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China trade
EconomyGlobal Economy

China shipping backlog leaves factory owners with nowhere to put goods, and prices are rising

  • A month after Shenzhen’s Yantian Port shut down for three weeks, a massive backlog of appliances, commodities and toys sit in storage, waiting to be exported
  • Manufacturers are looking to ship from other Chinese ports, while consumers may inevitably face higher prices in the end

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A three-week shutdown of Shenzhen’s Yantian Port ended a month ago, but now there’s a massive backlog of goods awaiting export. Photo: Martin Chan
Ji Siqi

A month after container shipping operations returned to normal at China’s Yantian Port, factory owners are still feeling the pinch from a debilitating three-week shutdown, with warehouses chock-full of goods awaiting export.

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“While we can see the cargo is moving through the port again, this event is shaping up to be one of the most disruptive of the year,” said Josh Brazil, vice-president of marketing at logistics service provider Project44, in a note earlier this month.

In Guangdong, a major manufacturing province that houses the Yantian International Container Terminal, manufacturers and exporters across various sectors – including large household appliances, commodities and toys – are still facing choke points in the supply chain as they vie for space on the freighters to get their cargo out of the country.

“Everyone’s warehouses are still pretty full now,” said Derrick Tian, who works for a bicycle-assembly factory in Shenzhen that exports bikes to the east coast of the United States. “Our warehouses can’t take in any more bikes, now.”

While since cleared, the Yantian congestion that spanned from late May to mid-June looks to affect the retail supply chain for weeks or even months, with some analysts saying Christmas shipments could be affected by massive backlogs. Located in the Pearl River Delta, the port – responsible for a tenth of China’s foreign container traffic – was forced to close due to a coronavirus outbreak among dockworkers.

Groups such as Project44 anticipate some Christmas presents will be delayed. And consumers may need to brace themselves for potentially more expensive goods in the coming months, as exporters look to pass on additional logistical and transport costs.

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