China’s Covid spike threatens the global supply chain

Queues of container ships outside major Chinese ports are lengthening the day as the Covid-19 outbreak in export manufacturing hubs threatens to unleash a wave of global supply chain shocks. ship owners, logistics companies and analysts said.

hina is experiencing its biggest spike in Covid-19 infections since the initial outbreak in the central city of Wuhan was contained in early 2020.
The spread of the highly infectious variant of Omicron this month led to movement control across China, including in the main manufacturing hubs of Shenzhen and Dongguan, paralyzing the The factory produces goods from flash drives to car parts.

According to shipowners, analysts and supply chain managers, while China’s main ports remain open and ships are continuing to dock, congestion is increasing and some container ships are routing to avoid expected delays, according to ship owners, analysts and supply chain managers.

They said charter rates are expected to increase, while delays for freight are expected to be longer.

Jasmine Wall, Asia-Pacific regional director at SEKO Logistics, said container volumes are “decreasing massively” at Shenzhen’s Yantian port, the world’s fourth-largest container terminal, driven by port workers, finance and logistics. truck drivers and factory workers at home.

Lars Jensen, CEO of Vespucci Maritime, a container shipping consultant, said: “This shows that it will become difficult to move goods to and from the ports and hence the portability of the terminals. whether to open or not will become a point of debate.

“It will have a disruptive effect on the supply chain, thereby prolonging the current supply chain crisis.”

There are currently 34 ships off the coast of Shenzhen waiting to dock, compared with an average of seven a year ago, according to ship-tracking Refinitiv.

In Qingdao, a port city in eastern China, there are about 30 ships waiting to dock, compared with an average of seven last year.

According to the Freightos shipping index, charter rates per 40-foot container remain near all-time highs on global shipping lanes, trading at around $16,000 on the US-US West Coast and close to 13,000 USD (12,000 euros) from China to Europe.

Similar Covid outages last year cut operations at Yantian to a third of capacity. China’s Covid spike threatens the global supply chain

Fry Electronics Team

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