Ningbo’s heightened COVID-19 restrictions could hit GoPlus, Dollarama — Panjiva
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Ningbo’s heightened COVID-19 restrictions could hit GoPlus, Dollarama

China 2918 Cons. Discr. - Autos 1125 Cons. Discr. - Retailing 426 Coronavirus 511 Corp - Ports 861 Mode - Containerized 1430 Mode - Seaborne 1765 U.S. 5260

China has increased restrictions around the port of Ningbo as a response to outbreaks of COVID-19 in the surrounding city, Splash247 reports, adding difficulty to shipping operations in three out of the five container terminals. An advisory from Maersk elaborates on the closures, noting that the restrictions are around entry and exit of inland logistics, and that unloading and loading operations are proceeding as normal. The outbreak is centered around factories in the nearby Beilun District and could foreshadow supply issues for companies in the area. Impacts from COVID are likely to be felt up stream as well, with many feeder operators cancelling trips to allow workers to quarantine before the lunar new year holiday, a popular time to travel in China.

The impact to global trade will be dependent on the length and severity of the restrictions, as well as interactions with the lunar new year holiday. One outcome may be an effectively extended holiday which may give carriers the time to flush capacity out of their networks but could be disruptive to companies who planned for the holiday as normal. An extended break in production could also promote additional inflation and congestion as companies look to purchase goods from the region in the spring.

Panjiva’s U.S. seaborne import data shows that imports loaded in the port of Ningbo made up 19.2% of Chinese volumes in the first 11 months of 2021, or 7.6% of total U.S. imports in the same period. This puts the port below others in China like Yantian, accounting for 10.7% of U.S. imports, and nearby Shanghai, 10.4% of U.S. imports, but any reductions in throughput in an already strained system could be hard for other ports to pick up.

Ningbo is also significant because it represents one of the largest growing ports in China. U.S. import volumes from Ningbo in Q3, a critical shipping time, increased by 40.0% year over year in 2021 when compared to 2019. The increase shows that the port was able to capture additional busines as U.S. imports surged. Yantian and Shanghai showed slower, but still strong growth, up 11.7% and 14.0% year over year in the same period.

Ningbo soars after U.S. lockdowns

Chart shows U.S. seaborne imports loaded in Ningbo, Yantian, and Shanghai, and from China as a whole on a monthly basis, indexed to January 2016. Source: Panjiva

Panjiva data also shows which companies received goods from the affected area, with imports associated with GoPlus and Dollarama from a 50km circle centered on the Beilun district totaling 2,226 and 6,037 TEU in the first 11 months of 2021. These companies have likely already faced supply chain pressures, as imports associated with the firms fell by 53.7% and 6.6% year over year in October and November combined.

Advanced Innovative Manufacturing, who mainly imports auto parts may have more trouble. Imports from the area associated with the company totaled 4,609 TEU in the first 11 month of 2021 and increased by 50.3% year over year in October and November. This is up from 7.5% year over year in Q3 but may face headwinds from the new restrictions.

Advanced may face challenge from port restrictions

Chart shows imports from an area 50km from the Beilun District of Ningbo. Source: Panjiva

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