The current congestion of international ports, particularly in South-East Asia, means that many cargo ships remain anchored offshore while waiting to be able to return and this situation should continue in 2022. Located at the gateway to the Pearl River Delta, Hong Kong is one of the busiest cargo ports in China and the world, along with Ningbo, Guangzhou and Shenzhen. Only 1,358 cargo ships anchored in the port of Hong Kong in September, the latest month for which data are available.
This is one of the lowest numbers in history. Before the pandemic, the number of cargo ship arrivals at the port of Hong Kong was almost twice as high. Expressed in tonnage, the figure is also striking. In September, the port of Hong Kong received 17.8 million tonnes of cargo. This is the lowest figure since 2000. The graph below shows the data expressed as a moving sum over twelve months. Congestion and bottlenecks in container sea freight account for these poor figures. The bottlenecks are the result of production shortages and the impact of the policy to fight the Covid pandemic in China. This strict policy will continue at least until the 2022 Olympic Winter Games in Beijing.
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According to our estimates, closing strategic ports for a month causes bottlenecks that take between six and eight weeks to resolve. This is what happened when Chinese authorities closed the port of Yantian last June due to the presence of Covid cases. Natural disasters can also make the situation worse. In mid-October, Typhoon Kompasu dispersed ships that had anchored off Hong Kong for several days.
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Port congestion will weigh on the economic recovery in 2022 and fuel inflationary pressures. We believe central banks will be forced to raise their key rates much faster than expected next year to tackle stubborn inflationary pressures. The Federal Reserve and the European Central Bank are on the front line.
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