The global trade landscape has always been delicate, with recent incidents like the Red Sea crisis and the Baltimore bridge accident adding to the complexities. The sudden closure of China’s Ningbo Port due to a container explosion on the YM Mobility was initially perceived as a major disruption, but the swift reopening of the port within 80 hours has mitigated some of the expected consequences.

Read also: Essential Measures for Minimizing Disruption Amid Ningbo Port Closure

While the closure of Ningbo Port, which handles nearly 29% of China’s total vessel traffic, initially appeared to be a seismic event in global trade, the quick resolution limited the implications. However, some impacts on supply chains were felt during the brief shutdown.

The strategic importance of Ningbo Port

Ningbo Port remains a key player in global logistics, facilitating the movement of goods between the Far East and major global markets like Europe and the United States. 

In 2023, Ningbo managed around 33.35 million TEUs (twenty-foot equivalent units), underscoring its essential role in international trade.

The temporary halt in Ningbo’s operations had immediate effects, particularly in terms of delays and logistical challenges. 

Rising costs and delays: The immediate fallout

Although the port was reopened within a short timeframe, the brief closure triggered disruptions across global trade routes. While the China-Europe corridor was initially expected to bear the brunt, trans-Pacific routes also experienced some variability in transit times. Notably, transit times from North America to China saw fluctuations during this period.

West Coast transit times increased from 25 days in September 2023 to 33 days by July 2024. On the East Coast, transit times rose from 45 days in September 2023 to 48 days by July 2024.

These delays, though relatively short-lived, highlight the vulnerabilities in global supply chains and underscore the importance of strategic planning to mitigate such disruptions.

Given these shifts, the key question is: How should businesses adapt their strategies to manage these increased delays and maintain supply chain efficiency?

The domino effect: How Shanghai is coping

With Ningbo out of action, the pressure on neighboring ports, particularly Shanghai, has intensified. Shanghai, which is responsible for nearly 43% of China’s total freight volumes, is now facing unprecedented congestion. Over the past year, congestion at Shanghai has been increasing, and with the added load from Ningbo, delays are expected to escalate further. This situation presents a significant bottleneck in global supply chains.

The challenge now is how to manage these bottlenecks while maintaining supply chain efficiency and reliability.

Qingdao’s role: A viable alternative

Amidst these challenges, Qingdao Port has emerged as a critical alternative. Handling 23.7 million TEUs in 2023, Qingdao recently expanded its capacity by 20%, positioning itself to handle Ningbo’s overflow. This isn’t just about absorbing extra traffic—it’s about ensuring the stability and continuity of global trade.

Leveraging Qingdao’s increased capacity 

Businesses can mitigate disruption risks by shifting their logistics to Qingdao; by utilizing its expanded capacity and strategic location, they can maintain continuity in their supply chains and reduce transit delays.

Preparing for what’s next

While the Ningbo port incident did not have as severe an impact as initially expected, it serves as a reminder of the fragility of global supply chains. Businesses must continue to focus on diversifying their logistics strategies, embracing innovation and building stronger networks to navigate potential disruptions.

Although Ningbo’s swift reopening limited the immediate fallout, the event reinforced the need for long-term strategic planning in supply chain management. By integrating advanced technologies like automation and real-time tracking, and by fostering strong partnerships, companies can better prepare for and adapt to future challenges.

Gautam Prem Jain is CEO at GoComet, a logistics resource management software platform that helps large enterprises transform their supply chain operations.