Shanghai’s lockdown intensifies pressure on supply chains. The uncertain market is an ”extreme challenge,” says CEO from logistics company NTG. Hapag-Lloyd only brings half of the usual freight volumes out of the major Chinese city.
Photo: Aly /Ritzau Scanpix
The recent five weeks of lockdown in major Chinese city Shanghai makes it an even bigger challenge for both carriers and logistics firms to operate on an already unstable market with limited capacity.
Lately, customers as well as freight companies have seen renewed pressure on supply chains due to the Chinese lockdowns. This is also the case at logistics company NTG, which struggles to find space onboard ships.
”The recent lockdowns have put further pressure on supply chains – particularly on rates and capacity within sea freight. We have a clear expectation that the pressure will increase,” says Michael Larsen, chief executive of NTG, in an interview with WPO.
NTG has just presented its quarterly figures showing progress within all key items. And this despite – or perhaps thanks to – the chaotic conditions.
The progress occurs on a market marked by a strong pressure on capacity , and as NTG writes, the recent lockdowns may become a ”potential trigger of further congestions in the near term.”
It’s an extreme challenge to our staff
MICHAEL LARSEN, CEO, NTG
Larsen points out that it is difficult to find out what is currently going on in Shanghai. The situation is yet another example of the transportation market’s present unpredictability.
”It is difficult to say what will happen going forward, because every time one believes to be in control of a certain situation, then something like this comes along, and then you start over,” states the NTG CEO.
Larsen and his employees see a market characterized by ”weekly fluctuations and changes,” and logistics firms such as NTG thus have to demonstrate their ability to adapt.
”It’s an extreme challenge to our staff, no doubt about that. It’s a daily struggle to find the capacity that allows us to ensure that our customers have their supply issues solved.”
Lack of truck drivers
German container carrier Hapag-Lloyd reports that only half of the cargo normally coming out of the Shanghai region is currently loaded at the carrier’s ships.
This is because factories are closed or products cannot be manufactured.
In a written reply to WPO, Hapag-Lloyd stresses that the port of Shanghai – like all Chinese ports – operates normally, and that the waiting time for the carrier’s ships is only roughly 48 hours.
”However, the city’s lockdown outside the terminals has had an impact on the port,” writes the carrier.
The situation also affects cargo entering Shanghai, because although it can be handled normally in the port, there is currently a 50 per cent shortage of truck drivers to fetch the freight.
Overall, Hapag-Lloyd states that is has become ”more complicated” to operate in Shanghai due to the lockdown.
