SUPPLY CHAINS, ALREADY under heightened stress because of the Ukraine conflict, face a new challenge from the latest Covid-19 lockdowns.
Congestion in the Yantian and Shekou container terminals at Shenzhen and the terminal in Hong Kong is at its worst in five months, leading to further delays in shipping to export markets.
Approximately 174 container ships are anchored or loading in Shenzhen and Hong Kong, the most since October 21 last year in the aftermath of Typhoon Kompasu.
The same is shaping up in Shanghai. In the north, the lines of vessels waiting to get into Qingdao port in Shandong were double the length mid-month that they were at the end of February.
The Omicron variant’s challenge to China’s zero-Covid strategy is making the congestion worse than that typically seen around Chinese ports after the Lunar New Year. The delays will have a ripple effect as shippers re-route cargo and loadings to other ports. Longer delays will also push up freight rates.
As well as affecting port operations, lockdowns have hit production, with factories being temporarily shuttered or allowed to operate under strict restrictions.
While Shenzhen has just eased its lockdown, Hong Kong is battling a fearsome outbreak of the Omicron variant. Shanghai, which handles more tonnage than either of the two southern shipping hubs, is still seeing a rise in infections. Although denied by authorities, rumours of a coming complete lockdown are circulating.