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

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My dear impertinents, dear impertinents,

It is about 500 ships which are blocked in front of the Chinese ports with a special mention for that of Shanghai.

The shutdown of Shanghai, introduced by the Chinese authorities to fight against 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 is now only running in slow motion. As a result, the number of ships waiting off the terminals is soaring. According to Bloomberg, 222 bulk carriers, mainly loaded with minerals and cereals, were waiting in front of the second largest port in the world on Monday, April 11.

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

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

Supply chains will crack.

Like at the worst time of the 2020 pandemic, when Wuhan had been totally locked down, and much of China partially locked down, never, I mean never had Shanghai been shut down for so long.

While 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 not seeming to want to break with their 0 Covid strategy, which risks being swept away, no, who is going to be swept away by the contagiousness of Omicron.

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

So why such stubbornness?

In the meantime, we will again experience major disruptions in our supplies, because most of your orders are either at the dock in Shanghai, or in blocked ships, or in factories not yet manufactured…

We are therefore going to experience a second peak of shortages which will inevitably be accompanied by a second peak of very high inflation.

Mobile stocks, i.e. in ships and in the transport stream are approximately 3 weeks. We are entering the third week. By the end of April the shelves will begin to empty, with always a lag time. Indeed, you currently have what will be sold wholesale this summer, and in June/July, we order what will be manufactured and delivered for the end of the year celebrations.

In a word ?

Store.

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

Prepare yourselves !

Charles SANNAT

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

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