China's War-Drills Disrupt Container Ship Traffic To Taiwan's Top Ports

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by Tyler Durden
Friday, Aug 05, 2022 - 04:28 PM

As Beijing conducts war drills around Taiwan following a controversial trip to the island by House Speaker Nancy Pelosi, shipping vessels are avoiding Taiwan's top ports, creating what could be delayed export shipments of electronic goods, Bloomberg reported. 

Container ships and other vessels are dropping anchor at sea to avoid China's military exercises around the self-ruled island. This is happening outside the Kaohsiung port in the south of Taiwan, explained Jayendu Krishna, deputy head of consultancy Drewry Maritime Advisors.

"They [vessels] will avoid going to Kaohsiung for the next two to three days, because that's directly in the line of fire," said Krishna. "Some dry bulk ships and tankers have been asked to anchor and wait for orders." 

Meanwhile, Kaohsiung is operating under normal conditions as China is carrying out exercises 15 miles away from the port's entrance, according to the port's vice president, Su Jiann-rong. 

"There has been no impact from the military drills so far," he said, adding that empty piers are available at the port. 

The Taiwan Strait is a key route for supply chains, with almost half of the global container fleet passing through the waterway this year. While vessels are continuing to travel through the strait during the military exercises, they are navigating around the drill zones. 

Some shipowners have barred their vessels from transiting the strait. Two liquefied natural gas suppliers informed ships to not travel through the waterway until they can confirm the military drills have ended, according to traders with knowledge of the matter. 

At least two very large crude carriers en route to Kaohsiung have been diverted to Sha Lung port, at the northern end of the island nation. The supertanker Barakah switched its destination on Aug. 2 from Kaohsiung to Sha Lung, while the VLCC Ghinah also changed its route to avoid the military drill zone. 

Kaohsiung is a major gateway for vessels picking up Taiwanese semiconductor chips, and is also where state-refiner CPC Corp. makes petrochemicals to supply manufacturers around the world, said shipping experts. -Bloomberg 

Drewry's Krishna concluded by saying port call delays at Kaohsiung could eventually affect shipments of electronics to the US.