- And it is impossible to do so… demand is all over the place.
- Pre-Covid cost £12 to ship, door to door, from a factory in northern China to the UK with a six-month lead time.
- Shanghai’s lockdown is also causing a huge buildup of container ships (in green) offshore.
Retailers have warned that China’s severe lockdown of Shanghai is hurting global supply chains as the city’s port clogs up, threatening to cause delays and shortages as well as driving up costs in the UK as reported by Daily Mail.
Strict lockdown
The city – which is home to the world’s largest container port – has now been in strict lockdown since late March, causing huge backlogs to build up with hundreds of cargo vessels stranded offshore.
Nick Glynne, CEO of the UK’s Buy It Direct group, told the BBC today that this is exacerbating problems with supply chains that have not been resolved since last year – affecting products as varied as barbecues and fridges.
Meanwhile, the people of Shanghai continue to suffer from the video appearing to show bags of cats left on the streets amid claims the animals are due to be culled because their owners tested positive for Covid.
China is continuing to pursue a strict ‘zero-Covid’ approach to the pandemic, even in the fact of the more-infectious Omicron variant, with experts warning the chaos and misery could continue for months.
Disruption
BBVA, a Spanish financial services firm, has warned the disruption could last until June.
Mr Glynne said that is causing major problems for retailers who are facing months of delays to get their products shipped, extra costs in finding alternative routes, or a toxic combination of both.
‘Pre-Covid, there was around a six month lead time.
If we wanted to order a barbecue for the summer, we would order it by November, he said.
And it is impossible to do so… demand is all over the place.
‘Now we’re looking at 12 to 14 months lead time and the price of freight alone has gone up to £80.
Backlogs
The backlogs are caused by multiple factors.
China is trying to resolve some of the issues.
Beijing last week created a ‘white list’ of 666 firms that have been prioritised to reopen under strict health regulations.
These include Tesla, Volkswagen and its Chinese partner SAIC Motor, as well as semiconductor and medical firms.
To prepare for the restart, Tesla has recalled workers to its Shanghai plant where they will need to live on-site, in line with China’s “closed-loop management” process, two sources said.
Zero-Covid
Data for March released on Monday showed that consumption and employment suffered because of COVID curbs, with economists predicting a worsening overall economic outlook.
“We hope that the majority of our citizens will continue to cooperate as always … and achieve the goal of zero-COVID at the community level as soon as possible, and allow normal production and life to resume,” Shanghai health official Wu Qianyu said.
Of 21,395 new local infections Shanghai reported for Sunday, 561 were found outside quarantine areas, down from 722 on Saturday, the third consecutive decline.
However, numerous Shanghai residents have said that a family member had died after contracting COVID-19 during the current outbreak, but that the cases had not been included in official statistics, fuelling suspicion about the accuracy of data.
China has said that sticking to a “dynamic clearance” strategy is essential to protecting its elderly.
Shanghai has carried out more than 200 million PCR tests since March 10.
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Source: Daily Mail
