UPDATE: Chinese ports and operations shut down due to COVID lockdown
UPDATE: More lockdowns directly impacting Sunset customer freight from Shanghai.
SHANGHAI, March 28 (Reuters) – China’s financial hub of Shanghai launched a two-stage lockdown of its 26 million residents on Monday, closing bridges and tunnels and restricting highway traffic in a scramble to contain surging COVID-19 cases.
The snap lockdown, announced by the local government late on Sunday, will split China’s most populous city roughly along the Huangpu River for nine days to allow for “staggered” testing by healthcare workers in white hazmat suits.
It is the biggest COVID-related disruption to hit Shanghai, and sent prices of commodities including oil and copper lower on fears that any further curbs could hurt demand in China, the world’s second-largest economy.
Residents east of the Huangpu were confined to their homes. Some said healthcare workers arrived to conduct tests as early as 7 a.m. on Monday.
Those in the west rushed to stockpile food and other goods as they prepared for a similar fate from April 1. Delivery services were overwhelmed and supermarkets ran low on supplies. Several social media users posted images of what they had managed to buy.
“Many wholesale markets are now closed,” Bi Yingwu, a 50-year old stallholder, said. “Some vendors are reluctant to buy in vegetables. If we cannot get vegetables from wholesalers or the wet market is closed, we are finished.“
The curbs mark a turnaround for Shanghai’s authorities, who as recently as Saturday denied the city would be locked down as it pursued a more piecemeal “slicing and gridding” approach to try to rein in infections.
Wu Fan, a member of Shanghai’s expert COVID team, said recent mass testing had found “large scale” infections throughout the city, triggering the stronger response.
“Containing the large scale outbreak in our city is very important because, once infected people are put under control, we have blocked transmission,” she told a briefing.
Infection and death numbers are low by global standards. But China has imposed a zero-COVID policy that has all but closed its borders to travelers for two years, and rushes to shut off every chain of infection.
Shanghai recorded a record 3,450 asymptomatic COVID cases on Sunday, accounting for nearly 70% of the nationwide total, along with 50 symptomatic cases.
Shanghai said earlier this month its daily testing capacity was around 3 million, but Chen Erzhen, a doctor in charge of a city quarantine facility, warned it still might not be enough to outpace the spread of the virus.
“When case numbers reach a certain level, the difficulty of relying upon previous staff deployments increases by a large degree,” he told government newspaper Liberation Daily.
The new lockdown should at least ensure the “stillness” required to bring the outbreak under control, he added.
Wu had told a briefing on Saturday that Shanghai could not be locked down for long because of the important role it played in the national and even global economy.
But following Sunday’s about-turn, mass testing disrupted transport, healthcare and a wide range of economic activities, with citywide land sales also halted on Monday.
Shanghai’s Public Security Bureau said it was closing cross-river bridges and tunnels, and highway tollbooths concentrated in the city’s east until April 1. However, ports and the city’s two airports remained open.
Shanghai also ordered firms to shut, exempting those offering public services or supplying food, although factories that managed to put in “closed-loop” systems could continue production. Some hospitals also suspended services as they release staff and other resources to assist with mass testing.
U.S. automaker Tesla is suspending production at its factory, located in a district impacted by the first stage of the lockdown, for four days, two people familiar with the matter told Reuters.
Volkswagen, however, whose Shanghai plant is in a part of the city that is set to be tested in the second stage, said its production in the city was ongoing.
An update from Sunset’s International Team:
The following information details the current International market conditions. Customer communication is vital with the instability of international trade. Please read the following updates and we offer the following precautions:
A number of Chinese ports and logistics operations are shut down due to the spread of COVID-19, stretching from Shenzhen to Shanghai. Mainland China is facing their worst outbreak since 2020, with major cities suspending business activity and transportation. These lockdowns are disrupting the operations of major businesses, and threaten to further upend supply chains already strained by shortages and delays. The lockdown is expected to last until March 20 at the earliest, with more than 45 million people restricted from leaving their homes.
WHAT SUNSET SHIPPERS NEED TO KNOW:
- Production facilities have come to a complete halt, placing customer inventory in jeopardy.
- Local transportation is highly restricted, and rates are skyrocketing locally in China.
- SEKO Logistics reported: “Trucks from outside Shenzhen cannot enter the city and cross-border shipments from Shenzhen to Hong Kong will not move unless they carry essential goods to Hong Kong“, via AJOT.
- Warehouses in Shenzhen will remain shut until March 20.
- The Yantian Free Trade Zone will be closed starting March 14-20, 2022. Cargo will not be loaded and vessels will most likely bypass the port. As a result, shippers should expect major delays in containers originating from the South China port of Yantian.
Sunset is here to help with the most basic or complex shipments. Email [email protected] to speak further about how to manage any International needs that arise.
Excerpt via AJOT
Lockdowns aimed at stemming the spread of Covid-19 in China are disrupting the operations of a raft of businesses, with more than 45 million people restricted from leaving their homes as the country faces the biggest challenge yet to its pandemic containment efforts.
Key Apple Inc. supplier Hon Hai Precision Industry Co. said it was halting production at its sites in Shenzhen, the southern technology hub that was locked down with little notice on Sunday, its public transport networks halted and 17.5 million residents ordered to limit their movements.
Unimicron Technology Corp., a maker of printed circuit-boards, also suspended output in Shenzhen, and BYD Co., the Shenzhen-based car and battery maker backed by Warren Buffett, said it was seeing some impact on production. The lockdown, China’s first of a so-called tier-one city, is expected to last until at least March 20, with three rounds of mass testing planned to root out cases.
Meanwhile, the northeast province of Jilin, which borders Russia and North Korea and is home to some 24 million people, was locked down Monday. It’s the first time China has levied movement restrictions on an entire province since the early days of the pandemic, when Hubei was sealed off.
The move saw Toyota Motor Corp. suspend operations at its factory making RAV4 SUVs in the capital, Changchun, while Volkswagen AG said three plants in the city run with its local partner China FAW Group Co. would close until at least Wednesday. Jilin is also home to the nation’s largest mineral reserves and is a key farming area.
Another lockdown was called early Tuesday for Langfang, a city of some 5.5 million people about 55 kilometers (34 miles) southeast of Beijing, close to the capital’s new international airport, Daxing.
The lockdowns threaten to further upend supply chains already stretched by materials shortages, shipping delays and the uncertainty triggered by Russia’s invasion of Ukraine. Shares of Apple and its suppliers fell on the news, even as Hon Hai, known as Foxconn and a key iPhone manufacturer, said it expected no “major” impact from the shutdown.
“Previous steps to contain virus flareups left manufacturing unscathed for the most part,” said Chang Shu, Chief Asia economist for Bloomberg Economics. These moves “will hit output in key industries such as tech and machinery that feed into global supply chains.”