AKTUELLT JUST NU

China’s zero-Covid policy is so strict that it shut down a whole shipping terminal after just one case

12/8 2021 11:15

Local officials said at a press briefing that all inbound and outbound services at the Meishan terminal at the Zhoushan port have been suspended till further notice. That’s a key terminal servicing shipments to Europe and North America.
Nick Marro, lead of global trade at the Economist Intelligence Unit, said that China’s “zero Covid” approach suggests that this latest port disruption may not be the last.
Dawn Tiura, CEO of Sourcing Industry Group, said that shippers will likely pass costs on to consumers, heating up global inflation further ahead of the key holiday season.

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.

Analysts say China’s “zero tolerance” approach toward Covid will exacerbate already stressed supply chains this year. Some warn that this may not be the last closure at a port as long as Beijing continues to take this stance.

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. 

Supply chains have already been majorly disrupted this year by crises such as the shortage of shipping containers, and the Suez Canal incident. In June, Covid infections triggered disruptions at shipping hubs in Southern China, including the key Shenzhen and Guangzhou ports — the first time that China suspended operations at ports due to Covid cases.

Implications of China’s ‘zero Covid’ stance

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.