I bought a new laptop computer which was shipped and I should be using it now, but instead it still sits at the FedEx terminal at Pudong Airport n Shanghai, day 4, as China's Covid quarantine of the Shanghai airport ground crew continues
Amid a new wave in the global pandemic caused by the Omicron variant, Shanghai has reported a surging number of imported cases via Pudong airport.
The Shanghai Airport Authority said it had tightened the "closed-loop" management on human, cargo and environment at Pudong airport. 20,000 people exposed to an air freight employee with Omicron Covid have been tested and cleared.
Although China's ports and airports are still open, current restrictions – like mandatory quarantines and testing – continue to slow down transport and cause delays,” Atul Vashistha, founder and chairman of supply chain risk intelligence firm Supply Wisdom, told CNBC.
China’s key priority right now is to limit the spread of Covid cases ahead of next month’s Winter Olympics and the upcoming Lunar New Year, February 1 through the 7th, he added. However, the ensuing curbs at ports have also let to some “chaos.”
Sea shipping spot rates crept up 4% on the Asia to U.S. West Coast route, Levine said, but they’re not likely to go up much further, amid a pause in manufacturing as the Lunar New Year holiday approaches and factories shut down for an extended period.
However, air cargo rates at Pudong Airport in Shanghai have spiked 50% and are still rising.
Shipping costs have been falling over the past couple of months as the supply chain backlog eased, but the recent Covid surge and any potential port closures are going to cast a shadow over any progress that has been made, said Paul Gruenwald, chief economist at S&P Global Ratings.
“I would say that this is going to slow the improvement we’ve been seeing over the last couple of months,” he told CNBC’s “Squawk Box Asia” on Thursday.
China’s zero-tolerance for Covid will have a major impact on global supply chains, said John Ferguson, practice lead for globalization, trade and finance for think tank Economist Impact. |
