Update to the Growing Congestion in China

With growing delays and congestion in China, Stockwell International would like to give you some clarity on the issue.

Experts are warning that the recent lockdowns in China is about to send another shock through global supply chains. Currently nearly one-third of the population is under some sort of lockdown, with shops shut and factories struggling.

A Nomura survey has shown that at least 373 million people in cities contributing to 40% of China’s GDP have been affected. An index tracking freight traffic in China dropping by about 25% during the first week of April.?

Shanghai, home to the world’s largest port, has remained open, however trucks are struggling to unload cargo due to strict permit regulations, causing shipping containers to stack up. According to Jon Monroe, an ocean shipping and supply chain expert said once lockdowns end, there’s going to be an “overwhelming movement of goods” that cripples supply chains.

Other industry professionals are saying they don’t see any immediate end in sight to production and logistics disruptions in the country either.

“The supply-chain situation in Shanghai continues to worsen. The port is running out of capacity for some types of cargo as importers cannot collect their goods,” Lars Jensen, CEO of shipping industry advisor Vespucci Maritime. “With the outbreak in Guangzhou also leading to shutdowns there, the impact on export volumes out of China will grow larger.”

Loadstar, a supply chain publication, on April 19 reported that about 506 containerships were waiting off Chinese ports, an increase from 260 halted offshore in February.

Globally the impacts of these lockdowns are being felt in ports in Europe and the US where they are bracing for the wave of backlogs starting to ease in Chinese ports. Some ports in these areas are reportedly experiencing additional disruption as shipping operators adjust routes. An example of this is the US ports of Los Angeles and Long Beach, which already suffer significant delays and capacity constraints, have reportedly seen a combined 35% increase in containership backlog.

As delays continue to build and understandably frustration begins to mount, Stockwell International are endeavouring to alleviate as much stress and pressure as possible. If you have any further questions, please contact?[email protected].