COVID-19 cases continue to spread throughout main cities in China, causing further concern about the affects to the supply chain. As the flow of goods remains challenging, anxieties are not limited to simply the status of ports and surrounding infrastructure, but also on the labor force and sourcing of raw materials that make production possible.
Despite entering our eighth week since the first reports from Shenzhen & Shanghai emerged, clarity on the true nature and disruptive effects of the lockdown, remains difficult to obtain. Below are current regional overviews of the situation.
Shenzhen/Pearl River Delta
After a weeklong shutdown on March, 14, which did spread to surrounding manufacturing centers like Dongguan and Huizhou, most of the area was re-opened and has remained that way.
Yantian Port and Shenzhen warehouses have quickly recovered from the initial lockdowns and are flowing at this time. However, the situation in Shanghai is causing an empty container shortage throughout Chinese ports, which is the only current source of disruption in Yantian.
Shanghai has been under, widely reported, strict lockdown measures since mid-March and with only some exceptions, these lockdowns remain in place.
Yangshan and Waigaoqiao terminals remain open to operation, but have limited man power to handle containers. Further, trucking restrictions continue to make it difficult for shippers to move containers in and out of the terminals, reducing the flow. Some estimates in recent weeks have stated Shanghai’s export demand has dropped as much as 40 percent.
As a result, vessel operators are making tough decisions to skip Shanghai and institute blank sailings to align capacity with the reduced demand. This step is sure to cause future disruptions to vessel schedules worldwide.
Pudong International Airport (PVG) is operating but in very limited circumstances. As a result of the special permits required to get there, cargo which can flow through PVG often faces delays over a week before getting processed and loaded.
Despite some limited closures, Ningbo Port has remained open and has been the main source of relief for cargo being redirected from Shanghai, given its proximity.
As a result, early numbers suggest that April 2022 will be a record month for the port in terms of containers handled.
Beijing is currently dealing with increasing COVID-19 cases. Thus far, they have resisted full scale lockdowns but will be under pressure as cases grow.
The port of Tianjin/Xingang is the main source for inbound/outbound cargo for the Beijing area and are so far unaffected and remain operational. Trucking restrictions could increase which will make general cargo handling tougher to manage.
Beijing Capital International Airport (PEK) remains operational, though threats continue to curb passenger service, which will have an impact on the busy cargo hub if taken.
Mohawk Global will continue to work on behalf of our clients to help manage the situation and will continue to provide updates. For discussion about impacts to your specific cargo needs, please contact your Mohawk Global representative.