China’s Covid lockdowns are worsening congestion at Chinese ports, resulting in carriers suspending their services and cancelling bookings for cargo exported to China.
According to data provided by Four Kites, over-the-road volumes to and from Shanghai significantly decreased from March 12 to April 16. Over-the road and intermodal shipments from the city are down by 41 percent, while deliveries dropped by 72 percent.
Thomas Gronen, the head of the business unit of Greater China at Fibs Logistics, said the lockdowns are primarily causing severe limitations to road transport.
Drivers entering Shanghai are required to provide a negative PCR test, printed road permit, their full itinerary, and delivery destinations before they can enter city limits. The tests are done on the highway, deterring truckers from entering Shanghai. Gronen said that many truck drivers have either been under residential lockdown or have not willing to risk leaving Shanghai province due to possible new rules in transit, at their destination cities or upon re-entering the province.
However, truckers can now go to pick up cargoes in Suzhou, but only if the shipper or the factory has applied for a road pass in advance. Trucking into Shanghai from other provinces is now easier, but only for container trucks, not for bulk or less-than-container-load (LCL) cargo. In Ningbo, it’s the other way around.
“Shanghai is not alone with this; we have similar, though less severe problems, along the entire coastline south of Shanghai,” Gronen said.
“Things are much more normalized on the northern coastline after they had lockdowns, mostly in January. For the manufacturers, they have no choice but to accept this. It is just what it is.”
Four Kites data shows strong ocean cargo flows at Shenzhen (where lockdown was recently lifted) and Ningbo-Zhoushan ports. The 14-day throughput average has increased by 15 percent since March 12.
However, the company recorded a decreased ocean freight volume at the port of Shanghai, with the 14-day average shipments dropping by 23 percent. Meanwhile, the port’s two-week average import time was up to eight days, increasing the ocean dwell time by 144 percent. Exports were down by 20 percent.
Gronen said understaffing became a big problem in the port of Shanghai. The efficiency of the port is down by two-thirds of the usual capacity because people have been sleeping, eating, and living in the port now for over three weeks.
“Some staff apparently got sick, further lowering morale and available workforce. The same is surely valid for customs and the commodity inspection bureau, though they share even less operational details than the port company,” he said.
Food imports affected
However, while the port is still operating, its imports of refrigerated containers with frozen meat and seafood are already severely affected. Maersk announced that it had stopped all bookings of frozen reefer and dangerous cargo containers to Shanghai as of April 14.
While terminals in its main ports will remain open, several vessels will be omitting Shanghai, Maersk said in an online update. The company will waive the change of destination and cancellation fees for the dangerous and reefer cargo that is already on its way to Shanghai.
While the warehouse in Shanghai will remain closed, Ningbo, Xiamen, Shenzhen and Qingdao warehouses will remain open until further notice. Gronen said all the Ningbo container freight stations (CFS) are full.
Hapag-Lloyd (HPL) also said in an advisory that the port wouldn’t be accepting reefer and dangerous goods containers. Cargo on the move is being discharged in ports before going to Shanghai. Gronen said these containers should be shipped back to Shanghai once the situation allows.