Meishan Terminal resumption to help ease congestion fears


PORT operators believe the port operations will stabilise within one month after the Meishan Terminal at China’s Ningbo port resumed operation after shutting down for two weeks due to Covid-19 infections.

Port Klang Authority GM Capt K Subramaniam (picture) said even though the terminal was only shut for a short period, it will likely take a while for the congestion to ease.

He stressed it would not impact goods movement from Malaysia compared to previous shutdowns when China implemented a lockdown last year.

“There might be a couple of days delay at Ningbo Port but otherwise it will not drastically be affected. On freight rate, I don’t think it will be affected because it depends on the availability of vessels.

“This is not a serious situation as it involves only one terminal, cargo can be accepted at other terminals. I don’t think shipping is disrupted,” he told The Malaysian Reserve (TMR) recently.

This was the second closure of a part of a major port in China this year due to a Covid-19 outbreak, after the month-long shutdown of Yantian Port from late May.

The Meishan Terminal has resumed partial vessel operations since Aug 18 and is expected to see a gradual return to full operations in the coming weeks.

Straits Energy Resources Bhd group MD Datuk Seri Ron Ho said the outbreak of Covid-19 in Southern China has caused congestion at the region’s ports, causing shipping firms to avoid its path or diverting to others.

“This has led to a pileup of delays and rise in costs, which is similar to what we see happening in Malaysia.

“The disruption to the supply chain is expected to affect all parties from the manufacturer to the end-users, as the cost of shipping from China and South-East Asia to the east coast of the US hit record highs.

“The impact from this is likely to be felt for several more months,” he told TMR.

He said the large congestion at ports currently will impact both imports and exports.

“The increase in delays and costs will affect the whole supply chain globally and this will most likely impact the end-user as well,” he said.

He added there have been no new ship buildings for the past two years due to the pandemic and the recent closures in China as well as other parts of Asia will not help the case.

“Based on these factors, the rise in commodity prices and freight rates, as well as delays, are not expected to ease until the second quarter of next year.

“Freight rates are expected to be high for the rest of the year — most likely until Christmas or Chinese New Year,” he added.

He said Malaysia has its own hurdles to overcome as different ports here have different standard operating procedures (SOPs).

“Labuan for example, where we are operating and managing the Labuan Liberty Terminal, has enforced unfair new SOPs requirements which are causing shipping firms and related major economic sectors to curtail or completely cease operations on the island.

“Currently, the rules and regulations are determined by individual states, but we desperately need the authorities to communicate with its stakeholders to create efficient SOPs based on each state’s performance in managing the pandemic,” he said.