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Another notch in the global supply chain

The anti-pandemic closure of Shanghai will have a negative impact on freight transport and increase its costs.

China’s move against the Covid-19 pandemic further rattles global supply chains. The Chinese coastal city is a busy maritime and aviation crossroads.

In Shanghai, a city of 26 million a two-phase anti-pandemic closure began on Monday, so far in the first half of the city. Today the city recorded 4,400 cases of coronavirus. It’s an all-time record.

While the airport and port remain open, Shanghai has imposed strict movement restrictions, with cars unable to take to the streets without permits and millions of people not allowed to leave their homes. Truck traffic in and out (of Shanghai) will be 30 percent seriously affected by the complete lockdown of Shanghai’s Pudong and Phuxi areas, gradually until April 5.

Supply chain, Container truck in ship port

Warehouses will be closed

Warehouses in Shanghai will be closed until Friday. As a result, delivery times are likely to be extended and shipping costs are likely to increase. Costs will be affected by, among other things, detours and highway tolls.

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Factories in the neighbouring province of Zhejiang have shifted loading from Shanghai to the port of Ningpo, said US company SEKO Logistics. A sharp increase in air freight rates is expected from today, the logistics firm said on its website.

Local authorities have ordered widespread testing of the population and a suspension of work at businesses and factories, except those providing essential services and food supplies.

Bruno is an Investment enthusiast with several years of experience in the industry. He enjoys following the latest news and technology trends...


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