Global Logistics Crisis Begins from Shanghai... World's No.1 Port Shanghai Port Congestion

Red Light for Chinese Economy as 23 Companies Preparing for IPO Face Listing Delays Due to Lockdown
Concerns Over Medical Collapse as 22 Shanghai Hospitals Suspend Outpatient Services Amid COVID-19 Surge

[Asia Economy Beijing=Special Correspondent Jo Young-shin] It is reported that there are as many as 400,000 containers waiting to be loaded at Shanghai Port, the world's number one port. It appears that the global logistics crisis originating from Shanghai due to the spread of COVID-19 has begun.

Photo by Global Times capture

Also, as COVID-19 spreads, an unprecedented event has occurred where 23 Chinese companies have temporarily postponed their initial public offerings (IPOs). In addition, it is reported that Shanghai's medical system is on the verge of collapse, with 22 hospitals in Shanghai suspending outpatient consultations. A red light has been turned on in Shanghai, the economic capital of China and a hub for finance and exports.

According to Chinese media including Global Times on the 31st, there are about 90 container ships waiting at Shanghai Port (Yangshan Port) for loading.

The number of containers delayed due to the Shanghai lockdown is estimated to reach 400,000 (based on 20-foot containers). This is the volume that 33 large container ships of 12,000 TEU each would have to carry at once.

Maersk, the world's number one shipping company operating its own berths at Shanghai Port, explained, "Due to the sequential lockdown in Shanghai, container truck transportation is facing difficulties," adding that compared to before the lockdown, there has been about a 30% disruption in truck transportation alone.

Since 6 a.m. the previous day, Shanghai Port has been issuing electronic passes to container truck drivers and conducting a separate procedure to verify COVID-19 negative test certificates. This means that the entry and exit procedures at Shanghai Port have become complicated, making port congestion inevitable.

Zhao Nan, a researcher at the Shanghai International Shipping Research Center, said, "Although Shanghai Port is operating under special management, it is impossible for it not to be affected by COVID-19," adding, "It will impact Shanghai Port's container throughput in March." He also expressed concerns that the regional economy will be hit by the current COVID-19 spread.

[Image source=Yonhap News]

Air cargo has also begun to be affected. Cargolux, Europe's largest air cargo transportation specialist company, has suspended its cargo flights. Cargolux explained that it will temporarily suspend operations until the 2nd of next month and monitor the COVID-19 situation. Other air cargo companies are also closely watching the COVID-19 situation, so the possibility of additional cargo flight suspensions cannot be ruled out.

In this regard, Global Times reported that the world's largest air cargo companies in North America, such as DHL Express and FedEx, are actively cooperating with authorities to ensure smooth services.

Xinhua News Agency quoted a representative from Shanghai International Port Group (SIPG) saying that to ensure normal port operations, they have digitalized the 48-hour negative nucleic acid test certificates for truck drivers, resolving the issue of container trucks entering and exiting the port, and expressed hopeful prospects.

The capital market is also being adversely affected. Twenty-three Chinese companies preparing for IPOs have temporarily postponed them due to city lockdowns. Chinese financial authorities hastily introduced incentives such as waiving listing fees.

There are also voices expressing concern about the collapse of the medical system, as 22 hospitals in Shanghai have suspended outpatient services due to the spread of COVID-19.

A representative from the Chinese Center for Disease Control and Prevention (CDC) said, "Shanghai's medical system is on the verge of collapse," adding, "Conducting COVID-19 testing for the entire city of Shanghai, with a population of over 24 million, by April 5 is a very difficult task."

Meanwhile, Chinese Premier Li Keqiang instructed at a State Council meeting held the day before that the local special bonds allocated at the end of last year should be issued by the end of May, and those allocated this year should be issued by the end of September. He also ordered a reasonable expansion of the scope of special bond usage separately from infrastructure investment to stimulate the economy.