A resurgence of COVID-19 cases in China is prompting fears that the global supply chain crisis could drag on.
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- Localized COVID-19 lockdowns in the city of Ningbo are causing issues for truckers.
- There are concerns about delays at the Port of Ningbo ahead of the long Chinese New Year break.
- The Port of Ningbo is a key gateway for Chinese exports to the US.
Each week of pandemic-related delay at China’s Ningbo port could disrupt $4 billion worth of trade, according to Russell Group, a risk modeling consultancy.
Affected industries include $236 million of integrated circuit boards used in electronics and $125 million of clothing, some going to the likes of brands like Nike and Adidas, the consultancy added.
Ningbo is a key port for Chinese exports to the US, with more than $385 million worth of goods exported in the first eight days of January, the Russell Group estimated. It’s also the world’s third-largest container port.
“Any delays at Ningbo come at a bad time for global supply chains, which are suffering from the logjams created by the pandemic,” said the Russell Group.
Some disruptions are already being reported on the land side, as localized lockdowns to contain a COVID-19 outbreak in Ningbo’s Beilun district have prevented truck drivers from making it to their jobs. Drivers also need Covid tests to gain access to port areas, which cause additional delays, reported the Journal of Commerce. Additionally, some warehouses have been shut.
The developments are worrying traders who fear that the supply chain crisis could drag on, just as there were signs that it may be easing.
China has a strict Covid-zero approach to managing the pandemic and a recent outbreak of the virus has sent various cities into successive lockdowns head of the long Chinese New Year break that starts on February 1 this year.
“Unfortunately, the situation may get worse, with the Chinese Lunar New Year, as companies cannot stock up their inventories for the upcoming months, forcing them to either look for alternative shipping or products, all of which will feed into higher costs for the consumer,” said Suki Basi, managing director at the Russell Group.
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