Some foreign media outlets have been reporting that congestion of cold-chain containers at Chinese ports could impact the global supply chain, but a Global Times investigation into the matter revealed that while inspection of frozen food may cause some delay, it is a confluence of global factors, including poor handling of the virus overseas and a lack of inspection at certain overseas ports that causes the congestion, not China’s anti-epidemic efforts.
In interviews with the Global Times, industry insiders and businesses describe a domino effect across the globe, in which cold-chain shipments face serious delays and huge uncertainty, given the raging epidemic in many parts of the world, particularly in the US, which has led to a shortage of containers and a risk of disruption to cold-chain trade.
To address the problem, efforts will be needed from ports across the world, including improved inspections of shipments, the industry insiders said. Chinese ports and related industries are also ramping up efforts to tackle the stockpile of containers for cold-chain food imports, and container producers are accelerating production.
Congestion
China has been in the spotlight recently as Bloomberg reported on Thursday that a huge pile-up of fish cargo at a Chinese port risks impacting shipments of frozen food across the country and beyond, and said China’s controversial testing of foreign food for the virus is having an impact on supply chains.
Industry insiders and market watchers said that the epidemic is the main reason for the congestion.
If there is proper epidemic safety inspection at the port of departure from other countries, the pressure on Chinese ports would not be so heavy. The reason why the inspection time is longer and stricter is because other countries are not strict at all, a senior industry insider told the Global Times on Friday.
China has the right to protect the safety of its people, he added.
The latest outbreak in Dalian, Northeast China’s Liaoning Province has seen 51 confirmed COVID-19 cases and 31 asymptomatic carriers as of January 7. Local health authorities said that most of the initial infections were among dockworkers unloading contaminated cold-chain cargo from a Russian-owned ship.
Shijiazhuang, the capital of North China’s Hebei Province announced on Sunday the suspension of fruit imports, removal of on-shelf products and the sealing of stocks after detecting coronavirus on a batch of imported cherries at a wholesale market. Aside from imported cherries, more imported food products, including red king crab, pork and ice cream have been found with the virus on their outer packaging.
As of midnight on January 13, the national customs sampled nearly 1.3 million items, and 47 positive results were detected, while other samples were negative, according to the latest report by the General Administration of Customs.
To reduce the risks from the imported cold chain cases, COVID-19 nucleic acid sampling detection is carried out on imported cold chain food, especially imported seafood, the customs said.
Global container shortage
Currently all food imported through cold chain containers needs to be tested for coronavirus before being sold on the market and the rest of the world has formulated similar anti epidemic policies according to the local situation.
The testing for COVID-19 in cold chain imports at Chinese ports is proceeding at the normal speed and it is unusual for refrigerated containers to get stuck in the ports due to not passing the customs inspection, a person from a Shanghai-based international logistics company who did not wish to be identified told the Global Times on Thursday. “In general, we export more than we import, which is also one of the reasons why there has been a lack of refrigerated containers,” the person said.
Wu Minghua, a Shanghai-based independent shipping industry analyst, also agreed that China is exporting more containers but the return rate is slow.
Wu said the number of workers from European and US ports has decreased a lot since the epidemic – for example, the number of workers at the port of Los Angeles has been reduced by almost 50 percent – which has had a major impact on port efficiency, resulting in a shortage of cold chain containers and dry cargo containers.
He predicted that the container shortage will be difficult to reverse before March-April.
The problem of turnover of refrigerated containers is not due to testing for the coronavirus, said an employee surnamed Wilson from a Shanghai based import and export trading company.
“A lot of issues – from the time of unloading at the port, the speed of customs declaration, the efficiency of the consignee to the returning time – affect the turnover of the refrigerated containers,” he said.
“The biggest difficulty is the fact that the US epidemic is too serious and there is too much uncertainty about the US port of destination,” he said.
Market watchers and insiders said the shortage of containers is not caused by the ports, but the companies that own the containers and the shipping companies that send them.
The international shipping volume has shrunk in the past year due to the epidemic, and shipping companies would normally expect to be losing money, but shipping companies actually made strong profits last year, the senior industry insider told the Global Times.
Maersk, the world’s largest container shipping firm, reported a 39 percent quarterly increase in earnings before tax in the third quarter, amid a stronger-than-expected pickup in demand.
Even if there has been a pile-up of containers in Dalian, it is an exaggeration to say this can affect the global supply chain, industry analyst Wu said on Friday.
China’s efforts
To address the problem, efforts are needed from ports across the world to rein in the epidemic and improve inspection of shipments, industry insiders said.
China’s inspections show the responsibility it is taking for global cargo transport, because if infected containers leave China, it would be bad for epidemic control in other countries, they said.
Meanwhile, the rising number of imported cases indicates the prevention work at the ports in China needs to be sustained despite the difficulties. “The sterilization cycle is long and therefore leads to a backlog, which is common in almost all the ports across the country,” Qin Yuming, secretary general of the cold chain logistics professional committee of the China Federation of Logistics & Purchasing, told the Global Times on Thursday. “Given the difficulties of sterilizing all the containers at each port, we are designating new warehouses for sterilization work to take place,” said Qin, adding that this may include distributing containers to inland ports for sterilization first, as the warehouses there are more empty.
Industry analyst Wu said China is also trying to tackle the container shortages by helping shipping companies to return as many empty containers from overseas as possible on the return journey.
Port of Dalian said on Thursday that the production efficiency of the domestic cruise terminal (DCT) terminal has been steadily improved, and the waiting time for ships to get berths and the entrance and exit of the terminal gate has been greatly shortened.
The port vowed to spare no effort to maximize operating efficiency and solve port pressure problems.
