Delays at local ports manageable amid Shanghai lockdown

Other ports in China are doing fine with their services are still arriving on time


CHINA’S lockdown has obviously delayed the shipment in the country, however, the impact was minimal, Port Klang Authority GM Captain K Subramaniam said.

“We have seen some drop in the cargo that is coming from southern China especially since the lockdown. So, ships are getting delayed coming over here (Malaysia).

“But we are still seeing other ports doing fine such as Xiamen and Chengdu as their services are still arriving on time,” Subramaniam told The Malaysian Reserve (TMR) recently.

China’s zero-Covid strategy has forced its largest city of Shanghai — one of the world’s largest ports to extend its lockdown indefinitely.

Just a while ago, China reopened its tech hub city, Shenzhen, which is the world’s third-largest port after a week-long lockdown that has threatened the global supply chains as reported by the US media.

More than 100,000 cases have been reported in Shanghai since March, despite having managed to contain the virus before. Up to 25 million residents in the city were locked down last week, with more reports emerging of the growing dissatisfaction over the measures and difficulties of getting food.

Meanwhile, Subramaniam said he is cautiously optimistic with the country’s transition to the endemic phase and borders reopening despite possible delays at port by China.

“Anything China does will affect us, and in this case, China is going into isolation while most countries are opening up.

“Certainly, people around the world are going to feel the pinch (from China’s port lockdown) because they will not be getting their goods on time and industries are going to have problems,” he said.

In regards to the economic recovery, Subramaniam said Port Klang is back to “almost normal”.

“When I said ‘almost normal’, we still have one or two issues coming up now, especially like this one (China’s lockdown), then we also have some issues of backlogs from other ports.

“Any flashpoint like the geopolitical issue is going to affect all around the world. But on the other hand, the world is also opening up rapidly as well as businesses. I’m sure that there will be a lot of demand for goods in the upcoming months,” he noted.

According to him, Port Klang remained on the grip during the first quarter of this year although the import cargo volume declined in February, while export cargo volume is recovering.

“We are not really seeing a drastic change. The volume dropped in February but our local imports and exports have increasedoverall although it is not as good as last year,” he said.

Notably, he said the country’s port is doing well in the first months of 2021 but dropping slightly due to several consolidations, however, he expects the whole process in the port to regain balance soon.

“We are definitely looking forward to the reopening of borders because a lot of industries — whether it is the food or hotel industries — are going to increase in terms of goods transportation,” he added.

Nevertheless, he said the port could not afford any more disruptions as China’s zero-Covid strategy is continuing to be a problem for quite some time.

Meanwhile, Moody’s Analytics senior economist Tim Uy said China’s zero-Covid strategy is expected to have a huge impact on China compared to other countries.

“The impact will certainly be felt domestically in China, particularly in regions that have been locked down in phases,” Tim said in an email reply to TMR.

He also views that the significant impact to the global supply chains from China’s lockdown remains uncertain for now.

“However, if ports in China start to close, that would be quite disruptive to the global flow of goods and services,” he said.

Concurrently, China’s port is operating normally to keep the supply chain running smoothly despite the extension of lockdowns.

Although China’s lockdown may not impose huge disruptions in the global supply chain, Tim opined that energy prices and the rising price of raw materials are expected to feed into higher transport costs as inputs for many manufactured goods.

“The passthrough will be pervasive and likely affect the most energy-intensive sectors,” he said.