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China - Shanghai Port under Epidemic Control: Ships are not blocked, but cargo is difficult to transport - April 3, 2022

sharon sanders

Editor-in-Chief & President
Shanghai Port under Epidemic Control: Ships are not blocked, but cargo is difficult to transport

  The impact of the closure and control on shipping trade is mainly on land.

Shanghai Yangshan Port Wharf. Figure / Figure Worm CreativeShanghai Yangshan Port Wharf. Figure / Figure Worm Creative
  The recent epidemic situation in Shanghai is severe. As the location of the world's largest container port (Shanghai Port), the movement of container cargo in Shanghai has also been directly affected.

  According to a notice issued by the Shanghai Road Transport Administration, starting from March 29, container vehicles involved in inbound transportation at Shanghai Port must hold an electronic epidemic prevention pass issued by SIPG, and the condition for obtaining the pass is that container truck drivers (the following The truck driver for short) holds both a negative nucleic acid test certificate within 48 hours and a negative antigen test certificate within 24 hours.

  Several employees of freight logistics companies told China News Weekly that during the closure and control period in Shanghai, container truck freight was basically in a "semi-paralyzed state", and it was difficult for vehicles to enter Shanghai, and even if they entered, it was difficult to get out.

  Lin Hao (pseudonym) is a staff member of a large international shipping company. He revealed to China News Weekly that most of his company's business has been stagnant. , truck drivers are all sealed in the place of residence, resulting in a lack of vehicles for transporting empty boxes, and the yard can only complete basic operations such as picking up and returning boxes.”

  Inter-provincial freight of trucks is blocked

  It is understood that the Pudong, Punan and adjacent areas that took the lead in sealing and controlling are the areas where Shanghai warehouses and logistics companies are relatively concentrated. Pudong is the core area of ​​Shanghai's international shipping and trade center. Important logistics hubs such as Shangang District are located in Pudong.

  As one of the busiest ports in the world, Shanghai Port will exceed 47 million TEUs in container throughput in 2021, ranking first in the world for 12 consecutive years. According to SIPG's notice, all production units in Hong Kong will maintain 24-hour operations except for the extreme bad weather.

  Shanghai Port Group announced on April 2 that according to internal data monitoring, the current operation of Shanghai Port is stable and orderly, and the berthing efficiency of Shanghai Port is significantly better than the overall level in 2021. Since March 28, the average waiting time of container ships in Shanghai Port has been less than 24 hours, and the average waiting time has been less than 10 ships. SIPG emphasized that the production and operation of the terminal are normal, and there is no congestion of container ships.

  China News Weekly noted that although the closure did not close the port, freight efficiency was still greatly affected. Several shipping practitioners reported to China News Weekly that due to the epidemic, the access of port workers and truck drivers was not as smooth as before, resulting in a delay in the delivery time. At the same time, most of the sources of goods in Shanghai Port come from the Yangtze River Delta region, not local factories in Shanghai. There are few local freight drivers in Shanghai, so the inter-provincial freight of trucks has been directly affected.

  Zhang Yang, head of SIPG's Jiangsu area company, told China News Weekly that the group currently implements closed-loop management of personnel, and port ship docking and docking operations are still going on normally. However, due to the impact of the epidemic, truck transportation will be affected to some extent.

  Lin Hao's company is located in Pudong. In an interview with China News Weekly on the afternoon of April 1, he said that he has not yet received a notice of unblocking. Most of the company's container inspection personnel and truck drivers are still blocked in their residences, and many jobs are still at a standstill.

  "A lot of work in the yard requires on-site operations, such as driving stackers (various wheeled handling vehicles), truck trailers, etc." Lin Hao said that there is now a lack of trailer personnel in the yard, resulting in many imported empty containers stuck at the wharf In the yard, it cannot be towed to the yard in time, or even if it is towed to the yard, it cannot be repaired.

  "The company's current container inventory and manpower in the yard can barely support export demand, but if it continues to be sealed and controlled, there may be a shortage of containers. In addition, materials need to be purchased from other places (domestic) in advance during inspection and repair. The field is already short of welding materials, and even if there is manpower, it cannot be repaired." He said.

  As the epidemic in Shanghai continues to be severe, traffic control has also been further tightened. The epidemic prevention pass issued by SIPG currently requires both a negative certificate of electronic nucleic acid test within 48 hours and a negative certificate of antigen test within 24 hours (if a negative certificate of nucleic acid test within 24 hours can be provided, antigen test certificate is not required) .

  A staff member of a freight company in Pudong, Shanghai said that in fact, it is not enough for the truck drivers to have a negative nucleic acid certificate. Many communities are now closed and residents cannot travel, including the truck drivers. Another person from a sea freight forwarding company living in Puxi told China News Weekly that he has been quarantined at home since March 28 and cannot receive goods.

  However, Gong Jianwei, an assistant researcher at the Shanghai International Shipping Research Center, told China News Weekly that truck transportation in Shanghai was not affected much. Now the more problem is that after leaving Shanghai, especially in many places in the Yangtze River Delta region, vehicles from Shanghai are directly persuaded to return.

  It is understood that starting from March 28, high-speed exits in Jiangsu, Zhejiang, and Anhui provinces have upgraded the vehicle control measures in Shanghai. Tongling, Zhuji, Zhenjiang, Danyang and other places are directly persuaded to return, while Xianju Truck drivers in Shanghai are immediately quarantined after getting off the expressway.

  Lin Hao's company has containers in Taicang. According to his knowledge, truck drivers can still travel to and from Shanghai from March 28 to 29. After arriving in Shanghai, they will first deliver the boxes, and then do a nucleic acid test. As long as the test results are negative, they will be taken. You can return to Taicang. But now the truck drivers in Taicang can no longer go to Shanghai.

  Wang Hai, editor-in-chief of the shipping industry network and an analyst in the shipping industry, said that the epidemic control measures will inevitably have a certain impact on truck transportation and container turnover. Some container shipping companies have also taken measures to reduce the number of ships calling at Shanghai Port and suspend urban areas. Internal warehouse operation, etc.

  Reduced efficiency may lead to port congestion and reduced container throughput. He said, "Shanghai Port Group is currently making every effort to ensure 24-hour operations, and truck drivers continue to work through nucleic acid testing and other methods."

  Zhang Yang predicts that it will take some time before the unsealing of container operations, "at least 3-4 weeks".

  Land to water, iron to ease the pressure on road freight

  "The impact of this closure and control on Shanghai's ports and logistics is mainly concentrated in onshore collection and distribution, especially truck transportation. After Shanghai and Shanghai Port Group opened a green channel for truck drivers, I think this impact It is limited and controllable." Gong Jianwei said.

  He introduced that the collection and distribution system of the entire port is generally divided into landside and waterside, and the landside mainly includes roads and railways. Rarely, the impact of closure and control on road transportation is the greatest.

  It is reported that it takes a few hours for a freight forwarder to queue up to pick up a container at Shanghai Port; after the queue is over, it takes a few hours to go to the factory to pack a container, and it takes several hours to install a container. This set of processes will take at least half a day.

  Even if the packing is successful, there will still be many checkpoints in the process of road transportation. At each checkpoint, relevant personnel will conduct antigen screening, and an antigen test will take more than ten minutes at the fastest. It takes more than ten minutes for each driver, which will cause the congestion of trucks.

  In addition, workers enter the factory to load and unload goods, and both the source and truck drivers need to undergo antigen testing, which may lead to a significant drop in the efficiency of road freight transportation.

  "With the tightening of epidemic prevention policies in various places, the time and cost of truck transportation is getting higher and higher." Zhang Yang said, for example, traditional truck transportation vehicles "carry" empty containers from Shanghai to Nanjing, Zhenjiang and other places to pack and transport. , which must pass through Wuxi, Suzhou, Changzhou and other places. Due to the different epidemic situation in different places, freight vehicles may be blocked because of this.

  In order to alleviate the pressure of the shortage of road transportation resources in Shanghai Port due to the impact of the epidemic, SIPG launched the container "land-to-water" service, covering the ports in the Yangshan area and Waigaoqiao area of ​​Shanghai Port to the relevant ports in the Yangtze River and Yangtze River Delta areas.

  In addition to land transportation, there are also rail transportation and water (ship) transportation to Shanghai Port. The latter includes the Yangtze River waterway, and some rivers in southern Jiangsu and northern Jiangsu. Zhang Yang said that because road truck transportation is relatively difficult at present, the "land-to-water" and "land-to-rail" freight modes launched by SIPG can ease the pressure of cargo transportation.

  The advantage of water transportation is that it is a closed-loop system operation, and the shipper does not need to disembark when delivering the container to the terminal, and one ship can transport two or three hundred containers at a time.

  Gong Jianwei said that "land to water" and "land to iron" are trying to make up for the shortage of third-party truck transportation. In addition, SIPG also promotes sea-rail combined transportation, reaching the container yard of Shanghai Port (mainly Luchao Port) by rail transportation, and then transporting the goods by trucks within SIPG, without the intervention of external drivers.

  After the unblocking, the impact will continue in the short term

  "Despite the closure and control, in order to ensure the stability of the supply chain, Shanghai Port maintains 24-hour operations. At present, the overall shipping is normal. The recent average daily container throughput of Shanghai Port has remained at 140,000 TEUs." Shipping industry analyst Wang Hai told China News Weekly.

  In Lin Hao's view, the impact of this lockdown on the entire shipping industry is certain, but it is difficult to judge the extent of the specific impact. He said that one-fifth of the goods exported from Shanghai Port should be brought in from other parts of the country. After the closure of Shanghai, it will be difficult for these goods to be exported from Shanghai Port, and they need to be exported from other ports.

  "I was in a hurry when I notified the closure and control. After the notification, the closure and control were implemented the next day. There was no time for the container yard to prepare, such as transporting some living materials, preparing beds, bathing places, etc." Lin Hao He said that most of the staff of the shipping company he worked for had been sealed off from their places of residence in various parts of Shanghai, and some of the colleagues who stayed behind in the unit and the yard had problems with living materials and washing up, and some people didn't even have a bed to rest.

  Lin Hao said that a problem that is still facing now is that there are no staff who can replace the shift. In the past, the work in the yard was generally non-stop 24 hours a day, but now it can only work half a day.

  Zhang Yang said that at present, Shanghai SIPG has a complete closed-loop management system and implements a special shift system. Some staff have been working at the terminal for 12 consecutive days and live in the company's dormitory at the terminal. In fact, this has been the living state since the epidemic in 2020. Many dock workers only return home once every 2-3 months. After disembarking, they need to do nucleic acid testing, isolate at home, rest for a short period of time, and return after one month. Get on board. "During the lockdown in Shanghai now, the crew replacement rate is very low," he said.

  It is worth noting that recently, a number of shipping companies such as Maersk, COSCO, Hapag-Lloyd, Evergreen and Mason have successively issued business adjustment notices. Maersk said trucking services in and out of Shanghai will be affected by 30% as the Pudong and Puxi areas in Shanghai are fully closed until April 5. The company believes that the closure management "will lead to longer transportation times, and transportation costs such as detours and highway use fees may increase".

  "Not only Maersk, but many other shipping companies will be affected." Zhang Yang said that Shanghai is equivalent to a large base station, where a lot of goods need to be brought in and out, and it is impossible to complete 100% by water or land transportation. Now due to the impact of the epidemic, road transportation is blocked and stagnant, which will inevitably affect the entry and exit of many goods.

  According to a Caixin report, a person in the freight industry pointed out that the freight rate of goods sent from other places to Shanghai has risen significantly recently, with an increase of nearly 50%, and even an increase of 100%. "The freight costs must have increased compared to before, and the price increase is a normal phenomenon." The staff of the aforementioned logistics company said.

  In fact, since the epidemic, the cost of truck freight has been at a high level, which can be seen from the financial report of the leading shipping company COSCO SHIPPING Holdings (601919.SH) last year. On March 30, the 2021 annual report released by COSCO SHIPPING Holdings showed that the company's overall operating performance, container shipping business revenue and freight volume all hit record highs last year. The company achieved a profit before interest and tax of 131.5 billion yuan, of which the profit before interest and tax of the container shipping business reached 127.7 billion yuan.


  "It can also be seen from the huge profits how crazy this market has been in the past." Gong Jianwei said that there are many reasons, mainly because the entire logistics supply chain is not smooth. In fact, the high point of the entire truck transportation cost has been slowly going down, but compared with the historical price, it is still high. He believes that this round of closures may slightly raise freight rates, but there will be no significant increase.

  The previous announcement showed that at 3:00 on April 5, Puxi will be lifted. However, some analysts believe that it is unlikely that all of them will be opened at once. It should be gradually unblocked according to the number of cases in each area. After the social dynamic is cleared, a slow unblocking process is still required, and there may be sporadic rebounds in individual areas.

  "Many trucks in Shanghai go to and from the Yangtze River Delta. At present, Jiangsu, Zhejiang, and Anhui provinces have also increased their prevention and control efforts due to the impact of the epidemic in Shanghai. The policies for the passage of trucks on expressways and other places are not unified, and there is a lack of overall planning." Wang Hai suggested that the Yangtze River Delta region can communicate and coordinate more in response to the smooth flow of freight during the epidemic, strive to explore mutual recognition of nucleic acid test reports and travel certificates, and unify policies.

zhttps://news.sina.com.cn/c/2022-04-03/doc-imcwipii2222407.shtml
 
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