Global shipping giant Maersk says the Shanghai lockdown will cause delays and drive up transport costs in a fresh blow to the supply chain

Global shipping giant Maersk said a COVID-19 lockdown in China’s commercial center Shanghai is set to slow delivery times and push up transport costs.

In an advisory statement posted on its website on Monday, the shipping company said: “Trucking service in/out Shanghai will be severely impacted by 30% due to a full lockdown on Shanghai’s Pudong and Puxi areas in turn until 5th April.”

“Consequently, there will be longer delivery time and a possible rise in transport costs such as detour fee and highway fee,” the statement added.

The lockdown in Shanghai is reminiscent of the start of the pandemic when the global supply chain was thrown into chaos after factories in China were shut down and health regulations disrupted ship movements.

Shanghai is currently a hotspot for COVID-19 cases and strict lockdown measures began this week to combat rising cases across the city. It has been split into two along the Huangpu River to allow for mass testing. Those living to the east of the river are currently locked down while those in the west undergo testing. A four-day lockdown for people living west of the river will begin on Friday when testing will begin in the east.

The city recorded 4,381 asymptomatic COVID-19 cases and 96 symptomatic cases on Monday.

Maersk said that all warehouses would remain closed in Shanghai between March 28 and April 1, while a number of depots would be closed from March 28 “until further notice,” per the statement.

The shipping company also said that air cargo would also be affected due to labor constraints.

China is responsible for around a third of global manufacturing, according to The New York Times.

The latest lockdown in Shanghai is also affecting a number of factories. Tesla’s Shanghai Gigafactory is halting production for four days due to its location in the part of the city where the first lockdown is underway, Insider’s Urooba Jamal previously reported.

China also placed other export hubs, including Changchun and Shenzhen, under lockdown earlier this month, Reuters reported. Restrictions have since been relaxed in Shenzhen, but a number of small businesses in the area had been affected by disruption in the supply chain, the outlet said.

Insider

Tags: Maersk, Covid-19, costs, lockdown, Shanghai, fee, China