China has been implementing Zero Covid measures, with immediate lockdown directives, this time with an entire province’s population limited to their homes. Further, with the lockdown that also means that manufacturing factories have temporarily ceased operations which has a great impact on supply chain processes and implications towards shipping disruptions.
How these will impact and cause shipping disruptions is through not only the changes in the supply chain, but also with port activity, as well as with trucking restrictions in terms of vehicles travelling in and out of the locked down cities.
Previously, when China enacted their “Zero COVID” initiatives back in 2021, it involved a month-long lockdown between the months of May and June. This cause unprecedented clogs within global supply chains which took many months to sort out the bottlenecks. Whiles the world is still trying to bounce back to pre-COVID levels, the recent Ukrainian/Russian conflict has taken a toll as well. With the additional Chinese lockdowns, global supply chains will have to prepare for more delays and backlogs as more unprecedented delays are to be expected.
Key manufacturing hub such as Shenzhen, Dongguan, and Changchun are part of the areas that are within the lockdown areas whilst financial center Shanghai is also affected. One of the biggest concerns would be the operations of shipping ports within Shanghai and Shenzhen, should COVID numbers increase and blocks be lockdown, as the Zero COVID measures are geographically assigned.
As critical global supply chain container hubs, Hong Kong and Shenzhen plays a crucial role should more shipping disruptions occur due to the China lockdown restrictions. As the port delays have not diminished the new disruptions have only increased to the congestions which has caused concerns to existing global supply chain woes which in turn will be felt around the world in terms of freight rates yet again.