Update on the impact on global supply chains
The pandemic situation in Shanghai and other major Chinese cities remains tense. This continues to impact global supply chains in air, sea and land transport. We would therefore like to give you an overview of the current situation in China and other regions:
Covid-19 restrictions through area lockdowns, daily mass testing, followed by extensive quarantine measures that have resulted in significant driver shortages in land transportation remain critical factors. Although exports are down due to the pandemic-related closure of production facilities and the recent Labor Day holiday in China, alternative ports and airports throughout northern China are operating to their limits. In general, the industrial sector must be prepared for further bottlenecks, and this applies to all economies with sources of supply in China. The resulting unreliability of shipping line schedules is currently proving to be one of the biggest challenges on all global trades, with no improvement in sight.
In addition, with a resumption of production in China expected for the second half of May or early June at the latest, the handling situation at global ports and airports will certainly intensify. The pressure on equipment and capacity availability and rate levels might then increase considerably again.
Current situation in China and other regions at a glance
China
Although most Chinese ports remain in regular operation, limited truck capacity continues to be a challenge. In Shanghai, inter-provincial truck traffic remains difficult and requires special permission. There is currently an improvement in the situation as compared with previous weeks. Sea cargo CFS warehouses and depots are slowly reopening and more trucking permits are being issued CFS capacity in Ningbo and Qingdao is currently under pressure as cargo flow from neighboring provinces have increased tremendously. Ocean carriers are increasingly calling Ningbo on an ad hoc basis, affecting the port's productivity and congestion as vessels are slowed down. Due to the change in port calls, services are repeatedly disrupted. Once the lockdowns are lifted, equipment shortages might be the result.
The main airports in China remain congested and overcrowded, especially in the import sector. Shanghai PVG airport continues to be affected by flight cancellations during the lockdown, although a gradual recovery can be seen. Many flights continue to be routed to alternative airports, including Zhengzhou (CGO), Beijing (PEK), Shenzhen (SZX), and Hong Kong (HKG). This is increasingly causing backlogs and longer turnaround times at the import terminal due to limited manpower.
In this challenging market environment, DACHSER is extending its charter program to increase capacity on the crucial trade lane Shanghai - Frankfurt. Additional weekly flights of 33 tons each on Wednesday and Friday to expand DACHSER's Air network until April 2024. By using this program, DACHSER's air freight customers have access to additional capacity they can count on, especially now that the trade routes between Asia and Europe have suffered due to the lockdown in Shanghai.
Northern Europe
The Port of Hamburg continues to operate at its limit, with shortened time windows for cargo acceptance affecting deliveries and pick-ups. Bremerhaven is also facing cargo backlogs. The ports of Antwerp and Rotterdam are under pressure as well.
USA
The ports continue to be congested. Truck capacity and terminal infrastructure continue to be stressed. Consequently, there has been a decline in the situation of trucking and inland/rail transportation. An upcoming strike by longshore workers on the USWC may cause further disruption of the supply chain. Current contracts expire in June.
It is highly recommended to consider different routings to avoid USWC ports now and in the foreseeable future.
Mexico
Vessel delays and schedule integrity issues are affecting inbound cargo flow ex Europe.
Eastcoast South America
Brazil
Vessel delays and port omissions are indirect impacts of measures associated with COVID-19. However, no major congestions are directly affecting logistics. In light of the current situation in China, we could soon see an impact once cargo volumes return.
Argentina
Suppliers have not yet returned to regular operations as they are still operating with reduced capacity. Terminals are operating with reduced staff, so pick-up / transfer can be delayed.
Westcoast South America
Chile
The port terminals in Chile San Antonio are working with only 60% of the capacity, so terminal and inland operation is limited.
Peru
There are currently no impacts or restrictions.
We will keep you informed about further developments. Local representative at DACHSER will be happy to answer any questions regarding shipments and possible alternatives.