Shanghai is entering its third week on lockdown, while supply chains are feeling the impact of China’s zero-covid policy with trucking capacity cut and many factories and warehouses closed.
Following the strict imposed lockdown in Shanghai, many people across China start to pack supplies in their homes, in preparation for any potential new COVID-19 lockdown.
Even in the beginning of China’s decision, many industry stakeholders expressed their concerns over supply chain disruption. In the meantime, the congestion at the city’s port increased heavily since early March.
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It should come as no surprise that many countries have criticized China’s reaction towards the omicron variant wave, trying to follow a strict zero-covid policy. Shanghai is currently entering its third week in a row today, while mass testing procedures are already underway at the Guangzhou port.
As informed, Shanghai has classed residential units into 3 risk categories in order to allow the unites without positive cases to engage in some activities in their neighborhoods. Supply chains are already feeling the impact of the Shanghai lockdown with trucking capacity cut and many factories and warehouses closed.
These factors have a major impact on import cargo that suffer drastically slower pick up time and therefore excessively stretched dwell time
…CMA CGM said on Friday, noting also that there is a great impact on trucking movements velocity and available trucking.
What is more, carriers said that reefer cargo, and some types of dangerous cargo, will be discharged at other locations as Shanghai has run out of available reefer plugs and space for certain types of DG cargo. For example, Maersk, Danish carrier, announced plans to omit calls to Shanghai from this week.
To remind, Maersk has said that Shanghai lockdown will have a great impact on trucking services and will increase transport costs.
If Shanghai remains closed for an extended period, then carriers will respond with large- scale blank sailings. This could possibly lead to a peak season supply shortage, coinciding with a release of built-up Shanghai volumes, which could push rates to new records
…Sea-Intelligence suggested.
