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The official word from the Chinese leadership is that the pandemic threat is well under control but that assertion has been proved to be wholly inaccurate by events. There has been yet another partial port shutdown due to the spread of the virus. The port of Ningbo-Zhoushan has been closed and this will have a swift impact on the volumes expected to arrive at West Coast ports. The supply chain crisis caused by the pandemic is not new but there had been some hope that the worst was in the past. The timing of another crisis could not be worse as these container ships are full of items the retailers want for the coming holiday spending season. The costs of maritime shipping have gone up as many companies are now requiring insurance against stranded ships.
There are actually two major issues involved with this decision to shut yet another Chinese port. The most obvious is that volumes will be down from China and perhaps for several weeks. This port is the third largest in the world and the busiest in terms of tonnage. It regularly handles over 970 million tons of cargo annually. These shipments cover a very broad range from consumer goods to industrial goods and most of this is destined for the US. Beyond the fact there has been a major disruption in the supply chain there is the issue of how the Chinese have handled this situation.
The shutdown is the result of China’s “zero tolerance” stance. All it took to institute the shutdown was a single case of the virus. At least a single case the authorities knew about. The system that is in place to ferret out infections is anything but foolproof and there are assertions that many manage to escape the testing protocols or simply declare they are infection free without proof. The fact is that China continues to less than forthcoming regarding the viral threat and what they intend to do about it. the Chinese vaccine is far less effective than the versions used in the US and Europe–around 50 percent vs. 96 percent. Furthermore the vaccine has not been distributed evenly–far more has been made available in the region around Beijing than in the southern areas. There has been no advance warning from China as regards actions such as shutting down ports and that leaves shippers in a permanent state of confusion.