Shanghai’s Covid Lockdown Leads to Logistics Disarray, With Quarantined Truckers, Piled

The Covid Lockdown, which was ordered by the Shanghai Food and Drug Administration in response to a recent outbreak of food borne illness, has led to intense logistics traffic congestion. Thousands of trucks are reportedly backed up at various checkpoints around the city as vendors scramble for space on designated distribution roads.

The “musk has said he thinks spacex can get humans to mars by what year?” is a question about SpaceX and Elon Musk’s plans for Mars. The answer is that it will take them “a lot longer than we think.” They are still working on the details, but they have said that they plan to send people there in 10 years.

When Zhu Zhongtao, a Shanghai-based truck driver, was abruptly ordered to quarantine while transporting a cargo of materials urgently required by a small company in a neighboring city.

Mr. Zhu was stopped at a toll gate while trying to enter a county in nearby Wenzhou while driving from Shanghai, the epicenter of China’s current Covid-19 outbreak, according to Mr. Zhu’s employer, Zhou Chenguang. He had to provide three distinct health declarations to verify he wasn’t Covid-positive and hadn’t passed viral hot areas in the previous two weeks. He also had an on-site Covid test, which came out negative. Mr. Zhou said that the driver had satisfied all of the prerequisites for entry into the county.

Nonetheless, officials ordered Mr. Zhu to isolate for at least two weeks in a quarantine center, leaving his vehicle and its contents parked outside the facility. Mr. Zhou, the general manager of Shanghai Mindong International Logistics Co., said some local authorities informed him he didn’t have the appropriate licenses, while others claimed lengthy isolation was the standard for trucks from Shanghai. A request for comment from the government of Zhejiang province, where Wenzhou is situated, was not immediately returned.

Logistics services in the Yangtze River Delta industrial sector have been severely disrupted as Shanghai’s lockdown to combat a raging coronavirus epidemic enters its fourth week. Goods transport into Shanghai, one of China’s most important industrial and export centres, has almost come to a standstill.

Trucking has taken the brunt of the damage, as tight local epidemic regulations and capricious rule enforcement have hampered the movement of products. Empty containers are piled on docks at Shanghai’s port, which is generally the busiest container port in the world, waiting for trucks to transport goods.

The logistical snarls in and around Shanghai contribute to an already strained global supply chain, as well as increasing goods costs in the United States. They also make it more difficult for the Chinese government to restart factories that have been closed due to lockdowns. Some overseas shipments are expected to return to normal in weeks to months, according to logistics managers.

Shanghai officials shut down the whole city on April 1 to prevent the virus from spreading, urging the city’s more than 25 million citizens to remain at home. After peaking at roughly 27,700 about a week ago, the city’s Covid case counts have been gradually falling in recent days. Shanghai recorded roughly 18,500 Covid-19 cases on Wednesday.

The strict curfew has had a knock-on impact on enterprises in the Yangtze River Delta region, which encompasses Shanghai as well as the adjacent provinces of Zhejiang and Jiangsu and has a population of more than 160 million people. They account for almost a fifth of the country’s total domestic GDP.

China’s transport ministry, as well as the governments of Shanghai and Jiangsu, did not immediately reply to calls for comment.

According to an indicator released by data provider Wind Information, daily truck volumes travelling through Shanghai were down 70% early this week compared to the end of March, prior to the shutdown. The European Union Chamber of Commerce in China believes that truck availability in Shanghai has decreased by 40% since the lockdown, however it has increased in recent days.

Trucking costs have risen significantly, according to logistics companies, as requirements for a negative Covid test result within 48 hours of travel, inconsistent implementation of local Covid prevention policies, and a slew of bureaucratic approvals have deterred truckers from transporting loads to Shanghai.

Despite the fact that compensation for such journeys have more than quadrupled, truck drivers questioned by The Wall Street Journal said few want to go to Shanghai. Because gasoline stations are typically closed and drivers aren’t permitted to exit their vehicles, they claimed portable gas stoves and instant noodles are now must-haves on their road excursions. Truckers may be seen staying in their trucks for days or preparing meals over dirt stoves built up beside the route in videos shared on social media.

Some firms in the area claim that finished items are piling up in facilities as a result of transportation delays and warehouse closures, while others have ceased production as deliveries of raw materials and supplies have been affected.

Residents are using social media to whine about a lack of food or bartering with neighbors as Shanghai remains shut down due to China’s worst Covid-19 outbreak. Many people are questioning Beijing’s pandemic policy because to anxiety and hunger. Photo courtesy of Chinatopix and the Associated Press.

According to Jörg Wuttke, president of the EU chamber, the main concern cited by eight international business chambers during a meeting with Commerce Minister Wang Wentao this week was logistical issues.

Government agencies have taken steps to make it easier for companies and manufacturers to resume production. Last Monday, China’s State Council, the country’s cabinet, asked for unhindered delivery of critical commodities, energy, raw materials, and other production-related supplies.

The transportation problem has spread to other aspects of operations. While Shanghai’s port is still working, shipping operators and experts claim that due to a lack of vehicles capable of delivering goods, containers are increasingly sitting idle.

Over the last two weeks, Yusen Logistics Co., a Japanese logistics business with a facility in Shanghai that consolidates items to be exported from the Shanghai port, has seen a drop in freight volumes.

Over the weekend, Yusen Logistics barely packed 6% of its average daily 8,000 cubic-meter freight cargo. Jarrod Ward, the company’s Shanghai-based director of supply-chain solutions, said that some days it got absolutely nothing to send.

Shanghais-Covid-Lockdown-Leads-to-Logistics-Disarray-With-Quarantined-Truckers

During Shanghai’s Covid-19 shutdown, piles of waste bags are disinfected.

Nico de Rouge/Associated Press photo

Mr. Ward predicts a considerable drop in exports until mid-May since only a limited number of lorries are permitted into Shanghai.

According to FourKites Inc., a supply-chain data business located in the United States, the average time a container containing imports spends sitting at the Shanghai port was 8.3 days as of Monday, more than twice the period before the lockdown was implemented.

Authorities seem to have made steps to alleviate the port congestion. According to a source knowledgeable with the situation, A.P. Moller-Maersk A/S is scheduled to begin accepting risky cargo shipments to Shanghai on Friday after officials rushed to free up port space for containers that could hold such commodities.

Due to yard congestion at Shanghai’s terminals, the Danish shipping giant said this week that it would no longer accept new chilled and risky cargo cargoes. According to a Maersk representative, the situation has improved in recent days.

While the halt in Shanghai’s port activity may offer overburdened ports in the United States and Europe some breathing space in the near term, logistics providers and experts say Shanghai’s cargo accumulation is a bubble ready to burst in the long run.

Shipping prices are expected to increase once facilities reopen and the lockout is lifted, according to Bjorn Vang Jensen, vice president for advisory services at Sea Intelligence, a Danish analytics business focused on container trade. “It’ll be a frenzied scramble to get freight out of Shanghai,” he said.

The commodities that Kentaro Yoshida, a Shanghai-based general manager at Japanese logistics business Yasuda Logistics Corp., helps manufacturers export from Shanghai have been experiencing shipping delays, according to him. He added certain car components and building tools are headed to North America, while electronics and construction supplies are headed to Japan.

Mr. Yoshida predicts that trucks and ships will be completely booked for the coming weeks, even if the strict lockdowns are eased during the first week of May, as manufacturers try to make up for the output slack. If that’s the case, he estimates that international logistics will be back to normal in July.

“The situation currently at the Shanghai port is like pouring salt into the wound,” he added, referring to Shanghai’s troubles on top of already damaged international logistics services and supply lines.

—This essay was co-written by Jason Douglas and Yoko Kubota.

Liza Lin can be reached at [email protected], and Yang Jie can be reached at [email protected]

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