Weekly Update – 01.04.2022

Weekly Update – 01.04.2022
April 1, 2022 Hannah Marshallsay

The latest lockdown in Shanghai adds further pressure to already disrupted Sea Freight services affected by the recent spike in Covid-19 cases in China. Air Freight services from China are also impacted with flight cancellations.

We’re now seeing the Chinese government using more restrictive measures than any other time since 2020; this is unfortunately causing delays and disruption to the movement of cargo from China to Europe and the UK. 

Shanghai has become the latest hotspot in a nationwide Omicron outbreak that began in early March. In the latest attempt to curb the spike in Covid-19 cases in China, the city of Shanghai was put into a two-stage lockdown last Sunday after recording a new daily record for asymptomatic Covid-19 infections. The Chinese trade hub is on the fifth day of a 10-day lockdown that was to cover the city in two phases, with first the east (Pudong district) and then the west (Puxi district) entering lockdowns of five days each. The first stage lockdown in Pudong, due to end today, has already since been extended in residential areas in efforts to control the continued spread of the virus.

It has been widely reported that businesses and factories have closed in Shanghai, interrupting the manufacturing and the production of goods. Cargo transport has also been suspended this week increasing the pressure on export operations and creating delays to the shipments. 

Other regions of China are still undergoing smaller lockdowns or are affected by precautionary measures which require testing and inspection of truck drivers leaving and re-entering controlled areas. These factors are inevitably slowing the inland transportation of export containers. While ports remain open, 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.

Shanghai

Significant areas are in lockdown with factories closed. The majority of trucking services are suspended. We are seeing a worsening impact on the production and movement of cargo for some of our customers’ shipments.    

Shenzhen

Factories have reopened, trucking services have resumed to normal although subject to testing requirements of truck drivers. The movement of cargo is normalising in this region however some customers may experience delays to shipments of their cargo.  

Xiamen

Some factories remain in lockdown. 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.

Suzhou

There is disruption to land transportation with container trucks from Shanghai not being allowed to enter the Suzhou area. This is leading to delays in the movement of cargo.

Qingdao

Some factories remain in lockdown. 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. Some customers may experience delays to the production and  shipment of their cargo as a consequence.   

Dalian

Trucking capacity has been reduced and road restrictions between Dalian and nearby cities are increasing which we expect will negatively impact trucking operations in the region. Some customers may experience delays to the shipment of their cargo as a consequence.

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. 

Air Freight Impact

The latest lockdown has resulted in the cancellation of freight flights from Shanghai Pudong (PVG) due to the lack of handling staff. There is also a reduction in international passenger flights which will add to the shortage of capacity. The diversion of cargo, along with reduced capacity, is likely to push up air freight rates at alternative airports. The suspension of trucking services in the region will also impede the delivery of goods from factories to airports; all of these factors will unfortunately impact customers’ shipments from China and are likely to incur delays.

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