The shipping industry continues to watch closely as new cases of multiple variants of the COVID-19 virus are reported in different regions of China, but despite being in the areas around major ports, so far carriers are reporting few interruptions. Just weeks from the opening of the Winter Olympics and factories rushing to get goods shipped before the Lunar New Year, China is reporting outbreaks of the virus in the areas around Ningbo, Yantian, and now the industrial hub of Tianjin near Beijing is acknowledging the first large cluster of the Omicron variant.

In 2021, China’s zero-tolerance policies to the virus caused significant disruptions in port operations. In May and June, one of Shenzhen’s Yantian container terminals was closed after an outbreak of the virus which caused a backlog of ships while carriers attempted to divert to other ports. Similarly, in August, Chinese officials closed one of the terminals in Ningbo for nearly two weeks.

Last week, Maersk cautioned customers that the trucking capacity around Ningbo was just starting to recover after an outbreak of the virus at a clothing factory in the Beilun District of Ningbo. Restrictions were adding delays for trucks moving loaded and empty containers between factories and the port. Maersk, however, reported earlier today that transportation capacity has gradually recovered from an estimated 10 percent last week to 75 percent this week. They are, however, cautioning, that operational efficiency is negatively impacted by the requirement of nucleic acid testing.

“At present, various prevention and control work in our district is progressing in an orderly manner, and the overall situation is stable,” Xia Dong, member of the Standing Committee of the Luohu District Party Committee and deputy head of the district commented on the outbreak in their area. At the press conference in the Shenzhen province, officials reported that a new testing program identified four additional cases but they believe they are all the Delta variant.

Similarly, to the north in the Chinese city of Tianjin officials launched a massive testing program saying they have already completed 3.4 million residents after two cases of the Omicron variant were acknowledged in the 14 million residents in the region. By Monday evening they were acknowledging 41 positive tests with 31 people having symptoms and 10 asymptomatic. China had previously reported a few cases of Omicron which they said were all in international arrivals, but this becomes the first acknowledged cluster of the variant.

While China is again imposing restrictions, they so far have been limited in scope and not directly impacted the ports. The fear however is that China might impose stricter limits to try to reduce the spread of the virus ahead of the Olympics.

Some carriers are reporting shifting cargoes to other ports, such as Shanghai, but overall containers are continuing to move. The next three weeks are considered a critical period before the holiday period. The Port of Los Angeles, for example, last week already reported a new “mini-peak ahead of the lunar new year,” but then there should be a natural lull as factories close for the holidays.

Marex Media