UPDATE: 3/28/2022—On Sunday evening, March 27, the city government in Shanghai ordered a split lockdown of two city sections in Shanghai. The first section of Pudong, which contains Shanghai-Pudong International Airport, will be shutdown from Monday, March 28 to Friday, April 1, for COVID-19 testing.
Following this shutdown, the Puxi area (closer to central/downtown) will be shut down from Friday, April 1, until Tuesday, April 5 for similar testing.
PVG Airport and the two main ports in Shanghai (Waigaoqiao and Yanghsan Terminal) are open but the lockdowns will severely limit workforce and available truck capacity, which will cause large disruptions to cargo flow. Supporting warehouses, exam sites, and container freight stations face the same situation.
At this time, widespread cargo disruption is likely. Also, there is fear that these actions could be extended or expanded, as widespread testing could yield more positive cases and potentially cause more intense reactions from the local Shanghai government.
Shenzhen and its surrounding areas have seen their restrictions lifted, though the disruptions—and continued worker and trucker shortages—have caused issues in the major port city. This includes crossing the border from China into Hong Kong, which continues to be challenging.
UPDATE: 3/16/2022—Government authorities in China have announced that Dongguan and areas of Huizhou are now under the same lockdown procedures as Shenzhen city, lasting until 3/20. As these are major centers for shippers and manufacturers, these lockdowns should limit the operations of the facilities in these areas and limit the amount of cargo that can load for export.
The Chinese government has announced that COVID-19 cases are on the rise throughout many cities in China, including major port areas. Given the Chinese policy of zero-COVID, the government’s response to these cases could have a significant impact on the flow of cargo.
While COVID-19 cases are being monitored in port cities such as Tianjin, Qingdao, Ningbo, and others, the main concern is for major shipping centers in Shenzhen and Shanghai—where the cases have been most extreme. Below is a summary of the situation.
Shenzhen
The city of Shenzhen has been put on near full lockdown for the week of 3/14 to 3/20, except for vital services. This lockdown will include cargo related facilities such as warehouses and free trade zones. If cases continue to rise, the lockdown can be extended.
Here is the current impact, as we understand it.
Yantian Port
Yantian Port remains open. Workers need to show negative COVID-19 tests, which will limit or slow the workforce’s ability to handle normal operations within the port.
Warehouses & LCL Cargo
Most warehouses and LCL consolidation centers are located within the city and will be shutdown. LCL cargo will not be able to move during this lockdown. Guangzhou and Xiamen could be possible alternatives for urgent LCL cargo.
Shippers & Manufacturers
Shippers and manufacturers within the city are subject to the shutdown. However, many regional shippers are in the Dongguan and Huizhou areas outside of Shenzhen and are not currently facing the full lockdown. Depending on their location and policies, they may be open to allow movement of cargo.
Trucking & Transportation
Trucking supply will be reduced as drivers must show negative tests to enter certain areas, and many cannot move through or come from lockdown areas in the city’s center. Processing time may increase along with some costs, but transportation can be arranged.
Vessel Schedules
At this time, no steamship line has announced any plans or intentions to skip Yantian Port during the lockdown. It is a possible step but has not been seen at this time.
Shenzhen Airport
Shenzhen Airport (SZX) will be operational, but most of the warehouses and facilities needed to move cargo through the airport are not open, which will severely limit or completely close off the airport. However, most cargo from the area utilizes Guangzhou Airport (CAN), which remains operational.
Shanghai
Cases are on the rise in Shanghai but currently, there are no lockdowns in place. All ports, CFS warehouses and terminals remain open. There are some points of disruptions, though.
Trucking Capacity
Drivers are required to show negative COVID-19 tests to move in and out of Shanghai. This will slow the movement of cargo, as there is no way to reach the ports in Shanghai without moving in the city. Only minor disruptions are expected at this time.
Shanghai-Pudong International Airport (PVG)
PVG Airport has been facing difficulties since the beginning of the Ukraine conflict, as rules around transiting airspace and Russian ownership of aircraft have limited the number of planes operating in the area. Because of the new COVID-19 cases, for the next six weeks, passenger aircraft will be diverted away from Shanghai.
Most cargo that moves out of PVG airport is done in cargo freighters, so the limitation of passenger flights should not have a massive impact on capacity. However, any limitation could cause some capacity difficulties, cargo delays, and rising costs.
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.