China’s covid lockdown affecting supply chain - ShipRx
Blog / Shanghai’s COVID lockdowns set to impact global supply chain
2 minutes read

Shanghai's COVID lockdowns set to impact global supply chain

A robotic dog named Preserved Egg roams the streets, barking orders at citizens to wash their hands, take their temperatures, and stay inside. Overhead, drones announce that residents should not gather illegally or stir up trouble. This isn’t an episode of Black Mirror. This is Shanghai. The city of 25 million locked down as cases of COVID-19 spiked, crippling the largest port in the world.

Shanghai plans to ease lockdowns and reopen factories, but the damage has already been done. Manufacturers are having trouble getting parts due to the lockdown, and many truckers cannot make deliveries in the region due to permit issues. While the Shanghai port has technically remained open, labor shortages mean containers are stacking up, and trucks cannot unload products efficiently. What’s happening in Shanghai is set to send shockwaves across the global supply chain. 

Why does the Port of Shanghai matter on a global scale?

It seemed the bottleneck issues from the ports in Los Angeles and Long Beach, California were in the past. Now, Shanghai’s COVID lockdowns threaten to plunge us back to service disruptions of an unprecedented scale. 

In 2020, the US imported $434.7 billion worth of goods from China, making it the US’s largest supplier of goods imports. Since 20% of the country’s exports move through the Port of Shanghai, these backups are a big deal.  

On April 11, Bloomberg reported 477 bulk cargo ships moored off the coast of China, waiting to make their deliveries. Of those, 222 were waiting off the coast of Shanghai. An additional 197 ships are loading or preparing to load in Shanghai. 

For now, customers can expect long delays. However, once the port reopens at full capacity, another supply chain surge may cause the bottleneck issue to flare once more. Hopefully, with new protocols and 24-hour operations, any backlog will be minor compared to the problems of 2021.

How are FedEx and UPS handling shipments to and from China?

If you’re trying to ship goods to or from Shanghai by UPS, you’re out of luck. Until further notice, the carrier has suspended all shipments to and from Shanghai Pudong and Punan. UPS has also suspended its service guarantee on all intra-Asia UPS worldwide expedited services.  

FedEx has a similar policy, stating, “Due to the COVID-19 lockdown in Shanghai, China, and impacted operations at Shanghai Pudong International (PVG) Airport, all inbound services into Shanghai, Jiangsu, Zhejiang, Anhui, and Jiangxi are temporarily suspended.” They have also suspended their Money Back Guarantee policy for all packages affected by these new restrictions.

It’s an uncertain time if you rely on products from China or your vendors use raw materials imported from there. To minimize your impact, know who supplies your products and make changes if necessary.

No matter what delays are happening worldwide, you can trust ShipRx to reduce your FedEx and UPS parcel spend and recover the refunds you deserve. Sign up for our parcel audits or parcel rate negotiations for free– you only pay when you’re saving money.

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