What does the Shanghai lockdown mean for forwarders?

21 April 2022

Due to the high level of omicron cases, work in the Shanghai docks has been at a standstill since the start of April. It won’t be long before this will also start to affect the other ports in China. What’s more, shipping companies have announced blank sailings, and congestion and delays are looming. How will this affect your shipments?   

The situation in Shanghai

Shanghai port has been in lockdown for almost 3 weeks now. At the time of writing, there are still about 20,000 infections a day. The number of infections seems to have stabilised in recent days, but this does not mean that the infarction in Shanghai has been resolved.

Local suppliers are facing a challenge, due to road closures and strict quarantine rules for truck drivers. Shanghai is still running at half speed and suffers from severe congestion. Airfreight and rail transport are also affected by the lengthy closure.

Blank sailings

In mid-April, several shipping companies announced a number of blank sailings, at least for the next few weeks. Why do shipping companies choose this option? And what does it mean for you as a forwarder?

It is important that the available shipping space and the supply of cargo are in balance. If this is not the case, shipping companies can take the unpopular decision to announce blank sailings. A blank sailing indicates that a shipping company has cancelled a specific sailing. A ship may skip a particular port or the entire route may be cancelled. In this case, it means the exclusion of Shanghai port.

S.O.S.

The effects of the war in Ukraine are now felt everywhere. Entrepreneurs have already been advised < 1} to be as agile as possible in this unpredictable market. Forwarders should therefore be genuinely mindful of an emergency situation.

The containers that are currently en route will be delivered in a few weeks. However, due to factory closures, production in Shanghai has been at a standstill for weeks. As such, the next few weeks will be extremely difficult for new shipments from Asia.

Unfortunately, the options via rail and air are also limited. Space has to be found on board for cargo usually transported along the New Silk Route through Russia. The closure of Russian airspace means airfreight is limited and incredibly expensive.

What will happen to your shipments from China?

The lockdown in Shanghai also affects the transition times from other ports in China. Ships are already experiencing delays in arrivals at Hong Kong and Yantian. What’s more, they too have been struggling with their own coronavirus measures for some time.

Cargo from Shanghai is shipped via Ningbo port as much as possible, which is not without issue, of course. The coronavirus outbreak in Ningbo is under control. However, there is serious traffic congestion on the highways around the Ningbo port area.

Due to the large amount of additional cargo from Shanghai and nearby cities, more time is needed at the terminals in Ningbo to process everything. As a result, congestion means that the lay-up time of ships is considerably longer than normal. This will result in additional delays for your shipments as well. With the peak season upon us, we hope that the situation will soon return to ‘normal’.

For specific information about your shipment(s), please contact your Ritra Cargo contact person.