“Hundreds of ships stranded in Chinese ports!! » Editorial by Charles SANNAT

My dear impertinent, dear impertinent,

Nearly 500 ships are blocked off Chinese ports with a special mention for Shanghai.

The closure of Shanghai, introduced by the Chinese authorities to fight a new covid epidemic, is causing significant congestion in port terminals. Deprived of its workforce, placed in solitary confinement like the entire population of the city for a fortnight, the port of Shanghai now only works in slow motion. As a result, the number of ships waiting in front of the terminals is skyrocketing. According to Bloomberg, 222 bulk carriers, mainly loaded with minerals and grain, were waiting in front of the world’s second largest port on Monday, April 11.

This congestion is spreading to neighboring ports, with shipowners moving en masse away from the port where they can no longer unload. The neighboring and world’s largest port, Ningbo, is particularly affected, with 134 ships waiting according to Bloomberg. In total, 477 bulk carriers were waiting off Chinese ports on April 11, according to the US agency.

Container ships are not immune to congestion, waiting to load at Chinese ports. Almost 200 of them were thus blocked in front of Ningbo and Shanghai”.

Supply chains will crack.

Like at the height of the pandemic in 2020, when Wuhan had been in full lockdown and much of China had been partially in lockdown, never, I mean, never had Shanghai been on lockdown for so long.

Although the confinement was only supposed to last a few days, finally, after 15 days of confinement, it was decided to extend it again for 15 days, the Chinese authorities do not seem to want to break with their 0 Covid strategy, which risks being swept away. , no, who is going to be swept away by the Omicron contagion.

The Chinese authorities have made 0 Covid an untenable dogma, in fact.

So why so stubborn?

In the meantime, we will again experience major disruptions to our supplies, because most of your orders are sitting on the dock in Shanghai, on blocked ships, or in factories that have not yet been manufactured…

So we are going to experience a second spike in scarcity that will inevitably be accompanied by a second spike in very high inflation.

Mobile stock, ie on ships and in the transport stream is about 3 weeks. We are entering the third week. At the end of April the shelves will begin to empty, always with a lag. Indeed, you currently have what will be sold in bulk this summer, and in June/July we order what will be manufactured and delivered for the end of the year holidays.

In one word ?

Shop.

It is already too late, but all is not lost.

Get ready!

Carlos Sannat

“Insolentiae” means “impertinence” in Latin.
Write me at charles@insolentiae.com
Write to my wife helene@insolentiae.com

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