Reefer shippers asked to change routes as Shanghai lockdown bites

Major shipping companies, including France-based CMA CGM and Switzerland-based MSC, have suggested that refrigerated container customers reroute their cargo away from Shanghai.

Chinese officials have continued to insist that the port of Shanghai was functioning, with its employees designated as key workers during the now indefinitely extended lockdown of more than 25m people, but there were increasing reports of congestion even before city officials announced a further tightening of restrictions

Shanghai has been setting new records with more than 20,000 new cases a day being recorded last week. Symptomatic cases were also on the rise with the health authorities saying that the number doubled to 824 on Friday April 8th.

Some reports claimed that 90% of trucking capacity serving the port of Shanghai was now stopped. Restrictions were said to have been expanded to prevent most trucks from leaving the city. Since the beginning of the lockdown drivers have been required to test negative for Covid-19 to enter the port. They have also been limited in their routes and when they can travel.

CMA CGM told customers in an April 8th advisory that it had observed “a massive impact on both trucking movements’ velocity and available trucking capacities”, adding that “these factors have a major impact on import cargo that suffer drastically slower pick-up time and therefore excessively stretched dwell time.”

The Shanghai International Port Group reported that it was using a closed-loop approach to reduce exposure during the current wave of the virus across the city. However, there were reports that the container port, the busiest in the world, was operating at only half capacity.

Workers were permitted the terminals to continue to service ships, but a lack of lorries meant imports were accumulating on the dock, while any of the factories that had been able to continue to operate were finding it difficult to moved their goods to the ports.

CMA CGM suggested to customers on Friday April 8th that “to prevent a potential situation whereby on last-minute your reefer shipment is denied for discharge due to limited plug capacities, it is highly recommended that cargo owners anticipate potential issues and identify re-rerouting options.”

CMA CGM said that it would waive the change of destination (COD) administration fee for those customers who decide to COD inbound reefers from Shanghai to other alternative ports.

MSC reported experiencing “considerable congestion, resulting in low or, at times, no availability of plugs for reefer containers.” The company advised clients that it could not discharge reefer containers at the designated port if there was no power source available. They also recommended rerouting, stating that “if the situation does not improve soon it may be necessary to abandon the voyage and advise you from where your container(s) may be collected.”

Of some concern to both China and all those involved in global trade is that other cities across the country were beginning to report new cases of Covid-19 and that they were responding accordingly.

The Yantian terminal at Shenzhen port in southern China was reported to have halted operations briefly on April 7th for two hours to “smooth out port operations.”

Bloomberg reported that, if the Shanghai’s lockdown continued throughout April, the city would suffer a 6% fall in GDP resulting in an overall 2% cut in GDP for China.