World’s largest inland port becomes latest victim of China’s zero-Covid strategy

Date: Thursday, April 14, 2022
Source: Splash 247

Trucking snarl-ups across China are wreaking havoc on supply chains despite initiatives from local and national government bodies to alleviate the situation while Nanjing, the largest inland port in the world, has become the latest port to report a Covid outbreak among its workforce leading to much of the port’s operations along the Yangtze being shuttered. Yangtze River traffic was already suffering from a shortage of pilots prior to the Nanjing port news, while many other cities in the river delta area have joined Shanghai in lockdown this week.

French logistics firm Geodis reported that as of yesterday trucking services in Shanghai, Kunshan, Taicang and Nantong are suspended following the extended lockdown. Delays are expected within the Yangtze River Delta and in Wuxi, Suzhou and Jiaxing.

Limited trucking availability across much of Covid-battered China has seen prices more than triple this year. Trucks dominate China’s local transportation, hauling about three-quarters of total freight, according to data from the Ministry of Transport.

Discussing Shanghai’s ongoing lockdown on the GMS Podcast earlier this week, Peter Sand, chief analyst at freight rate platform Xeneta, said: “What we have seen is that exports have been performing fairly well, whereas imports have come to a complete stop because truck drivers simply can’t get into and out of the port.”

At the start of the week Beijing ordered all provincial-level governments to keep airports, harbours and highways open so that transport and logistics links can be maintained amid strict anti-pandemic controls.

Local authorities must not erect roadblocks or put healthy truck drivers into quarantine either, the State Council – China’s cabinet – said on Monday evening, amid plenty of reports of highway blocks and limited trucking availability.

At the local level, provinces are trying to introduce ways to keep goods moving on roads. For instance, in Zhejiang, home to the world’s largest port, Ningbo, the provincial department of transportation is creating 82 truck driver epidemic prevention service stations to make round-trips easier.

Truck drivers in key areas outside the province, such as Shanghai, who are responsible for the transportation and security of key materials, can now get accommodation, catering, parking, antigen and nucleic acid testing, vehicle disinfection and other services.

In Ningbo, where Covid cases are creeping up, Geodis reports that all warehouse space is now fully booked, the city overflowing with diverted cargo from Shanghai, while local reports also show the city has been bringing in extra food supplies this week in preparation for any possible lockdown.

“While Shanghai is in complete lockdown, Ningbo is now on ‘yellow alert’ with some cases having been found. Warehouses in Beilun are full with the Shanghai lockdown causing congestion in Ningbo. Space is tight and there is lack of 40′ & 40HC equipment,” an update posted on Monday from UK logistics company Woodland Group stated.

The European Union Chamber of Commerce in China sent a letter to the country’s cabinet last week detailing how Beijing’s Covid-19 control measures had disrupted European companies.

In a letter addressed to China’s State Council and vice premier Hu Chunhua, the chamber, the chamber said that the “old toolbox of mass testing and isolation” was not able to overcome the challenges posed by the omicron variant.

“Current measures taken to try and contain the recent Covid-19 outbreak in China is causing significant disruptions, extending from logistics and production all the way along the supply chain within China,” said the letter, signed by the chamber’s president, Jorg Wuttke.

The rolling lockdowns spreading across the People’s Republic have taken their toll on the national economy with most analysts downgrading forecasts for GDP growth this year. China last month announced that the country’s GDP is expected to grow at 5.5% in 2022, the lowest in more than 30 years. Even this comparatively sluggish target has been questioned in articles from state-run media in recent days.

Domestic sales of excavators – a leading indicator for construction – plunged almost 64% in March from a year ago. Sales of diggers have proved to be a good leading indicator for construction activity and steel demand in the past.

 

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