DSV Market update China COVID update 31.03.2022
Another event with significant consequences to the industry has taken place: the closure of Shenzhen, partial closure of Shanghai and Qingdao and its surrounding areas the government is implementing temporary local lock down policy based on epidemic situation.
The lockdown will be carried out in two phases:
From 1 April to 5 April, the western side of Shanghai (Puxi) will enter lockdown
The impact of the Shanghai lock-down due to Covid remains shrouded in uncertainty but the impact is going to create significant ripples in the supply chain in the coming weeks and months.
Ocean freight; Terminal and port operations are partially working Yangshan container port is operating at half capacity due to Covid restrictions. The Yangshan port operate a closed-loop protocol where the workers are divided in two teams and have to live in a sealed-off area at the port, trucking operations are extremely slow, so cargo is not moving on top that many factories are closed and cargo originated in other regions can’t access Shanghai. We have reached the all time high global port congestion, despite congestion in the US is going down, now we see queue of vessels in North Asia and Europe growing.
Airfreight: Chinese carriers have already suspended the international and also domestic passenger flights to Shanghai. On Tuesday only 28 flights took off from Shanghai Airport compared to 892 on a typical day in 2021. Additionally, air freight is expected to stop altogether by today as haulage trucks are barred from approaching the airport to load or discharge cargo. Most of the airlines have cancelled services in Shanghai Pudong airport
Alternatives: We recommend to divert cargo to Ningbo port for ocean and for Airfreight use Hangzhou airport.