Freight News, Sea

Covid shutdowns put more strain on supply chain

[ March 21, 2022   //   ]

Visibility specialist FourKites says that China’s zero-Covid policy is putting severe strain on supply chains across the country with factories and warehouses being frequently shut down for short periods and trucks sometimes being stopped from travelling.

At Shenzhen, normally the country’s second busiest port, volumes were sharply as authorities there have taken measures to stop the spread of Covid-19 in the latest outbreak.

FourKites predicts that some suppliers and carriers will move to other ports and take the hit of significantly longer over-land routes to get there. However, the situation is volatile and it’s impossible to predict whether — and where — there may be other Covid-19 restrictions.

With delays in other parts of the world, notably the US ports that Shenzhen serves, Covid-19 restrictions at the Chinese port may not represent the worst bottle neck. It may not be worth rerouting, if goods must sit on ships for two weeks anyway before they are able to depart for the US. Chinese lock-downs tend to be short lived and so waiting it out may also be an option for users of Shenzhen.

The fact that dwell times have not shot up as volumes have gone down suggests that shippers are becoming more agile in their reactions to supply chain issues. They are not simply changing routes – sometimes they are changing the factories they source from, to keep supplies moving.