China Closed the Third Busiest Port Due to Covid-19

China, as well as Australia, have a zero tolerance approach when it comes to Covid-19. Both countries take strict measures to deal with even one case, and that’s exactly what China did this week. It made the decision to close a key terminal in its Ningbo-Zhoushan port, the third busiest port in the world after one worker tested positive for Covid-19.

The country’s decision will likely put further pressure on already stretched supply networks. It was the second time this year that China suspended operations at one of its busiest ports. Analysts warn that this may not be the last closure at a port as long as the country continues to take this position.

The world’s second-largest economy is experiencing a resurgence of Covid cases due to the highly transmissible delta variant. On Monday, daily cases surpassed 140, the highest number of daily infections since January. Authorities are working hard to deal with the delta variant. They ordered mass testing in a few areas and imposed widespread movement restrictions in main cities.

China and the global trade

The third busiest port in the world handled 27.49 million twenty-foot equivalent units (TEUs) of container throughput, in 2019. Last year, container volume jumped nearly 5% to reach 28.72 million TEUs.

China suspended all inbound and outbound services at the Meishan terminal at the Zhoushan port on Wednesday until further notice. The Meishan terminal is key to servicing shipments to Europe and North America. The suspension of services at the terminal comes as container shipping rates continued to rise in 2021. For example, container shipping rates from China and East Asia to the west coast of North America rose over 270% this year to $15,800 per TEU. In the meantime, rates to the east coast jumped more than 200% to hit over $17,500 per TEU.