Explained: How will the Ningbo port shutdown in China impact global trade?

Given the rest of the port is still functional, the traffic meant for Meishan is being redirected to other terminals.

What is the potential impact of the closure?

Despite the diversion of shipments to other terminals, experts are anticipating a backlog of consignments with average wait times being expected to rise.

In May, port authorities at the Shenzhen’s Yantian port in China had similarly shut down operations to contain the spread of Covid-19. The wait time back then had increased to around nine days.

The South China Morning Post reported that the Meishan terminal mainly services trade destinations in North America and Europe. In 2020, it handled 5,440,400 TEUs of containers.

During the first half of 2021, the Ningbo-Zhoushan Port handled the most cargo among all Chinese ports, at 623 million tonnes.

How is it likely to affect global trade?

In the aftermath of Covid-19, global supply chains have remained fragile mainly on account of closures and lockdowns that affected both the manufacturing and the logistical segments of the chain. This has not only resulted in a growing backlog of shipments, but has also caused freight charges to go up as demand outgrew the supply.

An extended closure of one of the biggest terminals at the third-busiest port in the world could further exacerbate the stress in global trade.

Bloomberg reported, quoting Ningbo’s Customs Bureau, that the biggest exports through Ningbo port in the first half of this year were electronic goods, textiles and low- and high-end manufactured goods. The top imports included crude oil, electronics, raw chemicals and agricultural products.

The slowdown in maritime trade was also a key contributing factor in the global chip-shortage, that is affecting several industries.