The following China regions, Qingdao City, Shandong Province and Henan Province, are experiencing new Covid 19 outbreaks and have resulted in corresponding shutdowns. These recent shutdowns have resulted in the following:
- Factories in the regions are locked down and inactive
- Outbound freight from those affected factories is currently halted
- Bookings meant for those outbound goods have obviously been cancelled
While no one can anticipate how long these lockdowns will last, shippers need to remember that China’s Zero COVID policy is still active and sudden disruptions will continue to unexpectedly occur as long as that policy remains in place.
Therefore, it is possible that these current shutdowns or later shutdowns could result in longer than average ocean freight delays, which could compound the current situation on U.S. railways. Additionally, since a labor agreement has not yet been reached, it is also possible that the ILWU leverages these shutdowns or future shutdowns, which could result in severe backlogs and/or a shortage of carrier space and equipment.
As a result, we are advising all companies affected by these continuing shutdowns to be prepared to make adjustments to ensure the fluidity of their supply chain, including adjusting supply chains to address both short-and-long-term needs. Supply Chain disruptions, as we all know now are part and parcel of the “new norm.”
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