Backlog Concerns As Shanghai Recovers

As Shanghai recovers and becomes increasingly closer to the end of its 2 month lockdown period, the industry is expecting a huge volume of backlogged containers to impact capacity in the next few weeks.

Restrictions in the city have gradually been reducing and in some districts residents have been given the freedom to leave their homes. The end of the lockdown seems to be in sight and on track for the beginning of June.

Shanghai’s production output has been severely impacted during this time and estimated to be around 60% down on the same period last year, which has resulted in port omissions.

Since mid-April, ocean freight carriers have been diverting many of their voyages to other ports, which is seemingly going to create a huge backlog when exports get back into full swing.

Industry experts estimate that up to 260,000 TEU of export cargo was not shipped from Shanghai during the past few weeks. This number is equivalent to around 13 mega ships (20,0000+ TEU each) of additional space required during the build up to peak season.

Concerns are therefore mounting that we could be heading back to a period of significant under capacity.

Now, this isn’t news that the team at Westbound like to share, and things may transpire differently, but we believe it is important to share what the market is suggesting – being forewarned is being forearmed!

On a positive note, there are positive signs that more and more cities in China are bringing Covid back under control.

Should you require further information on the above, then please do not hesitate to contact us.