Dalian pulls the plug on reefer imports as meat demand soars

The port of Dalian, China, has had to stop accepting deliveries of refrigerated containerized freight as it has run out of port-side plugs to ensure the units stay powered, Hapag-Lloyd AG has stated. The container-line will divert to Qingdao or Tianjin initially, with fallbacks at other Chinese ports and even South Korea.

The lack of availability of plugs has been a common issue in 2020, as flagged in Panjiva's research of July 20, 2020, as a result of the combined disruptions caused by the coronavirus pandemic as well as soaring Chinese demand for agricultural products. The latter has been driven in particular by the U.S. under the phase one trade deal, which is likely to remain in place under the Biden administration.

Fortunately, Panjiva's data shows that Dalian only represented 3.2% of U.S. seaborne exports of meat, dairy, fish, fruit and vegetable products to China in 2020, lagging well behind the 32.9% accounted for by Shanghai and 18.7% represented by Qingdao. The growth in shipments to Dalian has also lagged the broader U.S. export surge with an expansion of 3.0% year over year in the fourth quarter, while shipments to Shanghai jumped 155.3% and total shipments increased 74.4%.

Shipments of refrigerated products from the U.S. to Dalian have been dominated in the past by shipments of fish, which accounted for 87.1% of the total in 2019. That changed in 2020 with shipments of meat having surged 281% higher year over year in the fourth quarter, while shipments of fish fell 24.1% in the same period.

No matter the mix of products though, the diversions necessitated by the shortage of plugs at the port will disrupt shipments for importers to Dalian such as WH Group Ltd.'s meat specialist Smithfield and Marubeni Corp.'s North Pacific seafoods.

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.