China’s Lockdown Effect on Global Supply Chain

It’s been two years since China first imposed its lockdown. Since then the country has been fighting the battle against COVID19. 

As the world starts to open up again, China again is imposing another lockdown.  The emergence of the highly transmissible omicron variant has complicated outbreak control and increased operational uncertainty. Local governments throughout China have attributed the recent wave of cases to the omicron subvariant BA.2.

According to BBC News – Shanghai will be closed in two stages over a nine-day period while authorities conduct Covid-19 testing.

For nearly a month, the major financial hub has been battling a new wave of infections, though the case count is low by some international standards.

To avoid destabilizing the economy, authorities have thus far refrained from shutting down the city of approximately 25 million inhabitants.

However, following Shanghai’s highest daily case count since the pandemic began on Saturday, authorities appear to have reversed course.

The lockdown will happen in two stages, with the eastern side of the city restricted until Monday and the western side restricted until April 1.

The lockdowns effect on global supply chains

Congestion in ports has increased as the world recovers from the pandemic. When combined with a variety of other factors, it adds up to the number of shipping delays.

Shenzhen recently emerged from a seven-day lockdown on March 21, and while port employees are permitted to work during the closure, limited trucking and warehousing availability has created supply chain issues.

Shenzhen may have escaped the worst of another Covid lockdown, but China’s fight against omicron is causing ships to back up along the country’s coastline. This forces carriers to adjust their schedules in order to avoid growing congestion problems. However, Ipek also believes that: “The new shutdown measures due to covid are expected to be short-term road bumps on a long up-trending road,”.

Aerial view of Deep water port with cargo ship and container

Managing cargo delays due to China’s lockdown

With China’s shutdown of its busiest ports, the global supply chain needs to find ways to accommodate the growing port congestion and deliver its cargo on time. 

Despite all of these challenges, McHugh & Eastwood is here to provide our clients with the support they need to get their shipments arriving on time and on budget.

It is essential to have the right global partners in place to manage your freighting logistics. McHugh & Eastwood is locally invested and globally connected, and we can guide your shipments whether they are couriering, freighting, or anything in between.

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locally invested.