The ongoing threat of labor strikes at U.S. ports, typhoons in China and China’s upcoming seven-day National Golden Week holiday are set to disrupt the flow of containerized goods from China to the U.S., according to a container trade expert.
“Our regular surveys indicate that demand for U.S.-bound shipments from China remains strong, especially with Golden Week looming,” said Christian Roeloffs, CEO of Hamburg-based online container market platform Container xChange.
“Golden Week, starting Oct. 1, traditionally causes a temporary slowdown in logistics activities across China, with a noticeable dip lasting between seven and 10 days.”
“With these events in combination — the U.S. labor strikes, upcoming Golden Week, and port suspensions — the China-to-U.S. shipping route is set to be volatile and uncertain over the next 20 days,” Roeloffs added.
Chinese factories shut down during National Day Golden Week as its citizens celebrate the founding of the People’s Republic of China.
He noted that an anticipated strike by the International Longshoremen’s Association, which represents 85,000 dockworkers at 12 ports along the East and Gulf coasts, is prompting traders to accelerate their order schedules to avoid disruptions before the strike on Oct. 1.
Read Also: Retailers Plea For Deal: US Ports, Union Start Two-Day Talk In Effort To Prevent Disruptive Strike
Last week, China faced its worst typhoon in 75 years, which made landfall on the east coast. According to container liner Hapag-Lloyd, the storm has caused delays of up to 60 hours at ports in Shanghai and up to 48 hours at ports in Ningbo. Another typhoon is also headed toward the region.
“This bottleneck is expected to worsen as Typhoon Pulasan approaches, potentially exacerbating the already strained situation,” Roeloffs said. “Several ports in Ningbo and Shanghai have announced the suspension of container operations.”
He added that these adverse conditions have not caused port congestion at Chinese ports due to trade volume declining in a tougher economic environment.
“At present, securing containers is not an issue, though this may change as market conditions evolve,” he said.
Price Action: A disruption of China’s exports to the U.S. will impact numerous sectors in the U.S. because they rely heavily on China for the products they need.
Retail, automotive, and semiconductor companies saw gains and losses in Tuesday’s early-afternoon trading.
Retail
- Walmart Inc. WMT rose 0.35% to $80.61.
- Amazon Inc. AMZN declined 0.58% to $192.76.
- Loews Corporation L slipped 0.32% to $78.42.
Automotive
- Ford Motor Company F fell 0.37% to $10.87.
- General Motors Company GM declined 0.42% to $47.84.
- Stellantis N.V. STLA rose 0.55% to $15.53.
Semiconductors
- Taiwan Semiconductor Manufacturing Co. Ltd. NYSE: TSM) went up 3.42% to $180.74.
- Broadcom Inc. AVGO rose 0.91% to $174.51.
- Qualcomm Inc QCOM rose 1.14% to $167.85.
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