a strict "Covid working roster".
This involves 14 days of work, followed by 14 days of quarantine in dedicated facilities, then 14 days of leave. This work schedule has been recommended by China's Ministry of Transport.
Ports in south China, due to the larger volume of cargoes, are carrying out seven-day work, followed by seven-day quarantine, and seven days off. But that could change and raise the prospect of more congestion.
Big impact
"If Covid cases escalate in the south of China, we are afraid that they may adopt the 14 days work schedule as recommended by the state, and this would have a big impact on the industry," the source said.
"The ports in the south of China are managing because they are on the seven-day roster schedule. But if strict restrictions are imposed on them, then congestion will be severe."
Severe weather in China has already caused further congestions at ports in north China.
The Port of Bayujuan in Liaoning province is said to have around 100 vessels waiting to discharge or load cargoes. Ships at the Port of Rizhao need to wait for around one week before they can offload grain cargoes.
