Lockdowns spread in China as Shanghai measures could ease in May

Shanghai lockdown measures that are impacting airfreight operations in the city and putting pressure on supply chains are expected to continue for the next two to three weeks.

This is according to Flexport, which warned that although there is light at the end of the tunnel for Shanghai, cities near Shanghai are also seeing a rise in Covid cases and some areas have begun implementing similar lockdown measures. 

“Due to the limited availability of trucking resources, trucking rates are at high levels and seeing delays of around three to five days in pick up times. More than 80% of commercial freighter services have been cancelled and airlines are looking into potentially shifting operations to nearby airports,” added the supply chain specialist on April 12.

Air Cargo News recently reported that operations at Shanghai Pudong International Airport (PVG) remain constrained.

Looking at South China, Flexport said that ex-Hong Kong flight frequency has “still not recovered” due to the impact of pandemic quarantine measures and disruption to flight schedules due to the Ukraine crisis, however, “demand is improving since lockdown measures were lifted in Shenzhen”.

Cross-border trucking capacity is still around 20% of the original capacity, while the ex-Shenzhen market demand is improving but is highly affected by cross-border trucking capacity.

Some shipments from Shanghai are also being re-routed to Shenzhen, and airfreight rates have increased compared to the week before. Flexport added.

It said Taiwan’s market demand is relatively stable, but transit demand has “dropped significantly”, partly due to the Shanghai Pudong Airport operating constraints.

Meanwhile in Europe, capacity remains a concern. “Freighter capacity is heavily reduced and booking to uplift window is approx 10-14 days,” said Flexport.

“Deferred routings are still providing a viable routing option if already tight lead times can take it. We also see cheaper options on the market to secondary hubs where airlines have regular passenger flights.”

It added that rates are high but stable due to capacity constraints. Jet fuel prices, exacerbated by longer flight times to avoid Russian and Ukraine airspace, have started to drop, however Flexport said “the benefits will not be passed on till the market stabilizes”.

Norman Global Logistics said in an update on April 13 that due to the Shanghai lockdown operating restraints “airline handling has become almost impossible, due to lack of staff”.

The company added that many factories and warehouses are closed, while major reductions in trucking capacity is being caused by a shortage of drivers unable to reach workplaces or not able to cross borders; delays and shortages caused due to mandatory PCR tests; extended waiting times at cargo facilities; and restrictions on highways networks and cross border areas.

Dimerco added on April 11: “Traffic control for road transportation is getting more strict now.”  It said that cross-border trucking capacity continues to be very limited and a Shenzhen-Hong Kong freighter service has been launched in response to this capacity drop, although did not provide any more details on this service.

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