Shanghai container port has been operating but the lack of trucking capacity has resulted in chaos in supply chains.

According to a global forwarder, trucking and entry problems are creating pressure at some yards in Shanghai port. Additionally, some carriers which include Maersk and ONE, have “started to cancel calls at Shanghai to instead provide intermodal services, such as land-to-water or rail.”

As more export volumes have been redirected to Ningbo, supply chain conditions were also worsening there, another forwarder said. “The situation at China’s second biggest port has worsened, with more COVID cases and measures introduced. This has combined with a lot of shippers trying to re-route cargo from Shanghai through Ningbo, especially those in Jiangsu, Anhui and Sichuan provinces.”

As China continues to adhere to its zero-COVID strategy, Sunny Ho, executive director of the Hong Kong Shippers’ Council, speculated whether there may be a renewed push towards sourcing in Southeast Asia.

“Shanghai’s hinterland extends much further into the East China delta, and the lockdown consequences extend into these vast areas as well. In the short run, overseas buyers may switch some procurement to alternative manufacturing areas, like ASEAN [Association of Southeast Asian Nations] and Mexico.”

However, Mr. Ho said production capacity in these areas may be insufficient, given their reliance on China for raw materials and intermediary goods. He added, “But in the longer run, the diversification process – which began before the pandemic – is expected to resume, and may gain some momentum.”

Source: The Loadstar