{"id":6156,"date":"2022-03-17T14:48:36","date_gmt":"2022-03-17T09:18:36","guid":{"rendered":"https:\/\/www.gocomet.com\/blog\/?p=6156"},"modified":"2022-09-28T11:53:15","modified_gmt":"2022-09-28T06:23:15","slug":"china-lockdown-global-supply-chain-impact","status":"publish","type":"post","link":"https:\/\/www.gocomet.com\/blog\/china-lockdown-global-supply-chain-impact\/","title":{"rendered":"Chaos for the shipping industry as China announces lockdowns\u00a0"},"content":{"rendered":"\n<p>Global supply chains are still recovering from the last two years of pandemic-related setbacks and the <a href=\"https:\/\/www.gocomet.com\/blog\/russia-ukraine-crisis-supply-chain-strains\/\" target=\"_blank\" rel=\"noreferrer noopener\">recent strains<\/a> caused by Russia\u2019s invasion of Ukraine. Given the circumstances, the latest announcement of nationwide lockdowns in China has forced supply chains to prepare for yet another turmoil in the coming months.\u00a0<\/p>\n\n\n\n<p>Millions of people are in lockdown across the key manufacturing hubs of Shenzhen, Dongguan and Changchun and the Chinese financial centre of Shanghai. A particular concern in China\u2019s lockdown announcement is its impact on China\u2019s major ports, particularly Shanghai and Shenzhen.\u00a0<\/p>\n\n\n\n<p>Shenzhen is the second-most important port in China after Shanghai and <a href=\"https:\/\/economictimes.indiatimes.com\/news\/international\/business\/chinas-covid-lockdowns-could-threaten-half-of-economy\/articleshow\/90197698.cms\" target=\"_blank\" rel=\"noreferrer noopener\">processes about 10% of the containers shipped from China<\/a> in any month. It is home to some of the world\u2019s largest ports and is a major terminus in trade between the U.S. and China.<\/p>\n\n\n\n<p>Though the Shanghai and Shenzhen ports are operating as of today, the surge in COVID cases and spreading lockdown restrictions may affect the workers at the port, leading to a major disruption. Some of the ports are already experiencing congestion and here is an overview of the current situation.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/2IWyrXmy-PuGT0BjpYT_KLX5bNKzLoyCRwZ0erW0j2pDjnad1wAbgejTkzR230YzFMG1HJgwljtIxEgBOf12oNcyhigeTJzPVqfz9ff6o1mpMz0Gu6cflPZuXQGf-g\" alt=\"\" title=\"\"><figcaption><em>Source: GoComet real-time port congestion data (as of March 18th)<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center\"><a href=\"https:\/\/www.gocomet.com\/real-time-port-congestion\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Access GoComet\u2019s real-time port congestion data for any port.<\/strong><\/a><\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_c2f6b5-1a, .wp-block-kadence-advancedheading.kt-adv-heading_c2f6b5-1a[data-kb-block=\"kb-adv-heading_c2f6b5-1a\"]{font-size:18px;font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_c2f6b5-1a mark.kt-highlight, .wp-block-kadence-advancedheading.kt-adv-heading_c2f6b5-1a[data-kb-block=\"kb-adv-heading_c2f6b5-1a\"] mark.kt-highlight{font-style:normal;color:#f76a0c;-webkit-box-decoration-break:clone;box-decoration-break:clone;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}<\/style>\n<h2 class=\"kt-adv-heading_c2f6b5-1a wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_c2f6b5-1a\"><strong>China<\/strong> <strong>lockdown and its impact on shipping \u2013 What we know so far:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>Lockdowns in Shenzhen, Zhejiang, Shanghai, Jilin, Suzhou, Guangzhou and Beijing will heavily restrict container movement at these ports.<\/li><li>The Yantian port free trade zone will be closed from March 14th \u2013 20th.<\/li><li>All vessels at Yantian port already loaded and departing this week will depart as planned.<\/li><li>No cargo will load in Yantian from next week, and vessels most likely will omit the port.<\/li><li>Cross border shipments from Shenzhen to Hong Kong will not move except for essential goods.<\/li><li>Bloomberg reports of lengthening ship queues outside Chinese ports. There are <a href=\"https:\/\/www.bnnbloomberg.ca\/container-freight-rates-set-to-rise-on-more-china-lockdowns-1.1737210\" target=\"_blank\" rel=\"noreferrer noopener\">262 vessels waiting outside Shanghai and Ningbo,<\/a> up from 243 last week.<\/li><li>According to Alphaliner, even with ports open, the lack of terminal handling staff and expected trucking delays could force carriers to skip numerous Pearl River Delta calls or keep vessels waiting.<\/li><\/ul>\n\n\n\n<p><strong>Port delays \u2013 Recent developments:\u00a0<\/strong><\/p>\n\n\n\n<p>Shenzhen and Hong Kong are critical container shipping hubs for global supply chains. While the port delays caused by the ongoing pandemic have not waned yet, the new lockdown announcements have only added to the supply chain congestion woes. If the lockdowns extend, the situation could further worsen, and we may see freight rates increasing in the coming weeks.\u00a0<\/p>\n\n\n\n<p><strong>Yantian terminal closure \u2013 a recap of last year<\/strong><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh4.googleusercontent.com\/vyamamVpW5ySDSQesO6yy1dUt6POycUUkOG4RC1Gc7uBYVEIsq7XOhQKf3Ce1DMMF7YhFbKJ6rdj-iOnStfjnzc4SLi3ocvoUDb6scmLPhjBnr6ybW85hYpcdyI5PYa3HxDJpAkn\" alt=\"\" title=\"\"><figcaption><em>The Yantian port has business partnerships with approximately 40 shipping lines that provide about 100 weekly services to major ports worldwide.<\/em><\/figcaption><\/figure>\n<\/div>\n\n\n<p>When an outbreak hit the Yantian terminal last year, it was closed for a month between May and June. The situation wreaked havoc on global supply chains, and the shipping backlogs took months to dissolve. <a href=\"https:\/\/www.seatrade-maritime.com\/containers\/maersk-warns-yantian-port-congestion-much-bigger-disruption-suez-canal-closure\" target=\"_blank\" rel=\"noreferrer noopener\">Maersk described <\/a>Yantian port congestion as \u201ca much bigger disruption than the Ever Given getting stuck in the Suez Canal.\u201d<\/p>\n\n\n\n<p>Yantian, the world\u2019s fourth-largest port, processes roughly 90% of China\u2019s electronics shipments.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/OokB-vksBxJcJf-tYKyciUDloHonfgRs6tmEVmyJHRXev6Uq8sfJZVWzbw7gxyOPC3Uq8u2RZgYHuSIeuev4zKlKwvu7sDfOXilP5K2hfaPqW-CGgqtTDVIEQl12HBgQUwAgNShJ\" alt=\"\" title=\"\"><figcaption><a href=\"https:\/\/www.gocomet.com\/real-time-port-congestion\" target=\"_blank\" rel=\"noreferrer noopener\">GoComet\u2019s real-time port delay data for Yantian, China, CNYTN<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n<p><strong>Here\u2019s how the congestion looks in a few other key ports:<\/strong><\/p>\n\n\n\n<p><strong>Qingdao:<\/strong> The number of container ships waiting off Qingdao is rising, adding more delays to the global supply chain. According to Bloomberg data, <a href=\"https:\/\/www.bnnbloomberg.ca\/container-freight-rates-set-to-rise-on-more-china-lockdowns-1.1737210\" target=\"_blank\" rel=\"noreferrer noopener\">the number of vessels spotted off Qingdao port<\/a> has almost doubled than it was at the end of February. The increased delays in these ports are expected to push up freight rates.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/mWIRqV-Z371zAlZ6J_Okr9uG0xgX4FrQ6lhKi7maosju8ktOYvWwgi9bIvJxBqaKXTJRJnjuhr2Cuy-a5tVt5gGOPcxVC5lI2IK_bA1SZ2jx0G9DM2IyAuZ7dHyUGUUjPz0JVU35\" alt=\"\" title=\"\"><figcaption><a href=\"https:\/\/www.gocomet.com\/real-time-port-congestion\" target=\"_blank\" rel=\"noreferrer noopener\">GoComet\u2019s real-time port delay data for Qingdao, China, CNQDG<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n<p><strong>Guangzhou:<\/strong> Maritime <a href=\"https:\/\/www.joc.com\/port-news\/asian-ports\/port-guangzhou-nansha\" target=\"_blank\" rel=\"noreferrer noopener\">trade from Guangzhou reaches over 300 ports<\/a> in more than 80 countries and districts worldwide. Guangzhou serves as the most important economic and transportation centre for the Pearl River Delta region and Guangdong province. It is also a vital transport hub for industries located in neighbouring provinces.\u00a0<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh6.googleusercontent.com\/nVpkQJluhOvzBwEWSzcAuYHuVytgZGoNlbzWkMoifwLT3h8XuPfzBiF5nPssmP6hCy69lM-Tcxw060VbeFkGxiC-7_Hm_0bLIfM7u3N1mhKE3MIhEYRpTh2iMQ2G7MtfAq0QSGFv\" alt=\"\" title=\"\"><figcaption><a href=\"https:\/\/www.gocomet.com\/real-time-port-congestion\" target=\"_blank\" rel=\"noreferrer noopener\">GoComet\u2019s real-time port delay data for Guanzhou, China, CNCAN<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n<p>While there is usually a rise in the number of vessels seeking to enter China following the Lunar New Year holidays, this year\u2019s situation has been aggravated by the lockdown aimed at China\u2019s zero COVID policy. There\u2019s also a growing backlog of vessels off the ports of Shanghai, Ningbo and Zhoushan.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/gBrpsq-6R2Zn2yDyM1MbNVE2xvYVTDBe7A10-gnsTJBL1hJL27GS0ZtxHNleiDL9UhDHBJbNJjKFd5Gkabx7LK49YBWv9p8er5dGUhxwPAx5czXukPeoDQYgC0BrMNIPDN-3RtGR\" alt=\"\" title=\"\"><figcaption><a href=\"https:\/\/www.gocomet.com\/real-time-port-congestion\" target=\"_blank\" rel=\"noreferrer noopener\">GoComet\u2019s real-time port delay data for Shekou, China, CNSHK<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n<p>The several disruptions in the last two years, starting from the initial outbreak of the coronavirus and lockdowns, port closures, Russia\u2019s war on Ukraine and now the lockdown announcements in China, have increased the ocean dwell times, especially in the recent weeks.\u00a0<\/p>\n\n\n\n<p>When the container prices are at record highs already, port congestion and container piling up will only further reduce capacity. According to several experts closely monitoring the developments, China\u2019s lockdown announcement will cause a surge in already inflated <a href=\"https:\/\/www.gocomet.com\/freight-quotation-management-software\" target=\"_blank\" rel=\"noreferrer noopener\">shipping prices.<\/a>\u00a0<\/p>\n\n\n\n<p>The China lockdown announcement is nothing less than a major shockwave to an already strained supply chain. How the situation unfolds in China in the coming weeks will significantly impact global supply chains.<\/p>\n\n\n\n<p>Please feel free to <a href=\"https:\/\/www.gocomet.com\/contact-us\" target=\"_blank\" rel=\"noreferrer noopener\">reach out to us <\/a>to build your supply chain resilience during these testing times.<\/p>\n\n\n\n<p>You may also be interested in reading our recent blog \u2013 <a href=\"https:\/\/www.gocomet.com\/blog\/russia-ukraine-crisis-supply-chain-strains\/\" target=\"_blank\" rel=\"noreferrer noopener\">Russia Ukraine Crisis: New strains on global supply chains<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Global supply chains are still recovering from the last two years of pandemic-related setbacks and the recent strains caused by Russia&#8217;s invasion of Ukraine. Given the circumstances, the latest announcement of nationwide lockdowns in China has forced supply chains to prepare for yet another turmoil in the coming months.&nbsp; Millions of people are in lockdown&#8230;<\/p>\n","protected":false},"author":14,"featured_media":14496,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[273],"tags":[],"class_list":["post-6156","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"tag_names":[],"category_names":[],"_links":{"self":[{"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/posts\/6156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/comments?post=6156"}],"version-history":[{"count":0,"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/posts\/6156\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/media\/14496"}],"wp:attachment":[{"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/media?parent=6156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/categories?post=6156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gocomet.com\/blog\/wp-json\/wp\/v2\/tags?post=6156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}