As Chinese officials scramble to contain the country’s worst outbreak of Covid-19 since early 2020, they are imposing lockdowns and restrictions that are adding chaos to global supply chains. Any major port lockdown in China is likely to have significant negative effects on the global supply chain. Yet, China has doubled down on its “dynamic zero-Covid strategy” of lockdowns if there is any single reported case in an area. This is particularly important as the industry is still recovering from the effects of the Covid-19 pandemic including missing staff and disruptions. Then we have the geopolitical crisis of the Russian invasion of Ukraine which has led to a quasi-embargo of Russian cargo.
When China decides to impose additional lockdowns, recent history has shown that things in the global supply chain come to a standstill. Not least because China is one of the biggest exporters of merchandise in the world. The effects so far have included rapid rises in shipping prices and an acute shortage of shipping space. This is an urgent concern for the industry since up to 19 (out of a total of 31) mainland provinces in China have reported local infections. The shipping industry should brace itself.