Date: Monday, April 4, 2022
Logistics companies are scrambling to find alternative gateways for customers’ international shipments as a two-stage lockdown through Tuesday to contain the spread of COVID in Shanghai cripples air cargo operations at the Pudong Airport.
The new measures causing serious shipping delays for imports and exports, as they are through seaports. Digging out from the pileup of freight once the mass quarantine expires is expected to create further challenges for airlines and shippers in the coming weeks.
Shanghai’s two airports are officially open, but little cargo is being delivered because most factories and export warehouses are closed, or operating with skeleton staff, due to the quarantine rules imposed Sunday by city officials, according to freight agents. Customs clearance for shipments is very slow because of limited staff. Authorities are developing a special permit that will enable truck drivers to enter Shanghai Pudong International Airport (PVG) with a valid negative PCR test for COVID, but truck capacity remains very constrained.
Meanwhile, many international passenger and cargo airlines are canceling flights to avoid delays or flying empty-handed.
Third-party logistics provider DSV notified customers it is diverting Shanghai cargo to Zhengzhou International Airport when possible and scouting other airports to pick up the slack. Larger consignments are being dispatched directly to Zhengzhou, while smaller shipments are consolidated in Kunshan and then trucked to the airport, according to DSV.
Chicago-based Seko Logistics said in a bulletin it is redirecting cargo to Zhengzhou, Qingdao or Beijing airports.
Cargolux is one of the all-cargo operators identified by several forwarders as having canceled flights to Shanghai all week. Other airlines with freighter fleets are also adjusting their schedules:
- China Airlines canceled several freighters from PVG to Los Angeles and Chicago, shifted some flights to Chongqing and canceled some flights to Amsterdam and Frankfurt, Germany, through April 9.
- China Southern Airlines canceled some flights to those European cities through April 13. And Qatar Airways has canceled all flights to and from PVG from Thursday through Tuesday.
- Turkish Airlines canceled three freighter flights (Friday, Saturday and Monday).
- Singapore Airlines canceled the majority of flights from Wednesday to Saturday.
The Sino-German joint venture Pactl, which operates three cargo terminals at Pudong airport, has suspended acceptance of new refrigerated cargo until further notice because its temperature-controlled warehouses are full since consignees can’t come to pick up their cargo due to the lockdown, according to a customer bulletin from Crane Worldwide Logistics.
Under Shanghai’s zero-tolerance COVID response, the eastern half of the city, Pudong, is closed through Thursday. The western side, Puxi, will enter lockdown protocols then through Tuesday. That means truckers can move in and out of Puxi but can’t enter Pudong, where airfreight warehouses are located. The number of available drivers in Shanghai has decreased by 30% to 40% because most of the drivers are from the Pudong area, Seko Logistics reports.
Trucks from neighboring cities can enter the Puxi district with a 48-hour nucleic acid test report but might be prohibited from leaving Shanghai until Tuesday. Truck operators in Suzhou, Kunshan, Nanjing, Wuxi and Changshu require special passes to truck into Shanghai and drivers from certain localities are subject to quarantines of up to 14 days upon their return, according to the logistics company.
Freight forwarders say rates are steady at the moment because of the limited throughput but are likely to shoot up once authorities drop lockdown measures and shippers race to get backlogs delivered amid tight supply of all-cargo aircraft. Transport rates from other airports could also get more expensive as they become crowded with Shanghai-origin freight.
Some companies are applying for permits to allow staff and trucks to operate within logistics parks around Pudong airport, but the permit only allows them to move inside the logistics park. They cannot transport cargo to airport cargo terminals from the logistics park even after a customs release. As a result, some warehouses have suspended operations until Friday, when the Pudong district lockdown ends, according to Crane Worldwide Logistics.