Port traffic in Southeast Asia is the worst its been in over 6 months - and could create even more chaos for US supply chains

·2 min read
FILE PHOTO: Containers are seen at Yantian port in Shenzhen, Guangdong province, China July 4, 2019. REUTERS/Stringer/File Photo
FILE PHOTO: Containers are seen at Yantian port in Shenzhen Reuters
  • Some of the world's largest ports in Asia are facing major backlogs.

  • Hong Kong and Shenzhen were forced to suspend operations this week due to Typhoon Kompasu.

  • Delays will tack weeks on to shipments that already take double the usual travel time from Asia.

Two of Asia's largest ports are facing their highest backlog in over six months, according to a report from Bloomberg.

Ports in Shenzhen and Hong Kong - key thoroughfares for tech products that connect South China to the rest of the world - had 271 ships at the locations on Friday. The ports had 109 ships waiting off the coast to enter the port, a jump from the 67 ships waiting to dock the day before.

The congestion will likely take several weeks to ease, adding to a host of disruptions in the global supply chain. It currently takes about 73 days, or 83% longer than pre-pandemic times, for goods to travel from Asia to their final destination in the US, according to data from Freightos. If the pace does not increase, goods that have not yet left China will not reach the US in time for the holiday season.

Port of Shenzhen, the third largest port in the world
Port of Shenzhen, the third largest port in the world Marine Traffic

Some of the largest ports in the US are facing similar issues as the supply chain struggles to overcome COVID-19 shutdowns while consumer demand booms. Ports in Southern California, the main passageway for imports from China, are at near-record capacity, with ships waiting as long as five weeks before they can dock and unload.

The congestion in the Asian ports will only add to the turnaround time. Cargo ships wait weeks on both ends of their journey to be unloaded, further exacerbating a global shortage of shipping containers.

On Tuesday, the ports were forced to suspend operations as Typhoon Kompasu passed through the South China Sea, leaving 1 person dead and 21 injured in Hong Kong, according to state-side media outlets. The tropical storm has since made landfall in Vietnam, disrupting shipping processes in Haiphong, one of the country's largest ports.

As of Friday, port operations in Shenzhen and Hong Kong have mostly returned to normal, but the temporary closures have set shippers even further back at a time when the ports were already facing backlogs. James Teo, an analyst at Bloomberg Intelligence, said the congestion at the two ports would likely extend into February.

Experts have warned that the shipping crisis will continue well into 2023. The White House has taken some steps to address the backlogs in Los Angeles and Long Beach ports, but executives have told shoppers that the holiday shopping season will be impacted by the shipping delays as shortages and price hikes abound.

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