China's 'zero tolerance' Covid stance closes world's third-busiest cargo port

Fri 13 Aug 2021
Posted by: Noelle McElhatton
Trade News

Another Covid-related closure at a major Chinese port has raised concerns about the impact on global trade as China adopts a “zero tolerance” approach to Covid.

According to Lloyds Loading List, services were shut on Wednesday at a terminal at Ningbo-Zhoushan port after a worker tested positive. Ships have started to skip the port. 

Capacity down a quarter

Ningbo-Zhoushan is the world’s third-busiest cargo port. Closing the terminal on Meishan island until further notice will cut the port’s capacity for container cargo by about a quarter, reports the BBC.

The recent Covid outbreak at Yantian port paralysed it for more than a month, according to Aljazeera, causing goods to back up in factories and storage yards, as well as hiking already high freight rates. 

As reported in IOE&IT’s Daily Update bulletin, freight cost increases show no sign of slowing down as the key holiday and shopping seasons approach.

‘Not the last closure’

Analysts told CNBC that China’s “zero tolerance” approach toward Covid will exacerbate stressed supply chains, warning that this may not be the last port closure if Beijing continues the hard-line stance.

Dawn Tiura, CEO of Sourcing Industry Group said this will have “severe” supply chain consequences. The terminal, which is closed until further notice, is key to servicing Europe and North America. 

“China has a zero tolerance for Covid. One person testing positive is enough to shut down (the) port,” she said.

Nick Marro, lead of global trade at the Economist Intelligence Unit, said: “China’s ‘zero Covid’ approach means that officials will prioritise pandemic mitigation over everything else, especially given the highly contagious nature of the Delta strain.”