Maersk Advises Shanghai Lockdown Will Spark Rise in Transport Fees

A COVID-19 lockdown in China's commercial center Shanghai, according to global shipping giant Maersk, is expected to slow delivery times and increase transport costs.

Source: Insider | Published on March 30, 2022

"Trucking service in/out Shanghai will be severely impacted by 30% due to a full lockdown on Shanghai's Pudong and Puxi areas in turn until April 5th," the shipping company said in an advisory statement posted on its website on Monday.

"Consequently, there will be longer delivery time and a possible rise in transport costs such as detour fee and highway fee," the statement added.

The Shanghai lockdown is reminiscent of the beginning of the pandemic, when the global supply chain was thrown into disarray after factories in China were shut down and health regulations disrupted ship movements.

Shanghai is currently a hotspot for COVID-19 cases, and strict lockdown measures were implemented this week to combat the city's rising cases. It has been divided into two sections along the Huangpu River in order to allow for mass testing. Those living east of the river are currently imprisoned, while those living west of the river are subjected to testing. A four-day lockdown for residents west of the river will begin on Friday, when testing in the east begins.

According to Reuters, the city had 4,381 asymptomatic COVID-19 cases and 96 symptomatic cases on Monday.

Maersk stated that all warehouses in Shanghai would remain closed between March 28 and April 1, and that a number of depots would be closed beginning March 28 "until further notice."

Due to labor shortages, the shipping company also stated that air cargo would be impacted.

According to The New York Times, China accounts for roughly one-third of global manufacturing.

A number of factories are also affected by the latest Shanghai lockdown. According to Insider's Urooba Jamal, Tesla's Shanghai Gigafactory is halting production for four days due to its location in the city's first lockdown zone.

China also shut down other export hubs, including Changchun and Shenzhen, earlier this month, according to Reuters. Although restrictions in Shenzhen have since been lifted, the outlet reports that a number of small businesses in the area have been impacted by disruptions in the supply chain.

Are you a retail Agent Looking for a Quote?