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Why one of the world’s biggest container ports in China facing congestion?

by admin January 24, 2025
January 24, 2025
Why one of the world’s biggest container ports in China facing congestion?

In the days leading up to the Lunar New Year holiday, exporters in Shenzhen faced a logistical challenge as they raced to load and ship their cargo from Yantian Port, one of the world’s busiest container terminals. 

The impending eight-day holiday break threatened to significantly disrupt supply chains and delay shipments.

Adding to the urgency was the looming threat of additional US tariffs on Chinese goods. 

These potential tariffs, which were under consideration by the US government at the time, created an environment of uncertainty and incentivized exporters to expedite their shipments before any new trade restrictions could be implemented.

The combination of the Lunar New Year holiday and the potential for increased tariffs led to a surge in activity at Yantian Port, according to a Reuters report.

This rush to ship goods created a bottleneck at the port, with long queues of trucks waiting to enter and container ships vying for berths.

Increase in quota

Yantian port had announced earlier this week a 15% increase in its daily container quota to 15,000 units for the period of January 20-28. This port manages one-third of Guangdong’s international trade and one-quarter of China’s exports to the US.

A truck driver, Li Guoliang, usually takes far less time to transport a loaded container to the port’s container yard. However, on Thursday evening, the task took him two hours, according to Reuters. 

Li told Reuters:

The major reason is that factories rushed to ship before the holiday, and limited container quota at the port and space at container yards resulted in the congestion.

Another trucking company informed Reuters that one of their truck drivers was also stuck in the port area for over 24 hours on Thursday.

Threat of US tariffs

US President Donald Trump announced on Tuesday that his administration was actively considering the implementation of a 10% punitive tariff on imported goods from China.

This potential tariff, aimed at addressing trade imbalances and alleged unfair trade practices, could have significant ramifications for both countries.

The President indicated that February 1st was a possible deadline for a final decision on the matter.

If implemented, the 10% tariff would increase the cost of Chinese products for American consumers and businesses, potentially dampening demand for these goods. 

This could lead to a decrease in Chinese exports to the US and impact various sectors of the Chinese economy.

In response to President Trump’s tariff threat, the Chinese commerce ministry expressed on Thursday that China is open to working with the US to maintain stable and healthy economic and trade relations. 

US buyers and Chinese factories had already taken action prior to Trump taking office on Monday, according to Reuters.

China’s exports to the US surged in December as some American companies, anticipating new Trump tariffs, frontloaded shipments and increased inventories of items such as toys, furniture, and electronics, according to the report.

Trucking fees surge

Yantian’s container throughput reached a record 17.365 million standard containers in 2024, showing a nearly 7% increase from the previous year.

This growth aligns with the 14.6% surge in Shenzhen’s exports, which climbed to an unprecedented 2.81 trillion yuan in the same year.

Trucking fees from Shenzhen’s Fuyong logistics hub to Yantian Port have more than doubled this week to over 2,500 yuan ($345) due to worsening congestion. 

The congestion has also led to an additional container drop-off fee of more than 1,000 yuan at Yantian. These increased fees are denting exporters’ bottom line.

Li attributes the congestion to Trump’s tariff threat.

If there is no relation, why wouldn’t the factories ship the goods after the LNY holidays?

The post Why one of the world’s biggest container ports in China facing congestion? appeared first on Invezz

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