Almost a third of the goods leaving the Port of Shanghai have been blocked due to a severe COVID lockdown. The delays are expected to worsen a global supply chain crisis that has already caused shortages and price increases around the world.
An economist from the Kiel Institute for the World Economy (IfW-Kiel) warned that Europe and the United States should expect longer import delays and shortages of electronic products from China due to the COVID lockdown in the commercial hub of Shanghai.
Vincent Stamer, an expert in global trade, told DW that exports from the world’s largest container port in Shanghai have dropped by almost a third.
“Three weeks after the start of the lockdown, around 30% of the goods that should be leaving Shanghai at this time are not,” he explained. “In other words, exports to the rest of the world are down by 30%.”
Shanghai exports in limbo
Stamer tweeted a chart showing that cargo volumes leaving Shanghai have fallen sharply, while volumes at other Chinese ports have remained flat. Other port data show that the average daily volume of 140,000 containers has dropped to 100,000 per day.
Shanghai is the epicenter of the biggest COVID-19 outbreak in China since the start of the pandemic more than two years ago. With a population of 26 million, the port city has been under a strict lockdown since March 28, forcing some workers to sleep in their factories.
Consumer electronics delays
Factories in the region surrounding Shanghai specialize in the export of consumer goods like tablets and televisions, as well as intermediate and high-end electronic components used in Western manufacturing. “It seems that production has slowed down in the Shanghai region and that products haven’t reached the port to be loaded onto container ships,” Stamer said.
Shipping delays increased despite assurances from Chinese officials that port operations would be minimally affected by restrictions.
Images shared on social media by sources like Marine Traffic showed the scale of the delays, with dozens of ships anchored off the coast of Shanghai with no cargo to load.
Stamer stated that the delays would be felt in Europe in about two months, as container ships take five to six weeks to travel from Shanghai to the Port of Hamburg in northern Germany, plus another two weeks for unloading and delivery.
Delays to fuel inflation
Stamer predicted that consumer goods would become more expensive this summer and noted that Germany could be one of the most affected countries, as nearly a third of maritime trade between China and Europe’s largest economy is shipped from the Port of Shanghai. He added that between 5% and 8% of trade between the two nations is currently delayed.
Germany’s economic representative in China, Maximilian Butek, supported the prediction, telling the dpa news agency on Friday that alternative delivery routes through other ports were not enough to absorb the loss.
Butek agreed that the port itself wasn’t the main concern — the real delays are happening in the transport of goods from factories to the port.
Supply chains already under strain
The new delays will undoubtedly worsen a supply chain crisis that has been building since the height of the initial global COVID lockdowns in spring 2020.
The pandemic initially shut down much of the global economy, forcing shipping companies to cancel schedules. This, in turn, left dozens of container ships anchored off the coasts of Western and Chinese ports, often in the wrong place.
As a result, more than three-quarters of the world’s ports have experienced abnormally long turnaround times in the past two years, according to Bloomberg.
Last year, the closures of two other Chinese ports — Ningbo-Zhoushan and Yantian — also worsened global production and retail shortages.
As a result, Germany’s economy grew by only 2.7% in 2021, instead of the forecasted 4.7%. Inflation also hit its highest level in nearly 30 years. Describing the global situation, Stamer told DW that around 12% of all containerized cargo worldwide is currently stuck on ships that are not moving. The normal rate is below 6%, while the highest rate ever recorded was 14% in late summer 2021.
Shanghai eases lockdown restrictions
On Friday, Shanghai authorities pledged to ease virus controls for truck drivers whose deliveries are being obstructed. The Associated Press quoted Deputy Mayor Zhang Wei as saying that the region was making “every effort” to resolve the crisis.
Truckers transporting goods to Shanghai have faced multiple checks and virus screenings, prompting some shipping companies and drivers to avoid the area altogether. The lockdown is slowly easing, and a new, simpler testing system will help drivers get to the port more efficiently, said Wu Chungeng, director of the Ministry of Transport’s Highway Bureau.
No quick fix
“My impression is that the delays may get a bit worse before they get better,” Stamer warned.
Photo by Samuel Wölfl: https://www.pexels.com/photo/stacked-shipping-containers-at-a-port-1427541/