Shanghai returning to normal, but global supply chains deteriorating

While Shanghai, the world’s largest port, is slowly emerging from its months-long Covid-19 lockdown, the severely reduced capacity at which it has been operating has seen many shipments be cancelled, postponed, or rerouted to other Chinese ports.

Shanghai is due to reopen fully on June 1st, but that will bring with it knock-on effects. Chinese manufacturers, mindful of the peak autumn/ early winter season in the US and Europe, will be determined to fulfil backlogs, which could in turn lead to more rate increases as more goods want to move from China to consumer markets than there is available space on container ships.

According to the New York Federal Reserve’s global supply chain pressure index, supply chains remained under unprecedented pressure – and recently had been getting worse.