Movements in Ningbo, World’s Third Busiest Port, Reignite Hopes of Resuming Operations

Counting two weeks of shutdown, the world’s third busiest port in Ningbo, China is likely to resume operations once authorities confirm no COVID cases in the port vicinity. The closure of the port skyrocketed the global freight rates pushing the Baltic Dry Index (BDI) to an eleven years high of 4147 points, increasing as high as 4.8% this month.

Although the terminal still remains closed, the movement of ships from the terminal sparked optimism on restoring operations soon.

The port mainly handled shipments to Europe and North America. Container rates from China to the US West Coast surged to $18,555 per TEU (twenty-foot equivalent unit) earlier this month, now calming down to $15809 per TEU, which is still the highest over 15 years. While China to the US East Coast is currently $17584 per TEU.

Earlier the port shut down operations in accordance with China’s “zero tolerance” policy on COVID after one worker was found to be infected. The closure of the port disrupted global supply further which was already strained since the beginning of the pandemic. Where container shortages were already a pressing concern, closure of the port made the situation much worse.

The costly container costs would result in higher retail prices which the consumers would have to bear due to the added current shortage.

Meishan terminal-Zhoushan Port, Ningbo is one of the busiest container ports by volume. According to data provided by the World Shipping Council, it handled 28.72 million TEUs in 2020. BDI index reflects the average prices paid for the transport of dry bulk materials across more than 20 routes and is a key index monitored by the market.