China’s export and logistics market is sinking further into limbo as the country heads into a three-day “work” holiday on Sunday.
In Shanghai, Thomas Gronen, head of Greater China at Fibs Logistics, said the impact of the lockdown on freight had not improved, despite official talks of restarting manufacturing and a gradual reopening of the city. .
He said The Loadstar“Some parts of Shanghai have opened, but these appear to be on/off openings, with the rules changing at very short notice. The vast majority of Shanghai is still closed.
“The three-phase release plan is subject to local interpretation, with neighborhood authorities taking a more cautious approach than the free-flow option.”
Only a small fraction of the city’s vast manufacturing has been allowed to restart, under closed-loop conditions, Gronen noted, although that is expected to be extended soon.
“Trucking is still subject to daily PCR testing for drivers, and Shanghai and local road permits are required to enter cities in Jiangsu province,” he added. “The local permit must be applied by the local manufacturers, it cannot be done by an agent or the trucker. And other PCR testing rules may still apply and are often imposed at short notice.
Mr Gronen said efficiency at the Yangshan Port terminal in Shanghai was low, which was “not surprising” after four weeks of closed-loop working conditions, he said.
“There are delays of three to seven days before a ship can dock, but this is far from a doomsday scenario. May blank crossings on various loops will increase quite sharply now, with liners increasingly missing out on Shanghai.
MSC, for example, announced a dry start for its Asia-Europe Lion/AE6 service with Maersk, from Ningbo to Felixstowe, via Shanghai. A contact said The Loadstar the carriers “disagreed on whether to sail with half-empty ships or cancel the call”.
Elsewhere, with Beijing the likely next ‘lockdown candidate’, Mr Gronen said Shanghai could expect ‘no relaxed treatment’ and the ‘zero virus approach will likely be continued to the very end’.
Indeed, across China, even as one city opens up, another is targeted for mass testing, such as in Beijing, while Guangzhou is once again on the watch list, the city’s airport – already inundated with cargo diverted from Shanghai – canceling all domestic flights yesterday. due to “suspicious cases”.
Seko Logistics said no freight schedules have yet been affected, but added: “There is an impact on the speed of freight entering the airport warehouse and ULD building, and declarations in slower customs. This is due to some staff and customs having to lock themselves at home and queue for Covid tests.
However, Jimmy Hu, business development manager at YAD Supply Chain Logistics, said, “Flight cancellation decisions will impact some international cargo flights, such as Air China from Guangzhou.”
In Shanghai Pudong, freight forwarders said the main bottleneck remained a lack of trucking capacity nearly five weeks after the lockdown began. Mr Hu said it was “completely beyond normal imagination” that PVG’s services would be interrupted for so long.
But, on the positive side, he added, airlines were offering promotional fares for air cargo outside China, ahead of National Day next week.
Kuehne+Nagel CEO Detlef Trefzger said on an earnings call this week that the biggest problems with China’s lockdowns were not transmission capacity, but production.
“China exports, but it’s less exports, and it’s more selective, and it depends more on production capacity than on port and trucking capacity. We would expect at the moment, and this is our assumption, a reduction in exports to China of 15%. »
But he added that the experience of Chinese shutdowns over the past two years meant “one should not underestimate the power of China and the reincarnation of its trade, it depends on the production and manufacturing capacity , imports of raw materials”.
He said he thought the rebound could happen “in a matter of weeks” as exporters geared up for the peak season.
“For that, you need production to be operational again. I think this will be among the priority activities of the Chinese government. »
For more on the impact of Chinese lockdowns on air cargo, listen to this clip from the Loadstar podcast, by Peyton Burnett, MD, TAC Index.