This document will be updated throughout May with the latest China supply chain news
Update 26th May, 2022
With the majority of China seemingly over the worst of COVID lockdowns and restrictions beiginning to ease, the overall outlook is generally a positive one. However, this week the USA announced an import ban on goods from Xinjiang under the Uyghur Forced Labor Act in an attempt to fight forced labour in the Chinese manufacturing industry.
With Shanghai beginning to reopen and the overall situation seeing an improvement, Shanghai port sees itself at 95% capacity once again, as public transportation resumes provided a negative PCR test within 48 hours. Risk levels continue to upgrade and downgrade on a district by district basis.
Most warehouse and container freight stations have now reopened, with special permits still necessary for trucking. Labour volumes have improved with COVID cases rapidly decreasing, leading to higher productivity.
Congestion at the port continues to build at Shanghai's YS1 terminal as berthing vessels have been diverted from WGQ, where congestion is beginning to stabilise. Both terminals are seeing around 2 days delay in berthing.
Following a continued rise in asymptomatic COVID cases, 2 out of Tianjin's 16 districts have been placed in lockdown. As the Beijing situation worsens, roadfreight from Tianjin to Beijing is taking up to 5 days and costs remain on an upwards trend.
Heavy congestion of up to 2.5 days due to bunching and previous port closure. Residents in the area must still test every 2 days, whilst a shortage of truck drivers remains due to heavy restrictions on testing, leaving yards highly-utilised and equipment shortages.
Following a collision last week, vessel berthing and un-berthing has resumed as normal, with delays of up to 1 day expected.
Port operations were suspended in recent days due to bad weather, whilst the MaWan Channel has now reopened to two-way traffic berthing in Hong Kong. High yard utilisation following early May's Labor Day.
Update 20th May, 2022
Districts are being upgraded and downgraded risk levels dependent on case numbers as local authorities are slowly beginning to open more businesses.
Inland trucking for FCL, LCL and air is still limited with permits necessary. Air capacity remains low due to continued inbound flight bans, whilst ocean ports are still seeing heavy delays and congestion.
It was announced on 18th May that Shanghai will be opening a "green channel" to facilitate the import of key goods, from raw materials to finished products, in an attempt to keep supply chains moving. This will include fast-tracked quarantine procedures for vaccines, medication and other pandemic-fighting products. The new measure will also facilitate customs clearance for whitelisted companies.
The situation in Beijing continues to worsen, with 14 high risk areas (the only high risk areas in China) being identified on 19th May.
Asymptomatic COVID case numbers have been rising in the region, with mandatory testing until May 21st. Major transport routes in 3 districts have been closed due to the rising numbers. As the Beijing situation worsens, roadfreight from Tianjin to Beijing is taking up to 5 days and costs for this have doubled in a week.
Slight disruption on FCL, LCL and roadfreight as many drivers do not want to enter the area due to mandatory testing. Residents must be tested every two days and it is difficult for non-residents and truckers to enter the area.
mass testing round has been completed with no further restrictions imposed. Pick ups and deliveries are still being checked case by case as some factories remain in restricted areas. Ocean port operations are unaffected.
Mandatory testing remains in place. Ocean ports and ground handling at Shenzhen airport are operating as normal.
Update 16th May, 2022
The city announced that 15 out of 16 of Shanghai's districts have eliminated positive COVID cases outside of quarantine areas. The city aims to curb a rebound of COVID infections until 21st May as the situation improves, with its goal to resume life as normal from June 1st.
Average wait time for a berth at the port of Shanghai is 1.8 days.
April retail sales dropped over 11% from the same period in 2021, almost double the predicted fall rate, whilst industrial output dropped by just under 3% (National Bureau of Statistics).
One of the biggest challenges is moving goods within the country, as the government doesn't want truck drivers to spread COVID-19 to other areas.
The COVID zero stategy's impact is being seen further afield now, with the export of raw materials to countries such as Vietnam stunting the clothes manufacturing industry. The lack of availability for chips and semiconductors is having an increasingly visible impact on the technology market, with Sony lowering its sales targets on the PlayStation 5 in response to a slowdown in production.
Similar challenges have hit the automotive market, with production reduced as manufacturers see a shortage of supplies and materials despite workers living in 'closed-loop' factories. Storage of partly-built vehicles is also leading to a shortage of space. For instance, due to the cumulative pressures, Toyoya delivered only 1,500 vehicles from Shanghai in April compared to its 'normal' production line of 60,000 vehicles per month.
Shortages of Shanghai-manufactured Omnipaque, used in X-Rays, radiography and other medical scans, have heavily effected the US and Australian health sectors as production has struggled to meet demand, resulting in the need for re-sourcing from other regions as in some cases supply has diminished by 80%.
Update 13th May, 2022
Many areas of the city have been placed under "silent management mode" with boards or fences around buildings, restricting some workforce availability.
To minimise the disruption, those working in 'closed-loop' manufacturing facilities have been living on-site.
Over 9,000 large-scale enterprises are now operating at around 50%.
A new round of mass testing is to be held across most of the city as numbers continue to rise.
Update 11th May, 2022
Lockdown restrictions being lifted from today with commercial areas reopening for business. Some areas still restricted which is having an effect on workforce and output levels.
Update 9th May, 2022
Numbers still declining daily, with 4,300 new cases today. Local government hopeful that areas will be released from lockdown step by step over the next few weeks. Daily COVID tests still in place as more factories and production facilities are able to open. Roadfreight to and from the Shanghai's terminals continues to be difficult.
50 new COVID cases in the city today, with increasing signs that positive cases will continue to grow. Beijing airport has also reported cases and is seeing disruption with operations beginning to slow. A lack of container availability is affecting trucking, whilst the route between Beijing and Tianjin is also disrupted due to mandatory testing and trucker shortages.
City currently locked down, with an announcement expected in the next week on whether restrictions will remain.
Much of the city operating as normal, although COVID cases found at GZ airport have caused staff shortages and delays in departure.
Roadfreight still very difficult as truckers look to avoid tight testing restrictions and 14 days quarantine.
Operations returning to normal following 3 weeks in lockdown, although roadfreight is still seeing some dirsuption, particularly on deliveries from areas such as Beijing.
Yantai still blocked but the situation should improve over the next fortnight.
All other cities remain in a state of alert but are not under severe risk of disruption.
Update 6th May, 2022
Beijing announced closure of much of the public transport network as well as many of its public venues in an attempt to avoid a situation replicating that in Shanghai. Beijing International Airport remains open, however, the airport is suffering operational delays with added checks and shortages of workers on the ground.
COVID-19 cases in Shanghai continue to decrease, reducing consistently for over a week. From April 18th, in a controlled 'closed-loop' environment, many production facilities were able to recommence operations. Many more factories reopened on 5th May, although restrictions are limiting worker availability.
Many companies are moving their cargo through alternative hubs as congestion at Shanghai Airport remains high. Capacity at the airport is only at one third of the level of that in March 2021.
Update 4th May, 2022
One-way traffic management is being applied to all vessels berthing/unberthing via the Ma Wan Channel until mid-May. The works, related to the subsea pipeline construction at Urmston Road Fairway, have led to 1.5-2 day delays in berthing - coupled with the pre-labor holiday cargo rush, yard utilisation remains high at between 90 - 95%.
Heavy congestion exacerbated by port closures over the past week sees delays at 2.5-3 days.
Trucking is very difficult with drivers aiming to avoid the 14 day quarantine.
Lockdown announced for at least the next 7 days following cases being identified at Zhengzhou railway station.
Port closures in the past week have seen a moderate level of congestion build, with delays at 1-1.5days.
Congestion beginning to stabilise with only minor delays in berthing of up to 1 day.
Some cases of COVID-19 found at Guangzhou airport over the past 2 days - operations working as normal but with staff shortages leading to delays.
Heavy berth congestion across all terminals, with vessels being pushed to Yangshan from Waigaoqiao to alleviate delays.
Current delays of 3-5 days at Waigaoqiao terminals and up to 2 days for Yangshan terminals.
Around 5,000 daily COVID-19 cases with trucking still very limited.
Some factories are slowly resuming work.
Operations returning to normal following 2-3 weeks lockdown, although road freight remains difficult from outside areas such as Beijing.
See the full port update below:
This is a quickly developing situation. We will continue to keep you updated.
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