ContainersGreater ChinaPorts and Logistics

Lines start to omit calls to Shanghai, the world’s largest container port

Looking on horrified at millions of hungry, irate Shanghainese, citizens in many other cities across China have started to hoard food in preparation for any impending Covid-19 lockdown.

China’s heavy-handed municipal lockdowns have attracted sharp criticism. Authorities have relented a little in Shanghai, the country’s largest city, where lockdown entered its third week today. However, down south mass testing is underway at another important port city, Guangzhou.

In Shanghai, the city has classed residential units into three risk categories, to allow those in areas without positive cases for a stretch of two weeks to engage in “appropriate activity” in their neighbourhoods.

The city has been divided into 7,624 areas that are still sealed off, a group of 2,460 now subject to “controls” after a week of no new infections, and 7,565 “prevention areas” that will be opened up after two weeks without a positive case.

Supply chains are feeling the brunt of the Shanghai lockdown with trucking capacity cut and many factories and warehouses closed.

CMA CGM in an update on Friday noted the “massive” impact on both trucking movements velocity and available trucking capacities.

“These factors have a major impact on import cargo that suffer drastically slower pick up time and therefore excessively stretched dwell time,” the French carrier pointed out.

Some carriers have now announced that reefer cargo, and some types of dangerous cargo, will be discharged at alternate locations as Shanghai has run out of available reefer plugs and space for certain types of DG cargo.

Danish carrier Maersk has announced plans to omit calls to Shanghai from this week with other lines expected to follow suit.

“If Shanghai remains closed for an extended period, then carriers will respond with large- scale blank sailings. This could possibly lead to a peak season supply shortage, coinciding with a release of built-up Shanghai volumes, which could push rates to new records,” the latest weekly report from Sea-Intelligence suggested.

Shanghai has been in lockdown for 15 days. Other Chinese cities have endured worse. For instance, Xi’an, a northwestern city of 13m people, suffered a 33-day lockdown through much of December and January.

In Guangzhou, a metropolis of over 18m people, mass coronavirus testing for all residents started over the weekend after two symptomatic local cases and an asymptomatic one were reported.

Guangzhou closed in-person classes at elementary and middle schools today, shifting courses online as the number of confirmed Covid cases spiralled. The measures will last for at least a week.

Municipal authorities said locals should not leave the city unless necessary, and would need a negative virus test from within the last 48 hours to do so.

Japanese bank Nomura estimated six days ago that a total of 23 Chinese cities have implemented either full or partial lockdowns, which collectively are home to an estimated 193m people.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

Comments

  1. Most irresponsible news. What it will create us lower export volume from china and with new vessels adding up new containwrs adding up it will start the doenward cycle of freight the shipping companies.
    They are now shipping partial loads with many empty containers but the law of average will catchup.
    Once new vessels start and reduce the freight it will go back to the original level. Bulk shipping is the best bench mark for freight
    All other news are bad feed and will not live for a long time. If high gas price puts europe in a recession God save the ocean freight.

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