On March 28th, the Chinese city of Shanghai shut down due to an increase in COVID-19 cases. In this article, Aerodoc’s experts outline the scope of this worrying decision for the logistics sector. See how it will impact sea, land, and air freight.
A new coronavirus outbreak in China has the Asian nation’s authorities on high alert, especially in Shanghai, the country’s economic capital and largest city, with 25 million inhabitants. The city’s authorities imposed a strict nine-day lockdown, which has already affected shipments. In fact, Shanghai’s decision is impacting all kinds of freight.
Due to the epidemic curve, the logistics sector will have to make decisions daily to optimize deliveries and avoid a breakdown in supply chains. According to official statistics, in January and February, China had registered only 400 cases and seven deaths, but since March the Omicron variant has caused around 11,500 infections, most of them asymptomatic.
To flatten the curve and conduct mass testing, the government has launched a strict nine-day lockdown, which began last Monday and will be rolled out in two phases: the city’s east side will shut down on March 28-31 and the west side will follow on April 1-5. The measure has the shipping industry on high alert.
Impact in global supply chain
The lockdown is concerning for the logistics sector and the global industry, as experts fear it will worsen delays and breakdowns in the global supply chain, causing shortages. China’s measures come as the industry’s biggest companies prepare to kick off the main produce shipping season, between April and July.
Health expert Wu Fan, who manages the city’s pandemic task force, recognized a few days ago that Shanghai could not shut down again ‘due to its significant role in the Chinese economy and its global impact.’ Indeed, Fan warned that soon ‘there would be a lot of international cargo ships floating’ on the East China Sea.
For the time being, as reported by specialist media outlets earlier this week, both Pudong International Airport and Yangshan Container Port are operating under relatively normal conditions. However, the shutdown is already affecting logistics, with airlines, carriers, and providers feeling the impact.
Aerodoc has a team led by Estefanía Sisatzky, Sr. VP of OPS & Customer Service, closely monitoring events in China. They warn to ‘expect slower customs clearance times and potentially reduced availability of domestic/international shipping services.’ In situations like these, service availability must be checked in real-time to avoid not just delays, but also the mishandling of freight.
Aerodoc’s experts also expect ‘complexities’ in last-mile deliveries. ‘Even though many import/export terminals are currently active and operational, agents need to check operational availability to ensure consignees actually receive the merchandise’, Sisatzky adds.
Aerodoc’s team is monitoring the situation in real-time. Dan Zonnenschein, Aerodoc Inc.’s COO, stressed that ‘nobody celebrates a lockdown, but we at Aerodoc know that in times of systemic stress like these, our value proposal can be seen more clearly, as we work to ensure that all shipping commitments are fulfilled in time or with the least possible delay.’
Ocean freight
Key facilities and ports in Shanghai handling full container loads (FCL) for ocean freight are operative, but with some constraints, as trucks from the provinces of Jiangsu and Zhejiang are barred from entering Shanghai. We at Aerodoc are closely monitoring this situation, updating our customers in real-time on the lockdown’s potential impact on shipments.
A key fact: truckload carriers from outside Shanghai are cleared to enter the city’s ports with FCLs and FTLs (full truckloads), but not LCLs (less-than-container loads). In the latter case, experts recommend using Ningbo as an alternate shipping point.
As for imports, these remain mostly operational, although there could be significant delays in the future. Local authorities are checking flows to prevent potential bottlenecks if companies make last-minute decisions to ship their cargo before an expanded or stricter lockdown is imposed.
Air freight
Shanghai Airport can still handle imports, but significant delays may ensue due to a shortage of trucks. Because of this, industry experts suggest using CGO Airport as a potential alternate import terminal.
As for exports, PVG Airport remains operational, but not at full capacity, as shipping between export warehouses and terminals has been shut down.
Stay connected with Aerodoc to know more about the situation in Asia.
