Shanghai Covid Lockdown “will have a global impact on almost every trade”

A spate of lockdowns in Shanghai and other Chinese cities is piling severe pressure on transportation and logistics across the country, exacerbating the economic fallout of the government’s commitment to its zero-Covid policies as cases continue to soar to record levels. The disruption has affected the trucking industry, which plays a critical role in transporting goods between cities and to some of the world’s biggest ports but is now subject to severe restrictions on drivers and deliveries to locations with positive cases.

Apart from domestic disruption, analysts warned that any inland logistical bottlenecks would eventually result in ocean shipping delays because of the build-up in goods and orders. Once Shanghai reopens, it’s déjà vu of the story we’ve seen so many times, there will be a surge of volumes and upwards pressure on spot rates. The most recent global supply chain data shows that Asia to Europe Ex-Shanghai is down 70% and Asia to Transpacific exports are down 40% due to the ensuing factory closures and trucker shortages.

China Shifts its Focus to Beijing

The Port of Shanghai is the world’s largest port based on cargo throughput and accounts for approximately 20% of China’s exports. Although the port and nearby airports have largely remained open, the slowdown in trucks being unloaded is causing backlog ripples beyond Shanghai. China is also focusing on cases in Beijing where multiple new cases have been reported. The local government has ordered mass testing in 10 out of 17 districts in Beijing.

Contact FMi Logistics today for more details or if you’re looking for solutions shipping your international freight.

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