The COVID situation in China continues to make waves for supply chains everywhere, with little optimism for things improving as the country holds fast to its zero-COVID approach to containment. This recent view of the ship traffic outside of Shanghai is staggering.
The Port of Shanghai remains at the center of the problems from a supply chain perspective with ongoing disruptions due to lockdowns in the city. This has led to some carriers canceling future bookings until the situation is upgraded. Unfortunately, COVID numbers are increasing instead of decreasing, leading to a further tightening of controls, meaning there’s no end in sight to disruptions in production and logistics. Shippers are being warned to be prepared for a drop in export demand and an increase in blank sailings.
Trucking is impacted as well, as drivers need to show a positive PCR test—taken within the last 48 hours—before they can enter port facilities.
Carriers like Maersk (see their most recent announcement below) are doing their best to keep their customers up to date as another potential crisis unfolds in the industry. In part, they’re providing updates on the following:
- Terminals and/or pickup and return depots facing reduced functionality
- Import congestion
- Landside transportation issues
- Air cargo operations
In an effort to solve at least some of their problems, shippers are looking for viable alternatives in moving cargo from Southeast Asia. One alternative has been providing intermodal services, including land to water options or rail. Another has been to reroute cargo through Ningbo, but unfortunately, the situation is deteriorating there as well.
Finally, the number of empty containers leaving US ports—and their impact on port congestion—is making the news again. Empties take up space in the terminal or yard or they’re stored on chassis, space that could be used for exporters to deposit their containers. So containers leave empty and the vicious cycle continues. All this highlights the complexity of the supply chain and how difficult it is to put a finger on a single cause of the ongoing logistics issues.
