Stuck Fertilizer Box Shows Global Supply Chain Crisis | International
Somewhere in the world’s busiest port of Shanghai, a container of fertilizer sits among tens of thousands of boxes, waiting for a ride to the United States. He’s been on the dock for months, trapped by typhoons and COVID-19 outbreaks that have deepened congestion in the global supply chain network.
While fertilizers have been stranded there since May, the port is just one stop on the long journey between central China and the US Midwest. The delays lengthened a delivery that would normally take weeks to over six months. And that time will continue to grow, as cargo has barely started the approximately 15,000 kilometer (9,300 mile) hike.
It is the story of a humble expedition and its arduous journey around the world. While some of the obstacles preventing it from its final destination may be specific to this particular case, the journey is emblematic of the inertia that gripped global trade during the pandemic.
From the United States to Sudan to China, container boxes are found in ports, train stations and warehouses as the pandemic rages on. In an industry with 25 million containers and 6,000 ships carrying them, it’s easy to see disruption as a big puzzle confined to the world of shipping. But every container that is delayed is economic activity that is restricted, piling costs one box at a time on consumers and making it harder to put corn on consumers’ tables or deliver holiday gifts.
It is also a lesson in the spillover effects on global supply chains, showing the limits of diversification as all networks are still closely linked to China.
“All roads lead to China, and this has a major effect on the entire supply chain,” said Dawn Tiura, head of the US-based Sourcing Industry Group. “Congestion in a port or factory has far-reaching implications for nearby facilities, which reverberate around the world. “
The journey for our particular box of sandy looking ammonium phosphate began in February. It was then that, in the heart of the agricultural hub of the American Midwest, a supplier to farmers in Illinois placed an order for eight containers full of fertilizer from factories in central China.
Before the pandemic, a batch like this typically arrived in Chicago in April, just in time for growers to use it during the planting season, said Steve Kranig, director of logistics at IM-EX Global Inc. , which is responsible for coordinating the transport for the fertilizer cargo.
But as of May, some of the fertilizer was still in Chongqing, 2,400 kilometers west of Shanghai, where it was manufactured. The culprit: a shortage of empty containers for transport. The crucial return of these steel crates from trips to the United States and Europe has been delayed by everything from understaffing to lack of trucking equipment to move cargo out of ports.
It took months for Kranig to secure boxes and places on several ships leaving Shanghai. The fertilizer was loaded into the containers, and they were taken to barges on the Yangtze River.
The trip on China’s busiest waterway lasted eight days. This container was lucky because it was shipped before the typhoon season. Others haven’t been so lucky recently.
Traffic on the Yangtze, which saw a record 2.93 billion tonnes of cargo in 2019, was battered by waves of extreme weather conditions that swept through China this summer. Authorities have had to shut off the river during storms, creating serious delays at Chinese ports as ships wait days for passage to resume.
Although the cargo avoided any flooding, it could not escape high transit costs as freight rates skyrocketed on international routes as well as along the Yangtze. In addition to the strong demand for goods as the Chinese economy rebounds, the scarcity of ships is pushing prices up. Shipping companies are withdrawing small coastal vessels for use on long-haul routes like China’s lucrative Trans-Pacific to the United States
“There is already a limited amount of containers traveling the Yangtze River route, and some companies are paying top dollar to take all available containers so they don’t have to try to move their things to Shanghai via highways. non-riverine, ”Kranig said.
The container finally arrived in Shanghai on May 27, and a truck delivered it to the world’s busiest port.
Kranig isn’t sure why the container is still stuck in Shanghai after seven more boxes from the shipment have been on its way to Chicago, but he suspects the chaos that has hit Chinese ports is a major factor. The pandemic has disrupted shipping over the past year and a half, with China becoming a major choke point.
The port of Yantian in Shenzhen was closed in May due to an outbreak of COVID-19, creating congestion across the east coast, which in turn had ripple effects across the chain. global supply. Earlier this month, shipments also had to be redirected away from Ningbo, the third busiest container port in the world, after an employee tested positive for Covid.
Typhoons and extreme weather conditions made matters worse. In July, the stranded container weathered Typhoon In-Fa, shutting down Shanghai and other nearby ports for about four days.
Delays could reach an all-time high in the coming weeks if the trend continues, said Glenn Koepke, senior vice president at FourKites Inc., a provider of supply chain information.
For now, the unlucky box of fertilizer remains stuck among the harbor stacks, buried like the crate in the final scene of Raiders of the Lost Ark.
Once the fertilizer finally arrives in the United States, the risks are not ruled out. The Pacific can be a perilous crossing for captains of ships racing to meet deadlines. And when the cargo arrives safely on the North American coast, other headaches await.
The United States’ largest trade gateway to Asia has been clogged with the most inbound container ships in more than six months. Earlier this month, 35 ships were anchored awaiting a berth outside the twin ports of Los Angeles and Long Beach. Due to the safeguard, many ships are diverted to Vancouver.
Then comes the journey inland. It could take another one to three months for the container to travel from a west coast port to Chicago by train or truck.
The stranded container case seems to be the worst nightmare for anyone involved in global trade. But Kranig is back for another round of orders – eight more containers to be transported from China to the United States
The pattern of delays is repeating itself. Again, there were no empty boxes in Chongqing, so Kranig decided to skip the river route – he loaded the fertilizer in the form of loose sand into open trucks which were driven to a warehouse in Shanghai. The cargo was packed in containers, with some being brought to Ningbo this month. Then came the news that part of the Ningbo port had been closed because of a worker infected with coronavirus.