Impacts of Shanghai Shutdown on the Supply Chain

With the indefinite shutdown in Shanghai, carriers face a gap in the ability to pick up cargo and unload containers, while shippers are likewise facing challenges in producing and loading cargo. We expect our clients to continue to see delays and disruptions in the Chinese supply chain until the lockdown is lifted. 

In Shanghai, including Pudong and Puxi, the lockdown has been extended. As of the morning of April 10, 2022, additional rounds of COVID tests are required for the majority of Shanghai residents in both Pudong and Puxi. 

Sadly, current numbers as of April 10 show 26,000 confirmed cases found in Shanghai. Any residents who are within a community that has confirmed COVID cases must be quarantined at home for an additional 14 days.

Additionally, residents within a community that is next to a community with confirmed cases are required to be quarantined at home for an additional seven days. The majority of Shanghai residents will be quarantined at home for another seven days at least.

Critically, public transportation is still not available. Road access within Shanghai is limited to government vehicles and vehicles with road access permits. Companies applying for road access permits are subject to additional COVID testing requirements and safety procedures.

Commercial Trucks

Below are commercial trucks available to deliver shipments to Shanghai:

1. Trucks with road access permits may pick up and deliver strictly within Shanghai.
2. A small number of non-Shanghai trucks are permitted to deliver to Shanghai Airport (PVG). There are strict requirements for these trucks. Please check with us on a case-by-case for the possibility to pick up outside of Shanghai. If delivery to PVG is not possible, customers may always deliver shipments to other airports.
3. Non-Shanghai FCL trucks are allowed to deliver containers to Shanghai port, but there are strict requirements for these trucks.  

Thankfully, one of our trucking partners successfully acquired a road access permit during the lockdown resulting in pickup and delivery within Shanghai being possible. However, the cost of pickups within Shanghai will be much more expensive. We will quote rates for pickups and deliveries within Shanghai on a case-by-case basis, upon request. 

Key Restrictions

Below are the key restrictions regarding the alternative cities and ports.

1. There are confirmed cases in other cities, including Ningbo and Suzhou. City governments often lockdown the city and limit transportation in and out of the city. Regarding Ningbo, warehouses are already full and Suzhou is the best available alternative. 
2. Highway exits at a city in lockdown mode would have blocks checking for valid health codes and negative COVID test results. Drivers must have both to depart the highway and enter local traffic. Depending on each city, the validity of COVID tests range from 24-72 hours beginning at the time the test sample is taken. If a driver’s COVID test result is expired, the driver can return to origin or conduct a new COVID test at the roadblock test booth. Test results are available ranging from 30 minutes to a few hours after the test sample is taken. Drivers will be released to join local traffic only after the new test result is negative. Due to the checking and testing procedures, there is congestion at highway exits, and drivers may spend more than a day for short trips (one way) that used to take a few hours. For longer trips, it is normal that a driver would spend more than a day (one way).
3. Under normal circumstances, Shanghai seaport is more flexible than nearby seaports in terms of carrier, port and customs requirements, as well as penalties for violating these requirements.

Pending Pick Ups

The status on pending pick ups is updated, with the dates appropriately postponed:

1. Shipments that are already at our consol warehouse will be arranged to load and deliver to the terminal on the earliest available vessel, subject to the carrier not canceling sailing and skipping the Port of Shanghai.
2. Shipments that are already picked up and on their way to Shanghai will continue to be staged at hubs outside of Shanghai at least until April 14, 2022.
3. Shipments that are not yet picked up will not be picked up at least until April 14, 2022. 

New Shipments

For new shipments:

1. Air freight and urgent shipments to be picked up outside of Shanghai should be dispatched to other airports.
2. Air freight and urgent shipments to be picked up within Shanghai are to be dispatched at PVG.
3. Ocean freight shipments will be delayed for pick up until at least April 14, 2022.

As the lockdown unfolds, TOC Logistics will be bringing you the latest information as it becomes available so you can make the best decision for your cargo. We strongly recommend advance notice and planning if you find yourself dealing with delays caused by disruption in the Chinese supply chain. We encourage you to contact us for advice on mitigating any issues before they arise. As communicated above, we expect to have an update on or around April 14, 2022, regarding the length of time our customers can expect to see delays.