Beijing intervenes to try and keep goods flowing

Source: Splash247; Aircargo News
Date: 12th April 2022

Some residents of Shanghai stepped out of their homes for the first time in more than two weeks today, as the city took tentative steps towards easing a Covid-19 lockdown.

The city has classed residential units into three risk categories, to allow those in areas without positive cases for a stretch of two weeks to engage in “appropriate activity” in their neighborhoods.

Nevertheless, the limited reopening – with estimates suggesting less than a third of the population are allowed out in very limited conditions – is unlikely to ease the shipping backlog mounting at the city’s ports and across swathes of China’s coastline.

As of April 7 import container dwell times at the port of Shanghai had reached eight days, a 74% increase, since the March 28 start of the lockdown according to data. Trucks’ limited access into the port, import shipment numbers rising, and lack of rail freight assets, are all contributing reasons.

Nomura estimates that as many as 45 cities in China are now implementing either full or partial lockdowns, making up 26.4% of the country’s population and 40.3% of its GDP.

Jiangsu Province is home to many electronics and automotive manufacturing operations. Kunshan and part of Taicang are now locked down and many other cities in East China are also being greatly impacted by the pandemic.

Beijing yesterday ordered all provincial-level governments to keep airports, harbours and highways open so that transport and logistics links can be maintained amid strict anti-pandemic controls.

Local authorities must not erect roadblocks or put healthy truck drivers into quarantine either, the State Council – China’s cabinet – said on Monday evening, amid plenty of reports of highway blocks and limited trucking availability.

It is not just the container side of shipping feeing the brunt of the Shanghai lockdown. There were 222 bulkers waiting off Shanghai as of April 11, 15% higher than a month earlier, according to Bloomberg shipping data.

Shanghai’s big shipyards have also called force majeure on their many ongoing newbuild projects, meaning ship delivery times will likely be pushed back.

No doubt, China’s strict zero-Covid policy has kept a lid on economic growth and affected the whole supply chain from construction to industrial production and over to mining activities and inland transportation, not to mention port handling.

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