The two-stage lockdown of Shanghai, China’s largest city, could make supply chain issues worse than the initial COVID lockdowns, logistics companies are warning manufacturers whose supply chains depend on China.
The lockdowns imposed to fight the new Omicron variant could prove more severe than the initial quarantines the Chinese government imposed in 2020 when COVID was first discovered. Two weeks of targeted temporary lockdowns didn’t succeed in snuffing out the breakouts in the city of 34 million so the government has assumed more drastic measures. The first phase of the lockdown applies to the eastern part of Shanghai and will run till Friday. Shanghai’s western part is the second phase, with the lockdown running Friday to the following Tuesday.
Although the ports may be open, port workers, factory workers and truck drivers are locked in their homes, reports American Shipper magazine. Many factories and warehouses have closed and getting goods to marine and airports is proving a challenge with so many truck drivers and airport staff unavailable.
C.H. Robinson, one of the largest third-party logistics providers in the world, issued a client advisory about the situation in Shanghai stating: “Offices and all businesses not considered essential will be closed and public transport suspended, creating major shortages on manpower and trucking availability. Our team in Shanghai are all working from home diligently for the time being and will continue to assess all areas of operation.”
The two-stage lockdown is also impacting the movement of air cargo. Both Shanghai Pudong airport and Shanghai Hongqiao city airport are running, but with very limited capacity and mostly for passenger flights, American Shipper reports. Some all-cargo carriers such as Cargolux have already cancelled flights to Shanghai. China Airlines has also cancelled several freight flights to Los Angeles and Chicago. Pandemic restrictions in Hong Kong have also hampered the cargo freighter operations of Cathay Pacific, a major cargo carrier for the area.