Viewpoint: Keep an eye on Shanghai

According to HLS Holding’s latest email to clients, “The result of the disruption in Shenzhen and Shanghai is impacting container turnaround. … CMA equipment shortage is now deteriorating at many origin ports, so CMA likes to push more SOC business from Shanghai and Ningbo to PSW. … Once the lockdown in China is lifted, the huge backlog of delayed containers will fill the vessels and make space tight again.”  

The company also cautioned that as a result of the restricted trucking services and labor shortages, shippers should be bracing for “skyrocketing haulage costs.”

But it was its update on Shanghai that was the most alarming.

“Shanghai: The quarantine area has been further expanded with dynamical changes. The city is organizing massive nucleic acid testing, and COVID test reports valid for 48 hours are widely required for almost all public activities.”

According to MarineTraffic, there is an uptick in anchorage time off the port. This is based on the decrease in the workforce.

MarineTraffic tells American Shipper the number of container ships waiting off port limits (OPL) outside Shanghai has increased. As of Thursday, 57 container ships are waiting outside port limits, whereas two weeks ago there were just 27 box ships.

“In just a month, over 100,000 additional containers capacity is strung waiting outside Shanghai,” says Alex Charvalias, supply chain in-transit visibility lead at MarineTraffic. “We also see a number of bulk carriers waiting outside the port too.”

While the drop of container volume post-Chinese New Year may be over, you can see the hiccups these restrictions are presently having.

If the disruption indicators show how a targeted one-week shutdown in Shenzhen impacted the Port of Yantian, the expansion of restrictions in Shanghai needs to be monitored closely. The region is in its second week of targeted restrictions and Shanghai is the world’s busiest container port. Don’t let the rhetoric of “normal ocean terminal operations’” blindside you. The “zero-COVID” bubble at the port may be intact because you have workers living there. Outside of that bubble, you have an iron fist choking trade.