(Bloomberg) — Containers full of frozen food and chemicals are piling up at China’s biggest port in Shanghai as a Covid lockdown in the city and compulsory virus testing means truckers can’t get to the docks to pick up boxes.
A shortage of trucks to haul containers from the port is impeding the clearance of imports, Ocean Network Express said in a customer advisory Wednesday. While the port is operating normally, there are a “critically high” number of refrigerated containers and items classified as dangerous goods piled up at two storage yards, meaning some ships carrying those types of cargo may not be able to unload any more boxes at the port, it said.
Shanghai is now the epicenter of China’s worst Covid outbreak in two years, with more than 21,000 cases reported just on Thursday. The shortage of trucks is also hitting companies in the city, which have been able to continue working through the lockdown, with chip giant Semiconductor Manufacturing International Corp. struggling to secure trucks to ship out finished goods.
Truckers form a crucial component of supply chains in China, moving raw materials from coastal ports to factories further inland. The backlog is likely contributing to growing ship queues off China, threatening even more delays and higher freight rates in coming months.
Tightened restrictions on truckers in other parts of China are also delaying the delivery and return of containers to ports, according to freight forwarders. There is a possibility that containers of frozen food or hazardous items like lithium batteries or chemicals won’t be able to land at Shanghai and will need to be re-routed to other ports, ONE said.
Yantian terminal at Shenzhen port in southern China halted the collection and delivery of containers at all berths for about two hours Thursday evening to smooth out port operations, according to an advisory sent to customers. Truckers were advised not to arrive earlier to pick up boxes as they could get held up.
The trucker shortage and closures of warehouses in Shanghai are also affecting nearby Zhejiang and Jiangsu, Citigroup Inc. analysts said in a report. The two provinces are major manufacturing hubs that produce about one third of China’s total exports.
“Not only does this have a significant impact on China’s domestic economy but also on potential regional supply chains, which could be more meaningful in Korea, Taiwan and Vietnam,” the analysts said.
(Updates with comments from Citi in last two paragraphs.)
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