After a relatively successful “no-Covid” plan put into place by the Chinese government, in mid to late March ’22 Chinese officials were forced into issuing a Shanghai lockdown due to a daunting spike in their COVID cases, reporting a record high of 16,766 on the 6th of April. Shanghai is a huge player in the Chinese economy, proving to be somewhat of a financial giant; and with the city in a strict lockdown this has had some detrimental effects spanning across the entire supply chain.
Although the effects of Shanghai being in a lockdown are much more detrimental than other affected areas in China, the lockdown as a whole within China, because of their hugely important presence across the supply chain will result in worldwide effects. Industry experts state that UK businesses could begin to see “delivery delayed by a month or two” & “costs going up” if these strict COVID policies continue.
How strict are the lockdowns?
The current lockdowns in China extend over more than five major cities, Shanghai being a particularly impactful lockdown, but how strict are these rules and regulations?
In certain provinces across China residents are banned from leaving their neighbourhoods, only essential workers & emergency service workers are allowed to venture any further. Other areas present residents with much stricter rules, only allowing them to leave their houses in case of emergency.
Truck drivers across China are made to take a PCR test daily before they set out on their route, furthering the time it takes from goods to get from where they are to where they need to be. This alongside factory closures & shipments being halted at docks all the way across China puts intense strain on the Chinese supply chain, and as stated previously this has a rippling effect on the wider worldwide supply-chain.
As the supply chain has taken a hit that is “worse than Wuhan” from the current lockdowns, we can definitely expect to see some difficulties to be popping up for the foreseeable future. Interestingly, according to predictions we have come across online, it appears that the cost of living crisis within the UK will mean that the average UK consumer will spend “more on services & less on goods” with this alongside consumer price inflation at a 30 year high; spending habits are definitely on the road to change, hopefully by the time UK consumers are ready to spend their money on goods the wider effects of the current Chinese lockdowns will have mellowed.
It seems that as of the time this article was posted, there are more & more restrictions being introduced. Uncertainty in the supply chain has been something that all of us within the logistics industry have been facing for the last few years, all we can do it try our best to plan & adapt to the constantly changing industry we’re all a part.