China has shut down a key terminal at its Ningbo-Zhoushan port, the third busiest port in the world, after one worker was found to be infected by Covid — a move that will likely put further pressure on already stretched supply networks.
It was the second time this year that the country suspended operations at one of its key ports.
Dawn Tiura, CEO of Sourcing Industry Group — an association for the sourcing and procurement industry, said China’s stance will lead to “severe” supply chain consequences.
“China has a zero tolerance for COVID. One person testing positive is enough to shut down (the) port,” she told CNBC in an email.
Ningbo-Zhoushan is the third busiest in the world by container volume. In 2019, it handled 27.49 million twenty-foot equivalent units (TEUs) of container throughput, according to the World Shipping Council. Container volume in 2020 rose nearly 5% to reach 28.72 million TEUs.
All inbound and outbound services at the Meishan terminal at the Zhoushan port were suspended on Wednesday until further notice, according to Chinese state media. The terminal is key to servicing shipments to Europe and North America.
China’s zero tolerance for Covid approach suggests that this latest port disruption may not be the last, said Nick Marro, lead of global trade at the Economist Intelligence Unit.
“China’s ‘zero Covid’ approach means that officials will prioritise pandemic mitigation over everything else, especially given the highly contagious nature of the Delta strain, and the risks that the current outbreak poses to future economic performance over the third quarter,” he said in a note on Wednesday.