Three-day mass testing gets underway for Shanghai’s 26m residents

Release date: 2022-04-07
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Three-day mass testing gets underway for Shanghai’s 26m residents

Three-day mass testing across Shanghai’s 26m residents kicked off today with the military drafted in to help in the huge exercise. Authorities in China’s commercial hub have declined to say when the city’s lockdown will end with the global logistics community desperate for more firm news out of Shanghai.

“The situation in China is almost akin to a black hole of information – likely because the actual conditions on the ground are also subject to a great deal of confusion and uncertainty,” the latest weekly container shipping report from Sea-Intelligence stated.

A record 9,000 more Covid cases were detected in Shanghai on Sunday, and while the port insists operations are carrying on as normal, it is clear that trucking capacity has been hugely cut over the past week of lockdown.

Moreover, a new subtype of the omicron variant was reported over the weekend in Suzhou, 80 km away from Shanghai, adding to concern that China’s zero-Covid strategy is not bringing the world’s most populous nation any closer to exiting the two-year long pandemic.

“The port of Shanghai is still operating, though at considerably lower productivity. Lack of dockworkers, due to restrictions, are impacting loading and unloading. Additionally, limitations and delays on trucking do affect container availability. In an effort to get around the disruptions, shippers are shifting their cargo to nearby ports such as Ningbo and ocean carriers are omitting Shanghai calls,” an update today from shipbrokers Lorentzen & Co reported.

Shipping consultancy Drewry said the situation in China is more like what happened at the start of the pandemic, whereby enforced factory shutdowns or slowdowns have created a supply outage.

“This is bad news for carriers as it chokes off the supply of goods and forcibly reduces demand for their services,” Drewry stated.

Analysts at Nomura said they expect additional shipping delays with the extended lockdown in Shanghai.

“Markets so far have underestimated the severity of the situation in China,” Nomura analysts said Thursday in a research note.

Shanghai International Port Group (SIPG) sought yesterday to play down fears of growing congestion at the port, claiming that berthing times today are better than the average time recorded throughout 2021.

Logistics providers and carriers have repeatedly pointed out that the real problem lies in the lack of trucking capacity.

“The overall landside transportation situation is dynamic subject to change,” Danish carrier Maersk stated in an update on Friday.

“Trucking service for now is still available in China main ports and nearby cities providing the drivers hold negative Nucleic Acid Test (NAT) report requested by local governments. Specifically, we foresee the efficiency of Maersk trucking service from/to Shanghai will be further impacted due to the lockdown on Shanghai,” Maersk added.

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