Maersk warns Shanghai city lockdown will boost transport costs furtherLonger freight delivery times and rise in transport costs are likely as Chinese factories look to use other ports as alternatives to Shanghai.
Danish shipper Maersk said the Shanghai lockdown will severely hurt trucking services and increase transport costs, as China's intensifying efforts to fight the spread of COVID-19 further rattles global supply chains.
The Chinese coastal city, home to some of the world's busiest sea and airports, began locking down half of the city on Monday and intends to do the same to the other half for four days starting Friday in a two-stage testing exercise.
While it has kept its airports and deep-water port open, it has imposed stringent movement curbs, barring unapproved vehicles from streets and telling millions of people not to leave their homes.
"Trucking service in and out [of] Shanghai will be severely impacted by 30% due to a full lockdown on Shanghai's Pudong and Puxi areas in turn until 5 April," Maersk, the world's second-largest container shipping company, said in an advisory to clients on Monday.
It added that warehouses in Shanghai would be closed until Friday.
"Consequently, there will be longer delivery time and a possible rise in transport costs such as detour fee and highway fee."
SEKO Logistics, a US-based freight transport and warehousing company, said factories in the neighbouring province of Zhejiang were opting to move cargo out of Ningbo's port, rather than Shanghai.
"We are anticipating: a sharp increase in air freight rates from today. We have already received some sky-high offers for enquiries to Europe so far today," the company said on its website.
China is battling its largest number of COVID-19 infections since the country's initial outbreak receded in early 2020. This month it placed lockdowns on other manufacturing exports hubs such as Changchun and Shenzhen, which gave rise to lengthening queues outside major Chinese ports.
Although restrictions in Changchun have remained in place, they have been relaxed in Shenzhen, where businesses and factories were allowed to resume operations on 21 March.
However, a survey conducted by a state newspaper found Shenzhen's "war" on COVID-19 has hurt up to 93% of local small and medium-sized companies, with many suffering production disruptions because of shutdowns, interruptions in supply chains, and delays in order executions.
(Reporting by Brenda Goh; editing by Gerry Doyle)