Shanghai Covid trucking restrictions see sustained pressure on airfreight

By Rebecca Jeffrey

Shanghai is back in business following a Covid lockdown but additional quarantine measures have resulted in trucking restrictions and staff shortages that are further battering airfreight supply chains.

Infections recorded following the formal end to lockdown in the city on June 1 has seen some areas return to Covid restrictions, temporarily restricting traffic and road access to trucks carrying airfreight in and out and around Shanghai. Covid testing requirements have also led to staff shortages. Beijing has also started mass testing again after an outbreak in the city.

Dimerco’s June 13-26 Air-Ocean Freight Market Forecast for shows that a “manpower shortage” in Beijing due to the pandemic has “caused at least 1 day delay”.

The logistics company added: “The amount of exported goods from other provinces to Beijing decreased significantly due to traffic restriction.”

Asia to Intra Asia space is “soft” at Shanghai Pudong (PVG) while the rate is falling. Meanwhile, there has been an “upturn” in Asia to US/CA space at PVG and the rate is stable.

Asia to Europe PVG space is “tight” and the rate is stable.

CNBC reported that highway closures due to quarantine have stopped trucks loaded with export goods from entering the Port of Shanghai, according to logistics company Orient Star Group. Cargo has been redirected to Ningbo, which is now becoming congested, or other small ports along the Yangtze River.

Air Cargo News reported on a backlog of shipping containers at the Port of Shanghai last month. Congestion had begun easing at the port, but additional pressure could see issues mounting again.

DHL Global Forwarding told CNBC there is still a shortage of truckers in and out of the Shanghai area, while Seko Logistics said testing rules remain a challenge with capacity yet to return to its pre-lockdown level.

Elsewhere in Asia, logistics is looking rocky in South Korea, where according to Dimerco, thousands of truckers are striking to protest against rising fuel costs. The strike is “disrupting production, hitting port activity, and posing new risks to a strained global supply chain”.

Port congestion with truck shortages is continuing in North America. Dimerco noted: “Expect the congestion to worsen once Shanghai returns from lockdown. Feeder capacity from Asia Base Ports to other Asian Out Ports remains limited.”

Both these issues have the potential to further exacerbate pressure on airfreight.