The port is considered the largest in the world, and the consequences of the congestion are strained supply chains, slower imports and rising inflation around the world.
Dozens of cities in China are currently under partial or total blockade following a new outbreak of coronavirus cases in the country due to the spread of the omicron variant. The situation puts the Chinese authorities’ controversial “Covid zero” strategy at risk.
With 25 million inhabitants and a vital weight for the country’s economy, the city of Shanghai is suffering the worst wave of Covid since the pandemic began in Wuhan more than two years ago.
The Chinese metropolis is not only a global financial centre, but also one of the most important cargo ports for international trade. For the past ten years, it has been the world’s largest port in terms of cargo handling. By 2021, the port of Shanghai accounted for 17% of China’s container traffic and 27% of exports.
However, the confinement of the city makes it difficult for trucks to take goods elsewhere or distribute them to nearby factories. Many industries, such as Volkswagen and Tesla, have had to shut down.
“The restrictions mainly affect the roads in and out of the port, leading to a backlog of containers and a 30% reduction in productivity,” explains Mike Kerley, investment director at Janus Henderson.
Added to this is a shortage of port workers to process the paperwork needed for ships to unload their goods or do exit inspection.
Ships are now also crowded on the waterfront and in the canals surrounding the port, waiting for the green light to dock.
Data from consultancy VesselsValue shows how waiting times for tankers, bulk carriers and cargo ships have increased.
Another problem is that thousands of containers are piling up at the port, again putting the global supply chain at risk just when analysts were confident of its recovery from the pandemic.
Although the port continues to function, it is increasingly clogged.
In Portos e Navios