(RepublicanPress.org) – Beginning in March, officials in Shanghai locked down the city in response to what they call the worst outbreak of COVID-19 since the start of the pandemic. Unfortunately, the extreme lockdowns are reportedly causing major problems in the city’s supply chain. Shanghai is one of China’s largest manufacturing and export locations, and the movement of goods into the area has all but stopped. The biggest hit has been in the trucking industry.
Leading Up to the Shutdown
COVID-19 case numbers soared in Shanghai from the Omicron variant in March, prompting authorities to ask over 25 million residents to stay in their homes in an effort to mitigate the spread. However, the order did not come without consequence. Although the coronavirus case numbers decreased among citizens, businesses in the area suffered from the lack of workers.
The Yangtze River Delta region was hit especially hard, as well as the Zhejiang and Jiangsu provinces next to the area. The entire district includes over 160 million people who represent almost one-fifth of the nation’s gross domestic product (GDP).
Effects After the Restrictions
According to Wind Information, trucking volumes in the area in April were down about 70% compared to the numbers pre-lockdown. Plus, trying to get a truck in Shanghai is difficult as well, with availability down 40%. The problem, as reported by The Wall Street Journal, is partially due to the fact that truck drivers simply don’t want to drive to the city.
Restrictive requirements like negative COVID tests, ridiculous red tape approvals, and drivers trapped in their trucks without the ability to step out make the job not worth the money. Some truckers are even living in their vehicles for days to deliver goods.
Because of the trucking delays, items are stockpiling inside factories with nowhere to go. That’s because the Shanghai problems don’t end with the trucking industry; they extend to the warehouses as well, with many of them closed because of the strict lockdowns.
When Restrictions End
Lifting the mandate in Shanghai will not immediately solve the rippling effects of the COVID-19 mitigation measures. According to FourKites Inc., shipping containers in Shanghai are sitting idle for an average of a little over eight days. Some say the cargo problem is a bubble that will burst at some point and cause a logistical nightmare. Vice President of Sea Intelligence, Bjorn Vang Jensen, said that once factories begin working again, it will be a “mad dash” to get everything out of Shanghai as fast as possible.
Kentaro Yoshida, a logistics expert, stated even if authorities lifted the restrictions today, the supply chain problem likely wouldn’t return to a relatively normal state until well into July.
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