China has mandated a strict “zero COVID” policy since the onset of the global pandemic, which has led to tight lockdowns across the country whenever cases have started to spike.
Recently, lockdown restrictions have been enacted in major cities like Shenzhen and Shanghai, as China deals with one of its worst outbreaks since Wuhan in December 2019.
These cautionary measures have had far-reaching impacts on China’s economy, especially on its supply chain and logistics operations.
Shanghai’s port system, which handles about one-fifth of China’s export containers, is currently experiencing significant delays as a result of the recent government lockdown.
Shipping volume has dipped drastically since early March this year, right after partial lockdowns began in Shanghai.
By the end of March, as restrictions continued to tighten up, shipping activity dipped nearly 30% compared to pre-lockdown levels.
And while activity has recently picked up, it’s still far below average shipment volumes prior to the recent lockdown.
While the port is still technically operating, shipping delays will likely cause hiccups in the global supply chain.
That’s because the Shanghai port is a major hub for international trade, and one of the largest and busiest container ports in the world.
How Bad is the Back-Up?
As of April 19, 2022, over 477 ships are still waiting to deliver goods to China.
Much of these delays are due to transport issues—an estimated 90% of trucks that support import and export activities are currently offline, which is causing dwell-time for containers at Shanghai marine terminals to increase drastically.
Wait times for at Shanghai marine terminals has increased nearly 75% since the lockdowns began.
Delays at the Shanghai terminal have sent ships to neighboring ports in Ningbo and Yangshan, but those ports are beginning to get congested as well.
The global impacts of this current bottleneck are still pending, and depend greatly on the length of Shanghai’s lockdown.
According to Freight Waves, this could turn into the biggest supply chain issue since the start of the pandemic if China’s marine shipping congestion isn’t cleared up soon.
Source Carmen Ang Visual Capitalist