Shanghai’s weekend quarantine measure impacts exports

Shanghai’s weekend quarantine of 15 out of its 16 districts affected the flow of exports bound for the Port of Shanghai, according to CNBC Supply Chain Heat Map provider OrientStar Group.

“Highways were closed because of this latest round of quarantine,” the logistics company told CNBC. “Trucks loaded with cargoes and containers were unable to enter the Shanghai terminal. Many clients have no choice but to change the loading ports to Ningbo or other outports along the Yangtze River.”

During the two-month lockdown that started in April, the port of Ningbo became the alternative port for logistics and, as a result, congestion at that port has been increasing.

OrientStar Group reported there are still positive COVID-19 cases found in certain districts in Shanghai and regulations are still being imposed in those areas to limit the spread.

“Production and manufacturing are basically resumed in Shanghai, but once there are quarantines, transportation and drayage are affected to a certain extent,” the group added.

Raw material shortages during the lockdown affected production for companies Volkswagen and Tesla.

Before the latest restrictions, truck drivers were still required to provide a nationally recognized 48-hour negative COVID test result and traffic permit, said Ahkil Nair, Seko Logistics’ vice president of global carrier management and ocean strategy for Asia Pacific. In practice, he said, many local governments have also demanded that tests be retaken locally and on highways.

“Some drivers are cautious about delivering into Shanghai and capacity has yet to fully recover to pre-lockdown volumes,” he said.

The latest quarantine restrictions came at a time when trucking recovered to around 80%.