Yantian Port Congestion: Accessing the Full Supply Chain Impact

A Dun & Bradstreet Outlook On The Domino Effect Of the Yantain Port Congestion And Best Practices For Building Supply Chain Resilience 

Since the 21st of May, Yantian International Container Terminal (YICT), one of the world’s busiest container ports, has enforced strict disinfection and quarantine measures following the discovery of the Coronavirus among port staff. The port which has an annual volume of more than 13 million twenty-foot equivalent units (TEU), reportedly has more than 40 container ships anchored in open water outside the terminal. Serving an estimated 100 ships per week, the ongoing disruption and quarantine measures will have continued implications for global supply chains and is forecast to be even more disruptive than the Ever Given blockage in the Suez Canal earlier this year due to the length of time that the port has been in quarantine.

“This most recent shipping container incident in the port of Yantian reinforces the reality that comes with the interconnectedness of globalization and our reliance of each other as contributors to the global supply chain. As a result, companies have developed a higher level of dependency on suppliers and third parties from other countries, and that dependency is highlighted when a link in the supply chain is impacted. Unlike the Suez Canal which only remained blocked for six days, Yantian’s port has been operating at a reduced capacity for a number of weeks creating further delays on supply chains.

The Yantian port congestion plays as yet another reminder to businesses to invest in data and technology to create an agile, geographically dispersed supply chain that can quickly pivot during unexpected events.”

– Brian Alster, General Manager, Third-Party Risk & Compliance, Dun & Bradstreet

 

IMPACT ON GLOBAL SUPPLY CHAINS:

To provide a view of how the Yantian International Container Terminal will impact supply chains, Dun & Bradstreet’s data and analytics team analysed annual shipping data that tracks the vessels and materials found onboard that travel through the YICT and found:


In Europe:

      • Top countries impacted by reduced capacity at YICT include: the United Kingdom, the Netherlands, Germany, Spain, France, Belgium, Italy, Poland, Sweden, and Denmark.
      • The top 10 materials found in shipments from YICT to Europe include: audiovisual equipment, furniture and bedding, toys and games, mechanical appliances, footwear, clothing, steel, ceramic, metals, and cutlery and related
        metal products.
      • The top 10 industries impacted by these delays include: general retail, food retailers, wholesale trade, apparel, electrical equipment and components, engineering services, industrial and commerical machinery and equipment,
        furniture, building materials and hardware, and construction.
In US/Canada
      • The top 10 materials found on shipments from YICT to the US/Canada include: furniture and bedding, toys and games, audiovisual equipment, mechanical appliances, plastics, steel, metals, textiles, ceramics, and leather
        products.
      • The top 10 industries impacted by these delays include: general retail, furniture, wholesale trade, automotive dealers, apparel, engineering services, industrial and commerical machinery and equipment, building materials and
        hardware, electronic equipment and components, and fabricated metal products.

In the Asia-Pacific:
      • Top countries impacted by reduced capacity at YICT include: Australia, New Zealand, Malaysia, Bangladesh, Vietnam, and South Korea.
      • The top 10 materials found on shipments from YICT to Asia-Pacific nations include: plastics, footwear, audiovisual equipment, apparel, paper and paperboard, furniture, steel, leather, mechnical appliances, and cutlery and related metal products. 
      • The top 10 industries impacted by these delays include: general retail, furniture, wholesale trade, food retailers, electrical equipment and components, building materials and hardware, communications, apparel, construction, and textiles.
      • The top 10 affected supplier industries in China include: wholesale trade, furniture, building materials and hardware, electrical equipment and components, apparel, engineering services, industrial and commerical machinery and equipment, metal products, food retailers, and stone/clay/glass/concrete products.

Methodology:

  • Dun & Bradstreet leverages its Data Cloud of 420M global businesses to identify the global supply chain impact.
  • The data reflects bookings made by companies to ship through YICT during the current disruption period.
  • Materials identified for this report were based on HS Codes.
  • Companies identified for this report were based on SIC and shipper/consignee number, which are also tied to Dun and Bradstreet’s D-U-N-S number.


BEST PRACTICES:

With no concrete view as to when the port will operate again at full capacity, we know that there will be great impact to global supply chains in the weeks and possibly months to come.

The incident identifies the urgency for companies to better understand and manage their global supply chains. Below are both near and long-term best practices to consider:

Near-Term Best Practices:

Assess – Complete an immediate assessment of your suppliers and suppliers’ suppliers to determine the impact to your own supply chain operation.

o How many tier 1 and 2 suppliers do you have in your supply chain that have been negatively impacted by this incident in the region?

o How urgently do you need the goods that are currently backlogged in the region of impact?

Identify – Determine your alternative suppliers in non-impacted regions of the world and engage them to offset the delays of suppliers in the impacted region. Determine:

o How long it will take to onboard them (i.e. do they have the suppliers you need?)

o How quickly will it take for those supplies to reach your location? Will it be faster than waiting for shipments from the impacted regions to reach you?

Longer-Term Best Practices:

  • Strategize – Develop a risk-based assessment process to identify and continuously monitor a variety of risks that could impact the productivity of your supply chain. Create a plan that support a flexible and agile network, regardless of circumstances and unexpected events.
  • Monitor – Continuously monitor your supply chain. Make sure that you are monitoring the risks associated with both your Tier 1 and Tier 2 suppliers to ensure your company has a complete view of the supply chain.
  • Invest – Today’s supply chain leaders are challenged by disparate systems, different data from varying resources and distributed teams and suppliers. Making technology investments today allows companies to better manage supply chain risk – giving them greater transparency into their entire supplier network, including goods in motion and downstream impacts on delays – while also serving up the data and insight needed to make informed decisions, particularly during unexpected events.