Lockdowns in Shanghai and the Impact on Global Supply Chains

Lockdowns in Shanghai and the impact on global supply chains. Is it 2019 all over again? Is as if we could not get enough of COVID, and as of the end-March, China’s policy of no COVID had led to additional lockdowns. 

The metropolis of Shanghai with its more than 25 million residents was divided into two and one part was sealed off after the other. Despite the latest results of mass testing, the number of infections is still at a high level, so the Chinese government has extended the lockdown indefinitely.

What impact does this have on logistics in particular? 

Pudong, for instance, is home to the largest container terminals WGQ and Yangshan as well as the PVG airport. Other major port cities such as Shenzhen and Hong Kong were also in lockdown due to rising COVID-19 numbers. However, in Shenzhen, some restrictions have already been lifted, allowing factories to reopen earlier than planned, in order to mitigate the impact on supply chains.

The lockdowns have already had a wide range of effects on the ports’ operations. For example, many terminals (Hong Kong, among others) could not be supplied or could only be supplied inadequately due to strict restrictions on truck drivers. There have also been staff shortages, such as those at Shenzhen’s container freight stations, which have particularly impacted cargo operations. 

In Shanghai, truck drivers are only allowed to leave or enter the city if they can provide a negative PCR test and a negative nucleic acid test that are no more than 48 hours old. Next to that, the containers must have an Equipment Interchange Receipt (EIR), a document given to the shipper when the containers are delivered to or picked up from the terminal, which lists, among other things, the container number and code of the ship. Lockdowns in Shanghai and how they impact global supply chains will be felt across the globe until the Chinese government decides otherwise.