Container Freight rates to increase on more China lockdowns

The number of container ships waiting off Qingdao port continues to rise as the country doubles down on its Covid Zero policy, adding more delays to an already strained global supply chain.The increased delays across China are expected to increase freight rates. According to data, nearly 72 vessels were spotted off Qingdao port in Shandong, which almost doubled at the end of February. The increased delays across China are expected to increase freight rates. This year, the volumes of container ships are being exacerbated by lockdowns aiming to curb new coronavirus outbreaks. Salmon Aidan Lee, head of Wood Mackenzie, told the media that the Covid-19 pandemic situation has worsened in the past few days at Qingdao. He expects freight rates to increase because of increasing delays. There is also a growing backlog of containers off Shanghai Ningbo and Zhoushan ports. There were 262 ships, up from 243 a week ago. However, the situation in Shenzhen and Hong Kong has eased a bit, down to 162 vessels. The rapid spread of the pandemic had already strained supply chains reeling from the Russia-Ukraine war. Shipping lines like AP Moller-Maersk have cancelled their services to Russia and halted some rail shipments from China into Europe. China has locked down Shenzhen and the northeast province of Jilin to control the pandemic, threatening technology and auto manufacturing output. The Yantian container port operations are continuing normally. China's zero-tolerance policy has led to several partial closures of ports over the past year, exacerbating concerns about disruptions to supply chains and increase in production costs. The surging price of global oil and gas due to the Russian-Ukraine are increasing inflation risks in China as factory costs remain high. Image Source Also read: Mangalore port's container terminal to begin operations by March-end