Influence of Shanghai lock-down on international logistics

Since the first confirmed coronavirus case of Omicron variant strain was found in Shanghai on March 1, the epidemic has spread rapidly. As the world’s largest port and China’s important external window and economic engine in the epidemic, the closure of Shanghai will undoubtedly have a significant impact. It will not only impact the daily life of Shanghai residents and China’s economic development, but also affect the global supply chain and the prospect of economic recovery.

Shanghai is an important port in China. The total import and export volume from Shanghai port has reached 10.09 trillion yuan, that is to say, in addition to its own import and export volume of more than 400 billion yuan, Shanghai has also undertaken the import and export business volume of more than 600 billion yuan in other provinces of China. Nationwide, in 2021, the total value of China’s import and export of goods trade was 39.1 trillion yuan, and the import and export volume of Shanghai Port accounted for one quarter of the national total.

These international trade volumes are borne by aviation and maritime transportation. In the airport, the entry-exit personnel passing through Shanghai have ranked first in China in recent 20 years, and the cargo traffic volume of Pudong Airport has ranked third in the world in recent 15 years; In terms of seaports, Shanghai port has also been the world’s largest container volume for more than 10 years, with nearly 50 million TEUs a year.

Shanghai is the regional headquarters of many foreign-funded enterprises in China and even Asia. Through Shanghai, these companies coordinate and handle global commodity transactions, including overseas and domestic import and export business. This closure obviously has an impact on their business.

It is understood that at present, the problem of Shanghai port is still relatively large. It is difficult for containers to enter, but now land transportation can’t enter in line. As the trading center of many large state-owned enterprises or groups in China, Shanghai’s window companies or trading platforms undertake the global procurement and sales of these state-owned enterprises, which is why Shanghai’s import and export volume accounts for more than a quarter of the country. As they are the source of raw materials and sales center of enterprises in the national group, the long-term sealing and control will not only affect the business of these platforms, but also affect the operation of the whole group.

In the final analysis, the core of international trade is the flow of goods, information and capital. Only when goods flow can trade be formed. Now, due to the sealing and control of personnel, the flow of goods has slowed down. For an international trade center like Shanghai, the impact on large and small international trading companies is obvious.

Specifically, from the perspective of logistics, although the port is still processing, even if the arrival can be unloaded, the speed from landing at the port to transshipment to other places has slowed down significantly; For international shipments, it is a big problem to transport them from other parts of China to Shanghai port, and after arriving at the port, the arrangement of shipping will also be affected. After all, some ocean going cargo ships at sea have stopped and are waiting for unloading or loading.

Flow is the basis of trade, and the flow of people, goods, information and capital can form a closed loop of trade; Trade is the basis of economic and social operation. Only when industry and trade are combined can the economy and society recover its vitality. The challenges facing Shanghai now affect the hearts of China and its partners in the world who care about China. Globalization makes it possible for China to propose a community with a shared future for mankind. China cannot be outside the world, and the world cannot do without China’s participation. The symbolic significance of Shanghai here is therefore particularly significant.

The world expects Shanghai to get rid of its difficulties and restore its consistent vitality as soon as possible. The import and export business in Shanghai and even the whole country can resume normal operation as soon as possible and continue to shine and heat for globalization.

Post time: Apr-26-2022