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Viewpoint: Shanghai’s disruptive impact on the summer supply chain

The hairball snarling the flow of trade in Shanghai is growing. 

Just as I warned on March 24, this lockdown will have a significant impact. The longer the delays, the greater the impact on U.S. inventories in the coming weeks. We have seen this horror show before and we all know the containers that are currently piling up will eventually make their way to the United States, creating massive congestion. 

Besides technology products, furniture and auto parts, there are seasonal items in these containers. American Apparel and Footwear Association CEO Stephen Lamar tells American Shipper this is the traditional time when U.S. retailers import their summer merchandise. 

While some retailers may have started bringing in summer items earlier this year after last summer’s congestion, the delays happening now will only hinder the supply chain.

“With more than two years of managing COVID-19 while keeping operations open in the U.S., we are eager to see the Chinese deploy these learnings as well,” Lamar says. “Zero-COVID policies seem effective only in creating supply chain disruptions that extend far beyond China’s borders. 

“We need healthy supply chains and healthy trading relationships now more than ever.”

SONAR tracking

SONAR tracking of the inbound ocean volume of twenty-foot equivalent units shows how the combination of Lunar New Year and lockdowns have had an impact. 

Project44 breaks down the container crunch. The length of time of containers dwelling is increasing as a result of the lack of manpower.

The continued dramatic drop in shipments from Shanghai specifically just shows ports declared “open,” yet trucks and warehouses still need to be operational to move trade. With 90% of trucking capacity sidelined, according to Seko Logistics’ latest update to customers, what would you expect?

American Shipper pulled the bills of lading from February to last Wednesday to see what types of summer items have arrived from Shanghai. Pools for Walmart, infrared saunas, camping gear like sleeping bags and tents, patio furniture, bicycles, and even golf carts have been moved by ocean freight.

“The ongoing COVID-19 lockdown issues in China continue to create additional supply chain disruption for U.S. retailers,” says Jon Gold, vice president of supply chain and customs policy for the National Retail Association. “The impact is being felt across the supply chain from factories to ports. 

“Ongoing challenges include factories struggling to get materials needed for production, difficulty moving products to the ports in part because of the driver shortage, as well as increased consumer demand. While the impact of the Shanghai lockdown is limited right now, it will grow the longer the restrictions are in place.”

Now the zero-COVID measures are extending to manufacturing hub Guangzhou. These lockdown contagions may be hailed as a “cure” in China at combating the virus; unfortunately, they’re also  destroying the health of the global supply chain.

More from Lori Ann LaRocco

Viewpoint: ‘Shanghai Surprise’ — and a new lockdown to worry about

Shanghai’s 2-stage COVID lockdown may make getting containers ‘almost impossible’