Covid-19 cases continue to rise in Shanghai, while down south a giant convention centre has been converted to a quarantine hospital as Guangzhou follows a familiar Chinese path towards lockdown.
Setting alarm bells ringing further for people working in global logistics, Covid-19 cases are being detected in greater numbers at Shanghai’s giant port neighbour, Ningbo.
Beijing has faced severe criticism for its zero-Covid policy, which has seen trucking capacity cut dramatically in and out of Shanghai during its 16-day lockdown, as well as warehouses and factories shuttering their doors. Authorities in China’s largest city have tried to ease the situation – bringing in a new three-tier lifting of lockdown over the weekend – yet fewer than 7m of Shanghai’s 26m citizens have been released from their home confinement thus far this week. Moreover, as cases continue to rise in the financial hub there is little chance of daily life returning to normal this month.
The impact on export volumes out of China will grow larger
Commenting via LinkedIn on the latest Covid numbers coming out of Shanghai, Lars Jensen, CEO of liner consultancy Vespucci Maritime, stated: “Yet again record levels of Covid in Shanghai meaning no immediate end in sight to production and logistics disruptions. With the outbreak in Guangzhou also leading to shutdowns there, the impact on export volumes out of China will grow larger.”
Jensen warned shippers ought to expect drops in export demand, port omissions and more blank sailings in the near term future as well as Shanghai-bound cargo increasingly being discharged elsewhere.
Discussing China’s Covid situation on the GMS Podcast yesterday, Peter Sand, chief analyst at freight rate platform Xeneta, said: “Having a lockdown of Shanghai, which is the most connected port in the whole world, is terrible. It is so much more significant than the lockdown in Shenzhen.”
Sand said that problems at the port are being exacerbated by Covid restrictions on truck drivers.
“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,” Sand told the show hosted by GMS’s chief communication officer, Jon Chaplin.
In Guangzhou, meanwhile, familiar steps are being taken on China’s well-worn path to another municipal lockdown.
From Monday, all residents in the export powerhouse of 18m people have been asked not to leave the city unless absolutely necessary. All kindergartens, primary and middle schools, colleges and universities have temporarily suspended in-person classes while construction of a new makeshift hospital in the Pazhou International Convention and Exhibition Center is underway.
Covid cases are also on the rise in Ningbo, a port city where many cargoes have been diverted to during the 16-day ongoing lockdown in Shanghai.
“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, going on to discuss the severe trucking issues across much of the People’s Republic.
“Across China, trucking services are still a key concern, with mandatory PCR tests, positive Covid cases and trucks unable to cross borders causing significantly reduced availability unable to meet the high demand, and rates subject to continued increases,” Woodland stated.
The Chinese government looks rattled from the enormous criticism it is getting for its ongoing zero-Covid policy, both at home and overseas. It appears there are signs of a shift in the strategy as evidenced by Shanghai’s three-tiered opening up strategy as well as a new pilot project that is underway at eight cities including Shanghai, Guangzhou and Ningbo to cut quarantine times for overseas travellers and those who’ve had close contact with infected individuals. The eight cities in the pilot project are reducing quarantine times from 14 to 10 days.