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Air cargo demand out of Shanghai has dropped to one third compare to last year, in response to a city-wide lockdown that has stalled production.

11 May 2022

By Jennifer Chang.    Photo:Marina Hinic

Shanghai continues to be in lockdown due to a lot of Covid cases. A round of Covid-19 testing will be conducted in the coming days to determine which areas of Shanghai can safely begin reopening. But cities near Shanghai have also seen an increase in Covid cases, and some areas have already started imposing similar lockdowns. Beijing is now waiting to see whether the lockdown will be imposed. Compared with the beginning of April, Shanghai flight capacity has recovered slightly, but the main bottleneck is the lack of truck capacity. Due to the repeated epidemics in many parts of China, logistics and freight are facing many problems such as tight supply, insufficient transportation capacity and high costs. As the most critical figure in the "artery" of freight, drivers are facing more and more pressure and difficulties, and the logistics industry is facing a huge challenge.

Zhengzhou, Beijing, Guangzhou and Shenzhen airports have been experiencing congestion when handling cargo diverted from Shanghai's Pudong Airport. Transportation to and from PVG Airport remains strictly controlled, although many flights remain suspended. As China's main international hub, this has resulted in traffic from outlying regions being diverted elsewhere. Airports such as Zhengzhou, Beijing, Guangzhou and Shenzhen have been suffering from this diversion of cargo, resulting in congestion, shortages of airline pallets and insufficient or no capacity for cargo storage. Shanghai's shipping capacity picks up, but trucking issues remain. The Covid-19 measures implemented in Shanghai and Ningbo are putting pressure on regional transport and logistics, with delays and longer waiting times for ships and limited transport in and out of seaports and airports, resulting in higher road transport costs and waiting time costs in affected areas, the report said. Exports from major Chinese ports will fall further due to recently restarted factory production and restrictions on connecting shipments, which will add more pressure to the supply chain. Meanwhile, capacity is tightening in South Korea as air cargo is diverted from North China to South Korea due to the ongoing Covid-19 lockdown.

The blockade measures are affecting Shanghai's air freight business, and due to limited trucking resources, trucking fees are at high levels, and pick-up times are delayed by about three to five days, putting pressure on the supply chain. Lockdowns are spreading across China, although measures in Shanghai may ease in May. Under the background of dynamic zero-COVID policy, the epidemic prevention and control will not be relaxed for a long time in the future, and the problems of tight supply and shortage of transportation capacity will continue to exist.

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