Ports chaos as China's zero-Covid lockdowns threaten new global trade crisis

More than a tenth of goods being shipped globally are stuck at ports as Chinese lockdowns threaten to cause a fresh supply chain crisis.

Blockages in global trade have surged to their highest since last September’s supply chain woes as disruptions stoke inflationary pressures already battering households.

Some 12pc of goods are stuck in harbours with the number of ships waiting outside ports rising sharply again in Shanghai, Hong Kong and the North Sea, according to Liberum and Fleetmon data. 

It is only just below last year’s supply chain crisis peak when just under 14pc of goods were blocked in ports.

Lockdowns in China have added fuel to the fire after some of the congestion in global supply chains eased following last year’s crisis. 

Ships waiting outside the ports of Shanghai and Zhejiang have risen to 2pc of global capacity with Covid restrictions causing major holdups at some of the world’s busiest ports. 

Surging cases have pushed China’s “zero Covid” policy to breaking point with a strict lockdown in Shanghai dragging on despite the milder omicron variant.

Meanwhile, congestion in the North Sea has jumped to the peaks hit during the supply crisis last year at around 1.5pc of global capacity.

“The main development of March is the reappearance of shipping congestion in the ports of Asia and the North Sea,” said Joachim Klement, analyst at Liberum.

“Although we have already seen the effect of the Ukraine war on the resurgence of congestion, other effects are yet to come. Effects such as rising fuel costs, carrier boycotts, and rail-to-sea conversions are yet to be reflected in shipping costs increases.”

Shipping costs are on the rise again as congestion builds after falling sharply from last year’s peaks. 

The Baltic Dry Index, a closely watched trade barometer tracking shipping costs, is up more than 60pc since its nadir in January and is beginning a fresh uptick.

While supply issues should be eased by reopenings in the West shifting demand from goods to services again, China’s struggle to contain omicron is causing severe disruption again. 

Last week almost 500 ships were stuck outside Shanghai, the world’s largest container port, according to Bloomberg data.    

In addition to problems at Chinese ports, BCA Research analyst Roukaya Ibrahim said that supply problems are being worsened by Covid restrictions on lorry drivers.

“Travel restrictions, quarantines, and policies that require truck drivers to take Covid tests before crossing municipal borders are delaying the inland transportation of goods between factories and ports,” he said.

“The trucking shortage, along with a shortage of port workers, is also creating congestion off China's ports which is slowing down the delivery of goods in and out of China.”

The chaos at ports is expected to stoke inflationary pressures further as prices rise at their fastest pace in 30 years in the UK. Deutsche Bank said global supply chain problems would be part of a “very strong cocktail” causing inflation in the UK to surge above 8pc until next year.