Déjà vu as Shenzhen locked down for a week
16/03/2022
Concerns of a rerun of congestion around Shenzhen, China’s third-busiest container port, have arisen after the city was locked down for a week from 14 March, after yet another Covid-19 outbreak.
Maersk Line’s latest customer advisory, dated 14 March, said that Shenzhen’s warehouses will be closed until 20 March.
All Shenzhen residents have been ordered to stay home, except to go for mandatory Covid-19 testing, meaning that ports will not be staffed. An earlier outbreak in May 2021 resulted in long vessel queues around Shenzhen sub-ports Yantian and Shekou for over two months.
Maersk noted, “Trucking service, for now, is still available, providing the drivers hold a negative Nucleic Acid Test (NAT) report requested by local governments. We foresee the overall trucking operational efficiency will be reduced significantly due to the frequent NATs, especially in Hong Kong, Shenzhen, West Pearl River Delta, Shanghai, Yangtze inland ports, Qingdao and Tianjin.”
APL Logistics said that its Shenzhen staff have begun working from home, adding that cargo handling services at all container freight stations and regional distribution centres in Shenzhen are impacted, these may include cargo receiving and container loading.
Xeneta’s chief analyst Peter Sand told Container News that liner operators are unlikely to divert to nearby ports in Guangdong province, such as Guangzhou and Nansha, if the lockdown lasts only a week, but action will be necessary if the lockdown persists.
Sand went on to explain, “Trucks from outside Shenzhen are unable to enter the city, and cross-border shipments from Shenzhen to Hong Kong will not move, unless they carry essential goods to Hong Kong. This (if the lockdown goes beyond a week) is serious – and it will push the strained supply chains to the limit again, and already worried shippers with cargo to-go out of South China will face more delays.”
The Chinese Communist Party’s secretary for Guangdong province, Li Xi, has urged Shenzhen authorities to maintain the supply chain of essential goods bound for Hong Kong, which is now experiencing a severe Covid-19 outbreak. China is sticking to a zero-Covid policy and besides Shenzhen, the northern province of Jilin has also been locked down.
Linerlytica analyst Tan Hua Joo told Container News that even if the ports are open, there will be limited factory production so cargo volumes will be very light.
“If containers are already loaded, then the carriers will still call to discharge the cargo otherwise they will have to incur diversion charges. However, if the port is shut, they will need to divert to the nearest port so that it does not disrupt the vessel schedules downstream,” said Tan Hua Joo.
