Shanghai aims to end lockdown in June

By Damian Brett

Shanghai is aiming to end the Covid lockdown that has heavily affected manufacturing output on June 1.

The city’s deputy mayor outlined a phased approach to lifting its lockdown and restrictions on movement started to ease after March 21.

The move comes as community infections reached zero for the third day, according to the South China Morning Post.

The logistics industry has been heavily affected by the lockdown’s impact on the production of goods.

Some factories have re-started operations in recent weeks but with reduced output due to the requirement that they operate under a closed-loop system.

In a recent results call, Kuehne+Nagel chief executive Detlef Trefzger said that the lockdown had reduced China’s production output by around 15%.

In response, statistics from Accenture’s Seabury Consulting show that in the first two weeks of April airlines reduced cargo capacity from Shanghai Pudong (PVG) show that in the first two weeks of April, cargo capacity  is 66.4% down on the same period in 2021.

Production is expected to ramp up quickly once restrictions are lifted, which should result in increased air cargo demand as companies look to quickly move goods to end market.

Trefzger expected that when the lockdown is eased production would quickly ramp up – within weeks – and how quickly supply chains from the city returned to normal levels depended on how fast carriers could re-add capacity back into the market.

Bruce Chan, senior analyst at investment bank Stifel, has also predicted a surge in demand when factories in Shanghai fully re-open.