Shipping & Logistics

Africa faces shortage of goods as China ports shut on Omicron surge

china

Containers stacked at a port in Lianyungang in China’s eastern Jiangsu province. PHOTO | AFP

Summary

  • China’s northeastern city of Dalian reported its first case of Omicron last week where two people who travelled there from Tianjin confirmed to have Omicron.
  • China-Africa trade reached $185.2 billion between January and September of this year, up 38.2 percent year on year.
  • Shipping companies said they are re-assessing the situation before the resumption of operations in different Chinese ports.

The partial closure of a number of ports in China as a result of the rising cases of Omicron variant is expected to cause a serious shortage of commodities globally in the next few weeks with Africa expected to be the most affected region.

China’s northeastern city of Dalian reported its first case of Omicron last week where two people who travelled there from Tianjin confirmed to have Omicron, becoming the second major Chinese port struck by the highly contagious variant after Tianjin, a port neighbouring Beijing.

China-Africa trade reached $185.2 billion between January and September of this year, up 38.2 percent year on year.

Different shipping lines have suspended operations in different Chinese ports with at least three ports partially closing its operations.

Shipping companies said they are re-assessing the situation before the resumption of operations in different Chinese ports.

Ships are looking to avoid Covid-induced delays in China causing growing congestion at the world’s biggest container ports.

The world’s biggest shipping lines including AP Moller-Maersk A/S and CMA CGM SA are skipping Ningbo port after the closure, according to Simon Heaney, senior manager of container research at Drewry Shipping Consultants Ltd.

Japan’s Toyota and Germany’s Volkswagen have both suspended factory output due to partial closure of the Chinese ports as a result of the Omicron variant.

The companies prefer to divert shipments to other ports rather than wait outside Ningbo for an unknown length of time while the Covid-19 outbreak continues.

Some other ships are willing to wait, with the vessels staying at a shared anchorage for the Shanghai and Ningbo ports.

With outbreaks now recorded in other ports, there’s an increased risk of China denying ships berth and with cities like Tianjin on lockdown, truck drivers are unable to haul cargo from factories to ships and vice versa, increasing friction in the supply chain.

The shipping industry has been plagued by recent disruptions, which have driven freight rates to record highs.

About 20 million people in China are in lockdown as the country tries to contain Omicron.

Most of them are in the city of Xi’an in the west and Henan province in eastern China. Several port cities, including Shanghai and Shenzhen, have imposed limited lockdowns.

Some of the coronavirus cases in China have been detected in travellers arriving from the United States, prompting the Chinese aviation regulator to order more than 60 scheduled flights from the US to be cancelled in recent weeks.

The US Embassy in Beijing sent an alert to Americans in the country warning that they could fall under restrictions with little warning.

The "measures may include mass testing, closures, transportation disruptions, lockdowns, and possible family separation," the embassy said in the message, noting that it was "aware of reports of food and medical shortages in some affected areas."

As China tries to enforce zero-Covid measures, supply chain watchers are growing increasingly concerned about the flow of goods from the country’s factories.

Africa will be one of the regions to be affected by the supply chain disruption.