Danish consultancy on consequences for the shipping industry if China goes into lockdown

In February last year when China first went into lockdown it had consequences for the container sector as carriers responded with a wave of blank sailings. China is the world’s most important nation for shipping movements and if covid-19 cases continue to rise in the country, contingency plans will be needed, media Splash247 writes. 

Danish Sea‑Intelligence is a leading provider of Research & Analysis, Data Services, and Advisory Services within the global supply chain industry, with a strong focus on container shipping. According to CEO Alan Murphy, a similar scenario is to be expected if China goes into lockdown again. “Assuming that a strict China lockdown would lead to a scenario as in February 2020, we would expect a drop in production of 15-20% for about a month,” he said according to Splash 247.

Splash 247 writes that last year in late May, a covid-19 outbreak at Yantian Port slowed down operations by around 70 percent for most of June. Similar scenarios are likely to happen and shipyards are also likely to see their delivery schedules come under pressure if any wider lockdown measures are taken. 

Alan Murphy is concerned that Chinese ports will not be able to run at full capacity. “Cargo owners, already stressed beyond sanity from devastatingly high freight rates and absurd surcharges, and with no way to secure neither equipment nor space, would suddenly see their procurement costs sky-rocket in addition to their back-breaking logistics costs,” Alan Murphy said. 

According to Alan Murphy, however, production decreases could possibly start to wave out to the Chinese ports which would see the pressure starting to ease off on the ocean bottleneck which could start to bring down freight rates.  

Read the full article with more on the matter here

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