The staggered lockdown of China’s largest city, Shanghai in an attempt to contain the biggest wave of Covid-19 since the start of the pandemic is impacting global manufacturing and logistics, with limited flight capacity for air cargo.
Why is Shangai in Lockdown?
China has a strict zero-Covid policy, meaning that when a potential outbreak is discovered, the area is put into an immediate lockdown in an attempt to prevent the virus from spreading any further.
The eastern side of Shanghai was placed in a four-day lockdown on Monday 28th March in an attempt to extinguish a new outbreak of the Omicron variant. This lockdown was due to be lifted on Friday morning, however, an extension was announced late Thursday night. Meanwhile, the planned lockdown of the western side of the city, began Friday morning, meaning that the majority of Shangai’s 26 million residents are now currently in lockdown.
How is the Lockdown Affecting Logistics?
Shangai’s officials shut down the eastern half of the city on Monday, followed by the western half on Friday, with residents ordered to quarantine at home while mass testing is conducted. As a result, worker shortages have ground manufacturing activity to a halt and logistics services are also being negatively impacted.
Many factories and warehouses are closed completely and with zero public transport and very few trucks or drivers available, logistics companies operating in China are struggling to get goods to or from airports.
Flights are still running from both Shanghai Pudong airport and Shanghai Hongqiao city airport, but with very limited capacity and this is mostly for passenger flights, not cargo. Additionally, cargo vehicles are unable to use the roads to Shanghai Pudong during the lockdown and even once it has been lifted, trucks will only be allowed to cross the province borders if the driver is able to provide a certificate showing a negative Covid-19 test result taken in the previous 48 hours.
Logistics providers working in China report that they are attempting to continue with air cargo activity where possible but in a customer notice, freight forwarder Dimerco said that many cargo carriers, such as Cargolux have already cancelled their Shanghai flights. Air China has also cancelled several upcoming freight flights to the US, with multiple planned flights to Los Angeles and Chicago cancelled this week.
Transport company, C.H. Robinson has also warned that customs processing is also likely to be slower during this time as the Chinese authorities are currently only accepting electronic customs declarations and are not conducting other routine services such as cargo inspections.
Multiple Issues for Freight Services
Logistics operators offering air cargo services are now facing multiple issues. The sector was already hit by the reduction in shipping capacity and escalating fuel prices as a result of the war between Russia and Ukraine.
The Western sanctions put in place following Russia’s attack on Ukraine took Russian cargo airlines out of the equation, which has significantly reduced air cargo capacity. Russia has also blocked its airspace, which has lengthened the routes between Europe and Asia.
The reduction in capacity combined with higher operating costs has driven up cargo rates in the past month, with rates expected to stay high for the foreseeable future.
Here at Hawley Logistics, we have more than 35 years of experience in freight solutions. Our extensive and longstanding global partnerships allow us to seamlessly move your goods worldwide, with efficient and cost-effective logistics solutions.
We understand that these are challenging times, with global situations constantly changing and new issues arising, however, at Hawley Logistics, we’re continuing to offer the very best haulage, freight and logistics services to our customers. We’re with you every step of the way and will do everything in our power to keep your goods moving and get them to their final destination on time.
To discuss your requirements or find out more about any of our services, don’t hesitate to contact us. You can also request a callback and one of our team of experts will be in touch as soon as possible to discuss how we can help.