Shanghai would go into staggering lockdown starting today, China declared on Sunday, marking the city’s largest lockdown since the Covid outbreak began more than two years ago.
For shipping, congestion at the port, which is already very high, is expected to worsen in the coming days, while terminals in Europe and North America will have to brace for an even greater whiplash effect once the city returns to normal productivity – and this comes as global supply chains deal with the fallout from a seven-day lockdown in Shenzhen, to the south, earlier this month.
For the new two-part lockdown, the authorities have opted to split Shanghai in half using the Huangpu River. On Saturday, the city reported 2,631 new asymptomatic cases, accounting for roughly 60% of China’s total new asymptomatic cases, as well as 47 new instances with symptoms.
The eastern half of the city, Pudong, will be under lockdown from today until Friday when mass testing begins, while the western area, Puxi, will be on lockdown from April 1 to 5.
Work at most factories, as well as public transportation, will be halted. The stay-at-home order will not apply to essential workers, such as port workers.
Lars Jensen, CEO of consultancy Vespucci Maritime, commented on the implications for container shipping on LinkedIn, saying,
“If this is widespread it will mean demand slow-down in the short term and downwards spot rate pressure, followed by a surge and upwards pressure.”
“Obviously, this disrupts the flow of containerized cargo, when truck drivers must pass many Covid tests to do they jobs. And the closure of factories this week is not improving a situation that has soured for most of March,” commented Peter Sand, chief analyst at Xeneta, going on to predict a likely further softening in spot rates in the coming weeks.
“Global shippers would prefer more predictable and reliable supply chains to more obstacles and falling rates,” Sand said.