Covid outbreaks in Chinese ports could cause global goods shortages

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An outbreak of Covid-19 in southern China has combined with the rapid reopening of the world economy and a shortage of shipping containers to cause a surge in transport costs that could fuel inflation and cause shortages of goods across the globe.

China reported 21 new coronavirus cases in the mainland on Wednesday with 15 of them in the vital industrial province of Guangdong where restrictions have been in place for several weeks to contain an outbreak linked to the Delta variant first detected in India.

There are now 150 cases of the variant, mostly in Guangzhou city, and the lockdown has caused the city’s massive port to be severely disrupted. A separate outbreak in neighbouring Shenzhen has also added to the problem. The ports are the third and fifth largest in the world and shipping costs have spiked as a result.

Transporting a 12.2-metre (40ft) steel container by sea from Shanghai to Rotterdam now costs a record $10,522, which is nearly 300% higher than it was last year, according to Drewry Shipping.

Factory costs in China, the workshop of the world, had already risen 9% in May – the most for more than a decade – because of a rapid increase in demand as the global economy reopens and as glitches in supply chains continue to be ironed out.

Photo: A truck drives with a container reading ‘China Shipping’ at the Los Angeles Port in Los Angeles, California, USA. EPA-EFE/ETIENNE LAURENT

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