Hello! Dear member

May 06,2022

Shanghai capacity creeps back but trucking trouble remains

Flight capacity is slowly improving but trucking remains in trouble as the Shanghai lockdown goes on and there are concerns a lockdown could be rolled out in Beijing.

Flexport said in a market update on April 26 that Shanghai continues to undergo lockdown due to high amounts of Covid cases.
A round of Covid-19 testing will be undertaken over the next few days to determine which areas of Shanghai can safely start reopening. However, Beijing is now waiting to see whether lockdown measures will be implemented in the city.

Shanghai capacity creeps back but trucking trouble remains

“Flight capacity has recovered slightly compared to last week, but the main bottleneck is a lack of trucking capacity,” said Flexport. “Despite this, airlines have increased rate levels as we head towards Golden Week.”

Flexport added that the pandemic and Ukraine war ripple effects are still impacting flight frequency in South China, but demand is rising.

“Ex-South China the flight frequency has still not recovered due to the Covid situation and war conflict, however, demand continues to pick up. Rates maintain at around the same levels as last week and the market is quite strong before the holiday.”

Westbound Logistics Services said on April 24 that Zhengzhou, Beijing, Guangzhou, and Shenzhen airports have been suffering congestion as they handle diverted cargo from Shanghai Airport (PVG).

“Strict controls remain on transport in and out of PVG, while many flights remain suspended. Being China’s major international hub, this has led to traffic from outer regions being diverted elsewhere. 

“Airports such as Zhengzhou, Beijing, Guangzhou, and Shenzhen have been carrying the weight of this diverted volume, leading to congestion, a shortage of airline pallets, and little or no capacity to store cargo.”

Norman Global Logistics has predicted that logistics disruption will last into “at least mid-May” before capacity returns to a normal level.

It said Covid measures in place in Shanghai and Ningbo are putting pressure on regional transport and logistics, with delays and longer wait times for vessels and limited transport to and from the seaport and airport that has seen road transport costs and the waiting time costs in the affected areas rise.

More supply chain pressure will be added with a further drop in exports from China’s main ports due to limitations with recently restarted factory production and connecting transport, said Norman.

Dimerco noted on April 26 that a Shenzhen-Hong Kong freighter service is now operating to address the lack of trucking capacity while cross-border trucking capacity continues to be very limited and terminals lack manpower due to Covid.

Meanwhile in the Republic of Korea, capacity is tightening up due to airfreight shipments being re-routed to the country from North China as a result of the ongoing Covid lockdowns.

Flexport added that in Europe, demand is steady with rates at a stable high and jet fuel prices starting to decrease, but freighter capacity is still “heavily reduced”.

Its Americas update noted that demand remains high and most airlines have canceled their flights into Shanghai Pudong Airport (PVG) due to the current Covid-related lockdown.