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Shanghai Covid-19 outbreak raises congestion concerns

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SHANGHAI : A new Covid-19 outbreak in Shanghai has given rise to concerns that the world’s busiest container port may see growing vessel queues.

On 21 March, just as the Chinese government lifted the lockdown on Shenzhen, Shanghai residents were ordered to work from home, while schools were shut.

Maersk Line is advising customers to self-service online, given the limited number of staff in its Shanghai office.

Warehouses in Shanghai remain operational, although drivers are requested to show a health code for cargo delivery. In addition, the drivers from medium-high risk areas need to show a negative nucleic acid test report within 48 hours and the drivers from non-risk areas need to show a negative nucleic acid test report issued from 16 to 20 March for delivering cargo from 21 to 27 March.

Lars Jensen, CEO of shipping consultancy Vespucci Maritime, told that any impact on Shanghai port will mainly depend on the scale and the nature of the operational slowdown. “To the degree that the restrictions impact the trucking capacity, that will impede diversions to Ningbo,” said Jensen.

Maersk Line noted that the overall landside transportation situation is dynamic and could change at any time.

Trucking is still available in China’s main ports and nearby cities, providing the drivers hold negative nucleic acid test reports requested by local governments.

Linerlytica analyst, Tan Hua Joo said that the bigger question is how will export and import volumes be affected.

Tan elaborated, “What we saw from the Shenzhen lockdown was that export volumes were down while ports remained open and this did not result in an increase in port congestion initially. Congestion only builds up when export volumes increase or when imports are affected by yard congestion and lower port productivity.”

Linerlytica analyst concluded, “If there’re any restrictions at Shanghai, then diversion to Ningbo will certainly be an option.”

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