China is again the most important supply chain story of the week and will likely remain so for months. Much of the news is centered around not just the present disruption, but the long-term impact what’s happening will have. Fears about what’s to come are building among ports and importers.
According to the Washington Post, “An estimated 373 million people — or about one-quarter of China’s population — have been in covid-related lockdowns in recent weeks because of what is known as the country’s zero covid policy.” Some companies are looking to source from other countries with important holiday deadlines fast approaching.
Even with the lockdown in Shanghai, the situation remains normal in terms of blank sailings—at least for now. Interestingly, in comparison to a lockdown at the Yantian port last year which caused an increase in blank sailings, so far there has been a decrease in blank sailings in Shanghai.
Despite that good news, before the industry gets its hopes up, the situation could change drastically if lockdowns and closures persist. The positive data is not exclusive to blank sailings. Wait times for export containers in Shanghai have decreased as well, although this is partially due to fewer containers reaching the port. On the flip side, there has been an increase in wait times for import containers, although not a significant one.
Rising inflation didn’t slow down US imports from Asia, at least in the first quarter of 2022. In fact, volume increased, and so did the backlog of ships in East and Gulf Coast ports. If a recent forecast from the National Retail Federation proves to be true, imports can be expected to increase or stay flat for the second quarter on a year-over-year basis. If so, terminals will continue to struggle with cargo volumes.
