European Firms Witness ‘Logistical Nightmare’, After Shanghai Lockdown

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  • A European business group says Western companies in Shanghai are facing a “logistical nightmare” as they start to reopen after a city-wide lockdown.
  • The European Union Chamber of Commerce says that it expects the problems to last for several more weeks.
  • On Friday, Chinese officials said they will help more than 600 firms restart operations in the major financial hub.
  • It comes after UK and US business bodies also said their members have been hit by Covid measures in China.

A recent news article published in the BBC states that Shanghai lockdown: European firms face ‘logistical nightmare’, says business group.

Companies face tough times in Shanghai

Although some firms have restarted operations in Shanghai by having their employees remain on-site, “many companies still face the challenges of labour shortages and logistical difficulties,” said Bettina Schoen-Behanzin, vice president of the European Union Chamber of Commerce in China and head of its Shanghai chapter.

“We estimate that less than 30% of their workforce are eligible to go to work due to the ongoing lockdowns, so there’s a huge gap between policy and the reality of implementation,” she added in a statement on Thursday.

“The consensus is that this logistical nightmare will continue till mid-May,” Ms Schoen-Behanzin said.

Business groups from UK and US raise concerns

Other business groups representing companies from the UK and US have raised concerns about the impact of lockdowns in Shanghai and other Chinese cities.

Also on Thursday, the American Chamber of Commerce in Shanghai said officials were still coordinating the movement of workers and goods across Chinese provinces.

“How fast that coordination occurs will help determine how quickly transportation and logistics bottlenecks are unplugged,” Eric Zheng, the association’s president, told the BBC. “But there are backlogs that may take several days to a few weeks to resolve”.

UK firms in China

Meanwhile, UK firms in China expect their profits to fall this year because of local Covid restrictions, a survey by the British Chamber of Commerce in China showed on Wednesday.

More than two-thirds of the more than 200 companies surveyed said that they expected lower revenues this year. Close to half of them said the restrictions had affected their ability to attract and retain foreign talent.

The financial, manufacturing and shipping hub of Shanghai saw a surge in Covid infections earlier this year. It was locked down by authorities for mass testing in late March.

As restrictions have been eased, Tesla has recently restarted production at its ‘giga factory’ in the city.

“We did lose a lot of important days of production,” its chief executive Elon Musk said on Wednesday.

However, the Shanghai factories of German carmaker Volkswagen (VW) and Apple iPhone producer Pegatron remain closed.

VW said it was evaluating the “feasibility” of resuming operations in Shanghai.

Meanwhile, Pegatron told the BBC on Wednesday that it was “waiting for further instruction from [the] local government”.

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Source: BBC

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