Shanghai lockdown escalation adds to supply chain chaos

Date: Thursday, March 31, 2022
Source: Lloyd's List

SHANGHAI has escalated restrictive rules to curb the rising coronavirus infections, adding strain to the already stretched container logistics services in the region.

Local authorities are locking down China's biggest city, which reported approximately 8,500 positive cases over the past three days, in two stages to conduct massive virus screening tests over the next nine days.

They only blocked some neighborhoods and districts deemed as high risks in the previous round of control measures.

Currently, the districts to the east side of the Huangpu River, which passes through Shanghai, are on lockdown. The exercise will start on the west side on April 1.

Road transport of containers, which already felt the impact of the existing travel restrictions, is now being further disrupted.

About 80% of the city's storage yards in the lockdown area have been suspended, according to local forwarding sources.

Some warehouse facilities are also shut down, which could cause delays of shipments.

In a customer advisory, Shanghai Yalian Logistics has declared force majeure on containers that cannot be loaded on ships in a timely fashion because of the lockdown measures.

Truck drivers can across the river through only one remaining tunnel, should they register themselves online and hold the digital health codes as well as 48-hour negative nucleic acid testing results.

“Drivers are being tested almost every day and it’s increasingly difficult to get tested as most NAT sites are closed in the city,” a local freight forwarder told Lloyd’s List.

The slowdown of inter-city traffic appears to be worsening.

While most roads to Shanghai are already blocked, neighboring provinces are imposing more stringent requirements to limit entry for drivers who have been to the virus-stricken Chinese financial and shipping hub.

Some nearby cities are requesting drivers from Shanghai to have swab tests at the exits of the highways or even serve 14-day quarantines, hampering the already clogged trucking services.

“Non-local truck drivers are avoiding entering Shanghai as they are afraid of being quarantined when they are back from Shanghai,” said the forwarder.

As a result, logistics companies are switching to the nearby Ningbo port or even the further away Qingdao port. Others are halting their trucking services and trying railway as an alternative to haul cargo, local forwarders said.

“There would definitely be a rise in logistics costs as trucks are making a detour,” said a second forwarder.

Hong Kong-based Seko Logistics said the “impact on ocean freight is yet to be confirmed”, while Shanghai International Port Group, the main operator of the port, said it was keeping services as normal.

However, concerns are being raised that the recent situation in Shenzhen, under which slowing container trucking services led to longer vessel berthing time and worse congestion, may be repeated in Shanghai.

 

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