A LARGE backlog of freight has occurred in China with challenges in how it is now cleared out, according to Verus Global group CEO and director Jackson Meyer.
Mr Meyer was speaking in the context of coronavirus, with the total closer of manufacturers, halting of landside freight transport and delayed international shipping in China contributing to the unprecedented interruption of supply chains and significant global shipping delays.
He said as China returned to work, a significant shortage of containers and immediate shipping capacity issues would be the next major pressure points and a key issue was the large backlog of freight that had been on hold while the country was in lockdown.
“China is the world’s largest container cargo handler, usually processing around 30% of global traffic, or around 715,000 containers a day,” Mr Meyer said.
“Coronavirus has had an enormous impact and caused significant disruption to the entire shipping process for all goods produced in China, including food items, building supplies, machine parts, and technology components.
“Since early February the production and distribution of goods have been delayed or halted across provinces within China creating a bottle neck of outgoing international shipments being held up in slower than usual operation times at ports. Additionally, shipping times from China to Sydney have been extended from their typical 10 days to 14 days, effectively quarantining crews as they travel by sea, but quickly compounding delays on shipping times.”
Mr Meyer said the good news was workers were returning to factories, production was resuming and drivers across China were beginning to return to work. “With a large backlog of shipment orders needing to be filled, as well as the accumulation of new orders, the next challenge will be to process the large influx of goods available for export,” he said.