Weekly Update – 25.03.2022

Weekly Update – 25.03.2022
March 25, 2022 Hannah Marshallsay

The impact of recent Covid-19 outbreaks in China continue to disrupt the market with Sea Freight services affected by Government imposed restrictions to manage rising infection rates.

Sea Freight services are being impacted by regional Covid-19 lockdowns with the Omicron variant continuing to spread. China has persisted with its zero-Covid strategy, imposing restrictions which have had a detrimental impact on the movement of cargo in areas affected. 

Recent lockdowns in many areas have added increased pressure on transport and export operations. While the lockdown in Shenzhen has now been lifted allowing factories to re-open in the region, transport operations are still to return fully to normal. Other smaller areas in Xiamen, Qingdao and Tianjin remain in lockdown with factory closures still in place which is creating delays to the production and shipment of goods in those areas. 

Despite lockdowns easing, most regions of China are still affected by precautionary measures which require testing and inspection of truck drivers leaving and re-entering controlled areas which is inevitably slowing the inland transportation of export containers. The potential impact of the decrease in productivity of transportation services is congestion at ports building once again due to delays in container pick-up and delivery having a knock-on effect on yard productivity.

The situation and level of Covid-19 disruption varies from region to region, below is a summary of the key areas that are currently being impacted.

Shenzhen

Factories have reopened, trucking services have resumed to 80% in most areas near Shenzhen but testing requirements of truck drivers are causing delays. As such, we are seeing an impact on the movement of cargo for some of our customers’ shipments.  

Xiamen

Some areas are in lockdown with factories closed. Testing requirements on truck drivers are causing delays to the inland transportation of export containers. Some customers may experience delays to the production and shipment of their cargo as a consequence.

Shanghai

Factories have reopened but testing requirements on truck drivers remain in place and are causing delays to the inland transportation of export containers. Some customers may experience delays to the shipment of their cargo as a consequence.

Qingdao

Some areas are in lockdown with factories closed. Testing requirements on truck drivers are causing delays to the inland transportation of export containers. Some customers may experience delays to the production and shipment of their cargo as a consequence.

Tianjin

Some areas are in lockdown with factories closed. Testing requirements on truck drivers are causing delays to the inland transportation of export containers. As such, we are seeing a worsening impact on the production and movement of cargo for some of our customers’ shipments.  

Dalian

Trucking capacity has been reduced by 30% and road restrictions between Dalian and nearby cities are increasing which we expect will negatively impact trucking operations in the region. As such, we are seeing a worsening impact on the movement of cargo for some of our customers’ shipments. 

The knock-on disruption at ports may lead to carriers changing vessel rotations at short notice to avoid ports that become badly impacted. Regrettably we expect that there will be difficulties with the movement of cargo and shipments from China over the coming weeks. 

PFE is committed to providing transparency of the ongoing condition of the market so that customers are fully aware of the current situation. Our teams will contact you if your shipment becomes affected by these issues.

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