- Coronavirus lockdown traps drivers, leaving reefers stranded and a plug shortage.
- Terminal operations and pick-up of inbound containers in China has been slow.
- Reefer boxes in transit to Shanghai or Tianjin might be re-routed for transhipment.
- To cover the additional cost of re-routing the cargo, a congestion surcharge of $1,000 per container will be applied.
- So far only 20% of factories have successfully resumed production, and it is expected to reach over 50% by next week.
- This reefer bottleneck in China is likely to impact the supply of reefers available for export, as well as for time-sensitive trades elsewhere in Asia.
It is a reefer box bottleneck due to the Coronavirus crisis and there is a warning warning regarding surcharges and diverted cargo from the carriers, writes Sam Whelan for an article published in The LoadStar.
APL’s message to customers
“Terminal operations and pick-up of inbound containers in China has been slow. Consequently, most reefer plugs at the yards of all container terminals in Shanghai and Tianjin are already occupied.”
Pick-up at container terminals in Shanghai
The carrier briefed its customers that
- reefer boxes awaiting pick-up at container terminals in Shanghai may be temporarily stored and plugged in on board a vessel alongside, while
- Reefer boxes in transit to Shanghai or Tianjin might be re-routed for transhipment.
Reefer plug shortage
According to Zim, there is a reefer plug shortage at Ningbo and Xingang apart from Shanghai. This has forced the carriers to divert cargo from these ports.
Cover additional cost
Zim said, to cover the additional cost of re-routing the cargo, a congestion surcharge of $1,000 per container will be applied for all reefer shipments arriving into Shanghai, Ningbo and Xingan.
Warning from Maersk
Maersk issued a similar warning to customers about cargo diversions. It had diverted cargo after yard densities reached “critical levels” with no reefer plugs available.
Surcharge
To cover the additional cost of re-routing, the line has also implemented a $1,000 surcharge for all reefer cargo arriving into Shanghai and Xingang.
Maersk recommends its customers to ship time-sensitive cargo (fruits, vegetables and frozen meat) to other Chinese destinations or other markets to avoid the congested ports.
Worldwide Logistics Group’s move
Dream Xu, general manager of Worldwide Logistics Group pointed out that the reefer congestion was due to a lack of truck drivers to move cargo through the terminals.
Ports overstocked
He said that most of the reefer containers were overstocked at the terminals, that resulted in lack of cold containers for customers to use.
Both Yangshan and Waigaoqiao ports [in Shanghai] are overstocked with a large number of reefer boxes, and the terminal is short of available plugs at the moment.
Trucking companies stopped
As the majority of their drivers were stranded in the coronavirus lockdown, Mr Xu said many trucking companies had stopped accepting new business, or accepting very few consignments.
This lockdown is “Preventing drivers and other workers from travelling back to their place of work”.
Warehouse ability
He added that this shortage of labour has reduced the ability of warehouses to receive and send goods.
Business standstill
Following the end of the extended lunar new year break, businesses were expected to resume. But it is reported that many have remained closed due to public transport suspensions or concerns over staff safety.
Mr Xu said that so far only 20% of factories have successfully resumed production. He also said that it is expected to reach over 50% by next week.
Impact of reefer bottleneck
He added that this reefer bottleneck in China will likely impact the supply of reefers available for export, as well as for time-sensitive trades elsewhere in Asia.
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Source: The LoadStar
