On August 9^th at 1:40 pm local time, a large explosion occurred on the ship YM Mobility, owned by Taiwanese company Yang Ming Marine Transport, docked at Ningbo Port’s Beilun Terminal.

The Port of Ningbo (port code: CNNGB) is located on the east coast of Zhejiang. Ningbo Port is the world’s third-busiest container port by volume of shipments behind the ports of Shanghai and Singapore. As a result of this explosion, Ningbo Port closed for almost three days and is now steadily resuming full services.

Surveillance videos posted online by state broadcaster CCTV and videos captured by locals showed a smoking ship followed by a fireball that engulfed containers stacked three-high and sent debris high above the port. Luckily, no injuries occurred as a result of this explosion, and the ship’s crew and port staff were all accounted for without injury.

According to the Zhejiang Province Emergency Management Administration, the explosion occurred in a container holding Class 5 Hazardous materials. The specific contents have not been shared but are believed to be lithium batteries and the organic compound tert-butyl peroxybenzoate, which must be stored in temperatures not exceeding 30 degrees Celsius. The items were reportedly held in a reefer container that is designed for goods that need to be temperature controlled during shipping. It is likely that a local heat wave contributed to the explosion.

The Supply Chain Impact

Dwell times, or the amount of time spent at port, of up to nine days at the Ningbo Port were already being reported prior to the explosion, according to Worldwide Logistics Group. Although the explosion did not severely affect vessel and container handling operations at the port long-term, due to the 60-hour shut down, berthing schedules will have to be adjusted as the terminal resumes full operations.

Longer dwell times and increased congestion are expected not only at Ningbo but nearby ports as well where traffic is being redirected, including Shanghai and Qingdao, where congestion was already high.

The Ningbo incident is unlikely to have a significant impact on the wider container shipping market and ocean freight rates, but shippers using lanes from East China ports will experience increased delays. Shippers of hazardous and dangerous goods may also see a short-term reduction in available containers.

General Trends in Shipping Congestion

The shutdown of Ningbo Port came at a crucial time for North American imports as expected August forecasts are a high, as shippers rush to get holiday merchandise ahead of expected supply chain disruptions coming in the fall.

There is risk of US port slowdowns ahead of potential labor actions at East Coast and Gulf Coast ports this fall. The contract between the International Longshoremen’s Association and the United States Maritime Alliance expires on Sept. 30^th and negotiations have stalled.

So far in 2024, global schedule reliability has largely been within 50-55%, a significant decrease from the improvements seen in 2023. The average delay for LATE vessel arrivals also deteriorated, increasing to 5.19 days. At this time, 2024 has seen the worst reliability and highest delays since the recovery from the pandemic shipping crisis, far below the 75-85% reliability seen pre-pandemic.

Supply Chain Risk Assessment

The pressures for supply chain systems are increasing, and our industry-focused supply chain consulting services are designed to help you meet these demands. Not sure where to get started? Take our Supply Chain Resiliency Assessment to check your readiness for future disruptions, or get in touch with our supply chain experts directly.

Coauthor and contributions by Corinna Lynch