Skip to content
Search AI Powered

Latest Stories

newsworthy

Containers back up on Chinese docks as coronavirus triggers closures

Ripple effects seen in U.S. supply chain as agriculture trade group asks ocean carriers to skip penalty fees for delays.

Cargo is backing up on Chinese docks due to government efforts to curtail the spread of the deadly coronavirus by forcing workers to stay home, and that congestion is already causing a domino effect on supply chains in the U.S. as well, a food industry trade group warned today.

The Agriculture Transportation Coalition is lobbying ocean carriers to refrain from charging extra demurrage and detention fees for containers that are now becoming stuck at Chinese terminals for longer than the typical "free time" provided to exporters and importers in ocean transportation contracts.


That change is needed because of the broadening impact of the coronavirus—now officially named COVID-19 by the World Health Organization—an infectious bug that likely originated in December in wild animal food markets in the central Chinese city of Wuhan. The disease has since sickened thousands and killed hundreds of people, moving the Chinese government to slow the spread of the virus by constricting travel, a policy that has also hobbled the flow of trade.

The growing backup of containers at China's ports is now causing ripple effects in the U.S. as well, the group says. "Within China, the supply chain has been compromised, starting at the China marine terminals extending all the way to the ultimate inland destination points. The supply chain disruption has crossed the Pacific and is evident at U.S. marine terminals, and inland," Peter Friedmann, executive director of the Agriculture Transportation Coalition, said in a release.

Consequently, U.S.-based agriculture and forest products exporters have been finding their cargo getting "stuck" at inland origin points, rail ramps, truck yards, refrigerated warehouses, and domestic marine terminals, the group said.

That impact occurs because China's production of both industrial products and of consumer goods—such as apparel, footwear, and electronics—has slowed due to factory shutdowns that originally began during annual Lunar New Year celebrations but that were extended by government-imposed quarantines and closures.

In turn, there is now "dramatically less" cargo and fewer containers flowing from China to the U.S., and therefore fewer sailings by ocean carriers that are cancelling departures to avoid losing money by operating partly empty ships. Thus, there is an emerging threat of a shortage of ocean carrier capacity to take U.S. exports to China on what would ordinarily be the "backhaul" of a roundtrip ocean voyage, the group said.

For example, those effects are being seen at the Port of Virginia, which reported today that the number of empty containers for export in January fell more than 27% to 13,882 TEUs as a result of the uncertainty being created by the coronavirus, an increase in blank sailings, an extension of the Chinese Lunar New Year closures, and quarantines in China.

And on the west coast, leaders at the Port of Oakland reported that containerized import volume had jumped 7.3 percent last month over January 2019, lifting hopes for recovery from a U.S.-China trade war. But at the same time, Port of Oakland Maritime Director John Driscoll said it was "possible" that concern over the fast-spreading coronavirus could dampen trade growth. "The uptick in January was encouraging but we're hearing from shipping lines that cargo volume could moderate over the next few months," Driscoll said in a release.

Refrigerated exports in danger of spoiling on overcrowded docks

One industry that may be particularly susceptible to the impact of container crowding on Chinese docks is U.S. food exports that require constant electricity to stay fresh inside their refrigerated containers. Specifically, shipments of protein products such as beef, pork, and poultry may arrive on Chinese shores but not be able to locate enough open electrical outlets for plugging in their refrigeration units, the Agriculture Transportation Coalition said.

The problem has arisen because marine terminals lack the capacity to store all the containers coming off of arriving ships, so terminal operators must maintain efficient throughput to quickly move containers through terminals, past inspections, and onto waiting trucks or trains. However, that domestic freight routing has recently been hindered due to China's initiatives to restrain the spread of the virus by restricting workers' commutes to the docks and truckers' routes from place to place, the group said.

"One of the first messages we sent to our protein exporters was to be aware of the lack of additional capacity at China's marine terminals for refrigerated containers. In short, the plugs (supplying electricity to the refrigeration units on the containers) were fully utilized, with no more available for additional temperature-controlled containers," Friedmann said.

In response, the group is urging exporters to confirm with their ocean carriers at the very outset—before loading containers onto trucks or rail destined for seaports—that containers will be able to transit to the ultimate customer in China once they arrive. "For instance, before removing protein from refrigerated warehouses, the U.S. exporter should get a commitment for their ocean carrier that there will be available reefer plugs at the destination port," Friedmann said.

Editor's note: This article was revised on Feb. 11 to add information from the World Health Organization.

The Latest

More Stories

DHL graphic on online shopping marketplaces

DHL report shows seven factors about American online shoppers

Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.

First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).

Keep ReadingShow less

Featured

schneider app screenshot for owner operators

Schneider seeks more business with owner-operators

Transportation and logistics service provider Schneider National Inc. is reaching out to owner-operators, encouraging them to do more business with the Wisconsin company using an updated digital platform.

Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.

Keep ReadingShow less
port of vancouver

West coast dockworker strike could dent Canadian economy

The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.

Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.

Keep ReadingShow less
trucks used by jillamy 3PL

Texas 3PL Mode Global acquires Jillamy’s freight brokerage arm

The Texas third-party logistics firm (3PL) Mode Global has acquired the freight brokerage business of supply chain service provider Jillamy, saying on Monday that the deal advances its strategy of expanding its national footprint.

Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.

Keep ReadingShow less
Clorox partnership helps suppliers meet carbon reduction targets

Clorox partnership helps suppliers meet carbon reduction targets

Consumer packaged goods (CPG) provider The Clorox Co. has partnered with Manufacture 2030 (M2030) to help Clorox's suppliers meet their carbon reduction targets and advance the company's long-term goal of reaching net-zero emissions by 2050.

In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.

Keep ReadingShow less