Tag "Port Congestion"

One out of every 5 container ships worldwide is waiting outside a Chinese port due to heavy congestion brought in by covid lockdown in China [1]. This could mean that another supply chain crisis is looming large on the horizon, waiting to crumble the global supply chain. The first signs became visible in March 2022, when the volume of goods being shipped by sea out of Shanghai dropped by 26%. It was seen that between March 12, when the targeted lockdown was introduced, and April 4, the volume of goods leaving the Shanghai ports by trucks fell by 19% [6]. The scale of the problem hanging over our heads can be sensed by the AIS data of the ships around China, which depicts 300 container ships and 500 bulk ships waiting off the coast of China [3].

The story begins with the outbreak of the omicron variant in China, following which the Chinese Government resorted to its tried and tested method of initiating its zero covid policy. China’s zero covid policy is directly responsible for such a steep drop in cargo movement. There are enormous backlogs of cargo to be shipped and to be received. At this point, even if the lockdown were to be magically removed, it would be cold comfort to the supply chain professionals as it only opens the floodgates for the crisis to progress.