The Chinese city of Shanghai has been put on an extended lockdown, which is causing further uncertainty over Chinese supply chains. The Chinese government has placed severe restrictions on the eastern half of the city that were supposed to be lifted as of April 1st, however the easing of restrictions didn’t happen and nearly all of Shanghai remains on lockdown.
Local authorities have not provided a timeframe for the end of the lockdown as the entire city of 25 million is being tested.
Most residents are unable to leave their homes, even for necessities such as food. However, the container port is operating under what’s referred to as a “closed loop.” This means workers sleep on site and do not leave the port.
The extended restrictions have led to reduced trucking capacity as well as the closures of warehouses and area factories. In response, ocean freight has been diverted to ports such as Ningbo, Qingdao, and Tianjin.
However, there have been reports that other cities have been reluctant to allow trucks from Shanghai to enter.
The lockdown hasn’t only adversely affected ocean shipping. Airlines are canceling flights at Shanghai Pudong Airport and the reliability of cargo handling is described as “unstable.”
The industry is awaiting word from local authorities as to when the first stage of restrictions will be eased.