Update on Disruption to Yantian International Container Terminal Operations in South China (July 12, 2021)

Please find below an update on the latest development in Yantian International Container Terminal (YICT).

Key Facts:

1. At the end of June YICT was back closer to normal operating levels. Yard utilization in week 26 was 65%, and 85% of overall productivity was resumed. Our market information, is that there are now 40,000 TEUs of containers being processed daily. Laden / full container returns still require appointments, however daily gate-in movements have increased greatly.
2. While the situation in YICT is easing, ports within the vicinity including Shekou and Hong Kong are still fully occupied, partly because of the diversion of export volumes from YICT.
3. With port omission earlier, all carriers continue to have issues with providing adequate equipment in the South China area, especially 40′ GP and 40′ HC.

Impact:

1. Even though carriers are continuing to clear the backlogs in YICT, the demand is still on the high side against available capacity. Assume the space availability will still be constrained and ocean freight costs remain high.
2. Equipment shortages are greater than before and shippers are facing a limited time frame between getting equipment and cut-off time, as carriers postpone the equipment release before vessel arrival.