As Shenzhen Lockdown Ends Other Regions are Hit By New Covid Restrictions

Monday 21/03/2022

China’s tech hub city of Shenzhen resumed normal work and production today after a seven-day lockdown, but it could take weeks for cargo flows to recover.

Following three rounds of testing, deputy secretary general of the Shenzhen municipal government Huang Qiang said that Covid-19 prevention in the city was “under control”.

Ocean carriers that experienced a flood of booking cancellations for sailings from Yantian are now hoping their prospects at the port will improve in the coming weeks, but there are new concerns about Covid flare-ups in other regions impacting supply chains.

Maersk said today it was “closely monitoring the situation in China” and the impact of the government’s strict border controls, extensive testing and lockdowns on the supply chain.

“While the current numbers remain low compared with countries elsewhere, China is increasing its efforts to mitigate the situation. The more-than 7,000 cases that have been registered in the first two weeks of March make this the worst Covid flare-up in the country since the start of the pandemic, two years ago,” said Maersk.

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And with more lockdowns in Chinese cities likely in the coming weeks, as the nation pursues its policy of Covid-19 zero-tolerance, the disruption to trucking and container depots is causing considerable delays to orders getting onto the quay for shipment.

Indeed, China’s largest city, Shanghai, today shut schools and public parks, with people told to work from home, because of a surge in new infections.

Data and analysis from a supply chain visibility platform shows ocean load volumes through the port of Yantian have plunged by 43% since the beginning of March, despite the terminals staying open during the lockdown.

“We’re seeing a trend of sharply declining volumes, not just in the last week as the city went into full lockdown, but over the past three weeks as authorities there have taken measures to stop the spread of Covid-19 in the latest outbreak,” said the platform.

It said some suppliers had moved to other ports and paid the price of additional haulage, but most had decided to wait-out the lockdown because it was increasingly difficult to predict where the next Covid flare-up would occur.

Meanwhile, ocean carriers are assessing the impact on the use of their vessels and are looking at holding ships or blanking sailings until they can see an opportunity to achieve full load factors.

A carrier source said today the situation was “changing by the hour”, and he had “no idea” how today’s pro-forma schedule would look.

“It doesn’t make sense to sail a ship three-quarters full from China when there is so much cargo in the pipeline, so I think we will just have to wait it out and hope the warehouses and trucking get going again quickly,” he added.

Information sourced from here