China Warns of More Floods, Extreme Weather After Weeks of Chaos

From August to December, 16 to 18 typhoons are forecast to form in the Northwest Pacific and South China Sea, the Meteorological Administration said Wednesday. Four to six of these are expected to make landfall in China or affect the country.

“Each time a port is forced to close, containers continue to pile up, adding to existing delays,” said Alex Hersham, CEO of digital freight-forwarder Zencargo. “And as this season is expected to be heavier than usual for tropical cyclones, we can expect more delays like this.”

Supply chains have faced a string of bad luck this year. A Covid-19 outbreak among port staff was to blame for a partial closing of Yantian in May, leading to container goods piling up for a month. As ships diverted away from southern China, some factories in the nearby manufacturing hub of Guangdong shut down because of excess inventory that couldn’t be exported, according to analysts and logistics intelligence firm project44.

“The impact of Yantian’s closure was unprecedented on the supply chain because it serves one of the world’s largest manufacturing bases,” said Salmon Aidan Lee, head of polyesters at consultant Wood Mackenzie Ltd. “If we have a few more typhoons that come our way, and knock down production a few days each time, this problem will get worse.”

While the average waiting time for a container to be exported at Yantian has dropped to five days from 25 in June, and operations resumed at the port Wednesday evening, the situation could easily worsen again if weather-related delays at other Chinese ports build up, said Hersham.

Typhoon In-Fa also impacted factory operations in eastern China, while major ports along the Yangtze River, the country’s busiest inland waterway, halted operations last week, the Shanghai Shipping Exchange said in a July 30 note. Torrential rains and flooding have affected flows of commodities like oil and coal, the company said.

The disruptions are driving the cost of shipping a 40-foot box from China to the U.S. to record levels above $10,000, according to maritime consultant Drewry. Ultimately, the snarls will add to inflation, said Lee, who predicts U.S. consumers will have to pay about 20% more for Christmas presents — from toys to furniture.