Chinese lockdowns affect shipping worldwide

Chinese lockdowns affect shipping, even though their impact has been mostly felt in the country’s internal road transportation logistics. Notwithstanding, maritime transport is already beginning to feel the effects, which may linger well past the lockdown’s official ending, according to Centronave (National Center for Transatlantic Navigation). This entity brings together the main navigation groups.

Given the new record infarction rate, Shanghai authorities, where the most important container terminals in the world are, have adopted a series of measures to control the spread of the disease. However, these measures caused significant disruptions to local manufacturing and transport activities, inevitably putting extra pressure on the country’s inland logistics system.

According to recently released data, nearly 200 million people and more than 20 Chinese cities are under either total or partial lockdown, with their road accessways totally or partially blocked. “As a result, the country’s internal land transportation has been greatly affected, and the internal supply chain under significant pressure,” said the association’s executive director, Claudio Loureiro de Souza, in a statement.

Another bottleneck-generating factor is the “rigorous testing activities imposed on the population, including truck drivers,” which contributes to the accumulation of goods in warehouses and port facilities.

“These are the main factors aggravating internal logistical bottlenecks, which leads to delays in maritime transportation due to the accumulation of goods and stooped flow of items.”

It is too early to predict when the situation will return to normal for companies. “There are several factors to be considered, most importantly how long the outbreak of the omicron variant will last and the government measures that will be taken to control that,” says Centronave.

The institution also expresses concern over the buildup of containers and the congestion of goods in storage facilities, which could have long-term consequences even after China lifts the restrictions.

Check below a comparison of Brazil-China exports and imports of containers in the last three years. The data is from DataLiner:

Container Exports to China | Jan. 2020 – Feb. 2022 | TEU

Source: DataLiner (click here to request a demo)

Container Imports from China | Jan. 2020 – Feb. 2022 | TEU

Source: DataLiner (click here to request a demo)

This crisis emerged precisely when the global supply chain was already under stress. Since 2020, worldwide logistics have been hampered by the pandemic, which resulted in a shortage of containers and available space on ships, as well as delayed vessel calls, port congestion, and an increase in sea freight rates. Even without the Chinese lockdowns that affect shipping, the flow of containers and cargo was not expected to return to normal this year.

Source: Valor Econômico

To read the full original article, please go to:

https://valor.globo.com/empresas/noticia/2022/04/18/lockdowns-na-china-comecam-a-afetar-transporte-maritimo-em-todo-o-mundo.ghtml

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