Following an increase in COVID-19 cases in China, Shanghai will go into a new two-stage lockdown, as it was announced on Sunday, creating concerns over supply chain disruption.
As it was informed, there will be two phases for this lockdown during which there will be conducted a mass testing procedure. The first phase includes the Pudong financial district and areas east of the Huangpu river from 28 March to 1 April, and the second phase concerns the west of the Huangpu river that will be in a lockdown between April 1 and 5.
Accordingly, all residents will not be able to leave their homes. The public transport will be suspended and only private cars will be allowed to make just the necessary journeys. The congestion at the port which is already high, is expected to increase even more in the coming days.
What is more, all firms and factories will suspend production since people will be working from home. There is an exception for those who those involved in essential services and food supply.
According to Shanghai International Port Group, during this lockdown, the port will ensure normal operations and will provide 24h services at its all port production units. Nevertheless, landside infrastructure and transport links are expected to be disrupted.
Under the new lockdown rules, all container truck drivers must provide a negative COVID-19 test result taken in the last 48h.
Several logistics companies said that they had suspended logistics-related operation and will not accepting cargoes during the lockdown.
There is significant disruption to truck movements already, particularly from neighbouring provinces with trucks being forced to turn back on their way to Shanghai port, leaving a large part of the cargo ready for loading today unable to be transported to the port
…said logistics solutions provider Woodlands Group, noting also that “While some FCL trucks are still running within Shanghai, LTL trucks are not allowed to enter Pudong. As a result, there will likely be a significant impact on LCL cargo.”
If this is widespread it will mean demand slow-down in the short term and downwards spot rate pressure, followed by a surge and upwards pressure
…Lars Jensen, CEO of consultancy Vespucci Maritime, stated on his LinkedIn profile.
Recently, there have been many concerns over this topic, with China announcing sweeping new lockdowns. It goes without saying that lockdowns will impact manufacturing and other sectors even if the ports continue to operate normally.
For this reason, the Predictive Maritime Intelligence company, Windward, had released its insights on how Shenzhen ports locking down might affect the supply chain.
