Shanghai, which has been shut down for weeks and caused chaos in logistics chains, is heading for a gradual return to normal. But it could take significantly longer before container traffic sees stability return, says shipping analyst.
Photo: Hector /Ritzau Scanpix
Shanghai, which has been shut down for weeks due to Covid-19, has just presented plans to return to more normal conditions and thus the end of a lockdown that has had very clear consequences for container logistics, among other things.
But according to Xeneta chief analyst Peter Sand, the outlook to a more normal Shanghai, in terms of the container industry, might be a significantly farther-off prospect.
We won’t have a normal Shanghai, as I understand it, in just two weeks. It’s more likely to take two months
Peter Sand, chief analyst, Xeneta
Authorities in the major Chinese city seek to initiate a gradual reopening starting on June 1, according to vice mayor Zong Ming, as cited by Reuters. Until then, the same rules and requirements will apply in order to avoid a potential surge in infections, reports the news agency.
”From June 1 to mid- and late June, as long as risks of a rebound in infections are controlled, we will fully implement epidemic prevention and control, normalize management, and fully restore normal production and life in the city,” he said.
But even though operations at the world’s largest container port have been able to continue – though at a slow pace – transport into and out of the terminals has been affected, and it could take a long time to get completely back to normal, according to Sand.
”The biggest problems have been tied to onshore logistics such as trucking, which must be completely set free in order for us to return to anything resembling ’normal’. But all factories must also reopen. Supply chains going into factories must be reestablished, so products can be finished. We won’t have a normal Shanghai, as I understand it, in just two weeks. It’s more likely to take two months,” he tells WPO.
100 ships waiting in line
The number of ships waiting off Shanghai has also been significantly impacted during the shutdown. According to Japanese liner company ONE, Thursday saw more than 100 box ships queuing up outside the container port.
The wait has also caused many shippers to look for alternatives.
”China’s zero-Covid policy is causing huge problems for shippers across the world – they are all held hostage during lockdowns, like we have seen in Shanghai, in particular, since late March, but also many other places in China,” Sand says.
”It affects imports in Europe, North America and internally in Asia, to a great extent. Even though there clearly are lessons learned from previous shutdowns, things can still get much better. When the world’s largest and most important manufacturing industry is locked down indefinitely, customers start thinking about alternatives to avoid being impacted again.”
