Shanghai is attempting to reopen

The Chinese government released a temporary three-phased schedule for reopening Shanghai as from 1st June. Production facilities are expected to be brought back online during that time, but delays and backlogs will persist.

We can expect disruption to trucking, port, and airport operations well into August or even September 2022. The significant reduction in truck capacity, as well as the closures of factories and warehouses has caused the diversion of ocean freight to nearby and regional ports of Ningbo, Qingdao, and Tianjin (Xingang). The lingering impact in China due to the government policy toward “Zero COVID” will affect all transport and manufacturing operations in the region.

Ripples from this shock to the supply chain will impact ports and terminals throughout the world as waves of cargo start to ship from the region. Analysts anticipate that the ocean freight backlog in the region amounts to 250.000 containers.

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