To add to the problem, many truck drivers have struggled to reach ports in China to pick up containers because of travel restrictions and Covid testing requirements. Shipping giant Maersk warned in an advisory last month that trucking services in Shanghai would be “severely” impacted by these restrictions.
“With the manufacturing industry being shuttered [in Shanghai] and truckers unable to travel quickly, exports have been reduced, and shipment delays have increased,” said Josh Brazil, director of Supply Chain Data Insights at Project44.
Delays will “continue into the summer months,” as factories struggle to return to normal operations in Shanghai, he added.
Although authorities have allowed some businesses to restart production, many workers are still stuck in quarantine at home. Factories that do reopen are facing component shortages and difficulty in securing trucks to carry goods into or out of the port.
“The ripples in shipment delays are only beginning to become visible and are expected to extend well into the next few months,” said Brazil.
Shanghai — China’s leading financial center and most populous city — has been under a strict lockdown since late March. More than 8 millionresidents are still banned from leaving their residential compounds. The Covid restrictions have spread to other cities, including Beijing — the nation’s capital.
Shanghai port remained open throughout the lockdown, but data from various shipping firms show an increasing backlog of ships and containers.
US supply chain companies have expressed concerns about fresh chaos heading towards American ports, which are still recovering from the severe congestion and delays they suffered last year.
Shelley Simpson, chief commercial officer for JB Hunt Transport Services, said late last month that while there has been “a temporary relief” at US ports, things may get a lot “a lot worse” this summer because of what’s happening in China.
It “just takes a little bit of disruption to really change the environment all over again,” she added.
Ships and containers jam the ports
Shipping queues are getting worse in China — and other parts of the world.
Nearly 20% of container vessels globally are currently waiting outside congested ports, according to a survey published last Thursday by Windward, an Israel-based global maritime data firm.
Almost a quarter of those unberthed ships are stuck outside Chinese ports. That’s 412 ships, up 58% since February, the survey added.
It’s clear that lockdowns in China have caused a bottleneck, the firm said.
Across China, at least 27 cities are under full or partial lockdown, which could be impacting up to 185 million residents across the country, according to latest CNN calculation on Wednesday.Beijing effectively shut down its largest district this week.
President Xi Jinping signaled this week that China would continue with its zero tolerance approach to Covid. On Thursday, Xi told all levels of government to “resolutely adhere to the zero-Covid policy.”
China is home to seven of the world’s top ten container ports, including Shanghai, Ningbo-Zhoushan, Shenzhen, and Hong Kong. In Shanghai — the epicenter of China’s current Covid outbreak, the situation remains severe.
The number of vessels waiting at the Port of Shanghai had increased to 384 by April 25, up 27% from a month earlier, according to most recent data from S&P Global Market Intelligence.
Pressure is also building on other Chinese ports, as vessels try to find alternative ports to berth. Ships have faced growing delays since late March outside Ningbo-Zhoushan port, the world’s third largest port, less than a hundred miles from Shanghai, according to Lloyd’s List Intelligence.
Containers are also piling up because of truck shortages.
At the peak of the lockdown in Shanghai, containers were sitting for as many as 15 days at the port before being picked up by truckers, up from fewer than 5 days when the restrictions first took effect, Project 44 data showed. The average wait time has since come down but was still 10 days last Wednesday.
Zhang Wei, vice mayor of Shanghai, acknowledged last week that the city is seeing “reduced efficiency” in cargo transport and “poor logistics” since the lockdown.
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