The impact on the supply chain
A full lockdown has been imposed on Shanghai’s Pudong and Puxi districts for a new round of citywide COVID nucleic acid testing. From 5am on Monday, March 28, a lockdown was imposed on Pudong, Punan and adjacent areas until 5am on April 1. In Puxi, the quarantine measures for key sub-districts and towns will continue. Other areas in Puxi will be put under lockdown from 3am on April 1 through 3am on April 5 for PCR testing.
Residents will be barred from leaving their homes and public transport suspended, with private cars only allowed to make necessary journeys.
All firms and factories are to suspend production with people to work from home apart from those involved in essential services and food supply.
Sea and Inland transport
As reported by Maersk, terminals in GCA main ports remain business as usual including vessel operation, yard handling and gate-in & out.
Vessel call and departure stay normal.
The overall landside transportation situation is dynamic subject to change. Trucking service for now is still available in China main ports and nearby cities providing the drivers hold negative Nucleic Acid Test (NAT) report requested by local governments. Specifically, we foresee trucking service between Shenzhen and nearby cities has gradually recovered while trucking service in/out Shanghai will be severely impacted by 30% due to a full lockdown on Shanghai’s Pudong and Puxi areas in turn until 5th April. Consequently, there will be longer delivery time and a possible rise in transport costs such as detour fee and highway fee.
The lockdown in Shanghai comes at a time where congestion at the port had been building for most of March, for all ship types, not just containerships. Data from VesselsValue shows an almost five fold increase in the number of ships waiting to load or discharge at Shanghai in the last two and half weeks.
Shanghai: Warehouses will remain closed from 28th Mar to 1st Apr.
Shenzhen, Ningbo, Xiamen and Qingdao: Warehouses keep operations for now. However drivers are requested to show both health code and negative NAT report within 48 hours for cargo delivery.
Hong Kong: Distribution Center (HKDC) keeps operations for now. Drivers and helpers need to complete vaccination when they come to HKDC according to the government’s vaccine bubble requirements.
Shanghai: Operations for existing cargo in warehouses stay normal. However, new cargo acceptance will be impacted due to the first mile delivery and labor resource constraints. Airline Cargolux (CV) has canceled their schedule for the rest of this week and foresee many airlines will be evaluating the plan for flight cancellation.
Hong Kong: Due to the suspension of the trucking service between Hong Kong and Mainland, barge service is taken as an alternative for cargo moving. Airfreight space reservation will not be proceeded until the cargo is delivered to Hong Kong airport warehouse. As a consequence, It will take longer lead time than usual for the airfreight service.
We’ll keep you updated.
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