Analysts at Russell Group’s ALPS Marine platform have projected that the partial closure of China’s port of Ningbo may threaten $172 billion worth of global trade and the export of $39.2 billion worth of Integrated Circuit Boards (ICBs).
According to the Freightos Baltic global container freight index, already the cost of shipping from China and South East Asia to the East coast of the US has already hit a record high just as the previous disruptions at Yantian and Suez had delayed schedules and caused many producers to scamper in order to secure key commodities for their products.
A news report by Reinsurance News linked to CMA CGM SA, the closure of Ningbo port, which was due to a member of staff testing positive for COVID-19, has created a problem which is likely to develop as the port will only accept containers within two days of a ship’s estimated arrival time.
Already, many experts are expressing concerns that the disruption may have a large impact on the holiday season, particularly in the U.S, as the port accounts for 22% or $16 billion worth of exports to the US annually.
Russell Group’s analysis further showed that 11% or $8.3 billion goes to Long Beach, which is experiencing a large surge in demand with a backlog of ships waiting to enter the port.
Commenting on the challenge at the Ningbo port, Russell Group’s Chief Executive Officer, Suki Basi, said: “The closure of Ningbo comes hot on the heels of the recent disruption at Yantian and both serve as a timely reminder to organisations and re/insurers alike of the fragility of global trade.
“Fragility, that means that any slight disruption to the network of trade, whether that be a closure of a port or a blockage of a shipping route, creates chaos for shippers, global supply chains and ultimately consumers.
“It is encouraging that many organisations and re/insurers are waking up to the new reality of trade disruption which is here to stay for the foreseeable future.
“It is with this in mind, that Russell Group has been working hard to create new solutions for companies operating in this connected trade environment as our data analytics provides them with the insights needed to thrive”, Basi stressed.
