The recent closure of Shanghai and Ningbo ports due to Typhoon Chanthu may create delays that disrupt more than US$14 billion of trade flows, according to scenario analysis conducted by Russell Group, a risk modelling company.
Further analysis shows that the commodities of clothing (US$331 million is exported from Shanghai) and computers / office equipment (US$361 million) will face severe disruption and could affect the availability of key clothing items or electronic goods in the run-up to the holiday season.
Russell’s analysis was based on a port closure at both Shanghai and Ningbo from 12 September to 26 September, based on 2020 figures.
The full breakdown of the trade between Shanghai and Ningbo is shown below:
Shanghai
1. Imports – US$4.1 billion
2. Exports – US$3.4 billion
3. Total – US$7.5 billion
4. Top Commodity / Clothing – US$331 million
Ningbo
1. Imports – US$5.7 billion
2. Exports – US$3.4 billion
3. Total – US$7.5 billion
4. Top Commodity (Computers / Office Equipment) – US361 million
“Our analysis will come as little relief for corporate risk managers, their organisations’ supply chains, ship operators and (re)insurers that have seen disruption after disruption pile on top of each in 2021,” commented Russell Group CEO, Suki Basi.
“Rising port accumulation exposures across the global economy is a serious concern for businesses that rely on just in time supply chain methods. In this quarter alone Ningbo has been closed twice and the first incident created havoc to the logistics of global trade,” explained Suki Basi, who pointed out that he would not be surprised if it happens again.
