China COVID Lockdowns causing supply chain stress
31st March, 2022
With the Chinese Government pursuing a COVID zero policy they have locked significant areas of Shanghai with up to 25 million residences not allowed to leave there home unless a permit has been approved. The lockdowns are in the Pudong and Puxi areas. Puxi lockdown commenced 28th March and is due to be lifted 1st April, at which time the Pudong area will be locked down until 5th April. During this period Covid testing is taking place and we await confirmation that normal business can proceed.
As a result both air freight and sea freight are being impacted, whilst both the airport and ports are operative they are seriously restricted on throughput as a result of all other services required for an efficient supply chain being impeded. For example, up to 30% of trucks in Shanghai are currently not working due to the lockdown.
Air Freight: many airlines are cancelling services, per above comment we are hopeful for a return to normal services after April 5. Bookings are by request and alternative airports of departure can be considered.
Sea Freight: schedules are changing rapidly with vessels delayed with loading/unloading, in queue for a birth and some being re-routed and missing Shanghai altogether. Where necessary we are taking bookings to alternative ports such as Ningbo which is fully operative. Our customer service team is working on each shipment to ensure the most efficient movement for you, this week we have routed many containers out of Ningbo.
Trucking: as noted approx. 30% of trucks are off the road and some trucks are restricted in areas that they can drive through.
Freight Forwarders: all of our China partners staff are working albeit from home, for communication purposes it is business as usual, they are doing a fantastic job for us.
Suppliers: please check with your suppliers for what restrictions they may be facing on the production of your goods and also if under FOB terms what is their ability to manage the ex works needs at the moment, if any doubt on this matter our customs service and sales team can be of assistance.
Whilst we are hopeful for business as usual after April 5 there will be ongoing delays as a result of the lockdowns. We have pressed on the need to be communicating with us well in advance of your goods being ready and we thank all of our customer for doing so, it is most helpful and allows to best manage the movement of your important cargo.
For any questions on the China lockdowns and impact on the supply chain please contact our sales team on sales@sccargo.com.au
