As a result, the world may see further price hikes and deeper delays in the days and weeks ahead, Flexport said in a press release.

It is fair to assume that cargo originating in Shenzhen will remain in place for at least the next week. Many factories are also being closed during this lockdown period, with announcements to this effect already being made by major regional shippers Foxconn, Flextronics and others, the company noted.

Some factories are open, but they cannot utilise the space as their industrial parks are not allowing third-party truckers from outside of their home city to enter and pick up the goods.

Ocean carriers have not confirmed any blank sailings in Yantian as of March 15. They are busy evaluating their top beneficial cargo owners and volumes booked by non-vessel operating ocean freight contracts for the coming two weeks.

Ocean freight ports and terminals are currently still operating in China but ports cannot operate with just ships coming in. They need workers and truck drivers to move products out of warehouses.

With workers being confined to their homes, disruptions are imminent. There are no immediate actions on the part of carriers in the region—they are collecting information on the impact on their clients before announcing further actions, the company said.

Air freight is seeing less immediate impact as cargo is not being held at airports. However, with staffing becoming a growing concern, that’s expected to change soon.

The border is shut down for all commercial air cargo between Shenzhen and Hong Kong. This closure is expected to last for a minimum of a week; however, estimates are for a longer period which may extend to two to four weeks, Flexport said.

This is already placing increased demand on alternate routes, increasing market rates on these routes. Linehaul services between provinces will be subject to quarantine measures, therefore limiting routing options. Air options may be further impacted by additional trucking restrictions in the coming days.

Trucking operations still continue in China but with various dependencies, such as depot, shippers’ loading location. While trucking operations are being allowed to continue, quarantine guidelines between cities and provinces make market capacity unpredictable, it said.

Flexport foresees the overall trucking operational efficiency in China will be significantly reduced due to the requirements for frequent nucleic acid testing (NAT), especially in Hong Kong, Shenzhen, West Pearl River Delta, Shanghai, Yangtze inland ports, Qingdao and Tianjin. As a consequence, market capacity is very unpredictable at this moment, it added.

Fibre2Fashion News Desk (DS)