COVID continues to cause disruptions in China.
On Sunday, Shanghai, China’s second-largest city went into lockdown. It’s the biggest citywide lockdown in China since the pandemic began two years ago. Chinese ports are already facing high congestion, and this is expected to increase as supply chains are already dealing with the fallout of the Shenzhen lockdown earlier this month. Terminals in Europe and North America should also expect to feel some of the pain.
The implications of the shutdown are having a big impact on air cargo which is seeing many flight cancellations in the vital supply chain hub. From Freightwaves.com, “During the lockdown, motor carriers can’t use the roads to Shanghai Pudong airport, the main cargo hub. Once the lockdowns are lifted, trucks without a certificate of a negative COVID test within 48 hours won’t be allowed to cross the border between provinces, which potentially could extend the capacity crunch.”
Also weighing on supply chains is the specter of a massive dockworker strike in the US. The potential conflict centers on negotiations over a new contract for more than 22,000 union workers employed at 29 ports along the West Coast. It’s one more factor in a complex situation that’s seen significant moves in volumes month-to-month.
This comes as North American West Coast ports deal with record low numbers of imports from Asia. West Coast imports from Asia dropped to just over an average of 58% in January and February—the lowest ever. This is due in part to shippers avoiding the West Coast because of those potential labor disruptions and already high port congestion, resulting in an increase of imports from Asia to East Coast ports.
And notably, for the first time in over a decade, the number of ocean containers leaving West Coast ports has increased, resulting in a correlating increase in international intermodal volume. February saw an increase of 8.4% out of the Pacific Northwest and 6.1% out of the Southwest—a vast difference from the consistent drops in volume of 10% plus reported in the last 5 years.
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