Cargo Backlogs in China as the Covid Crisis Drags On
6-minute read
As Shanghai enters the fourth week of its zero-tolerance Covid lockdown, forward export bookings are said to be down by 40% or more, prompting carriers to consolidate loads and blank more sailings.
According to one carrier contact, lines may be obliged to implement a “hardcore” blanking strategy to mitigate the impact of the cargo shortfall. The source said many of the numerous containerships currently at anchor off Shanghai port are “simply waiting for new orders”.
The concern is growing that the spread of COVID cases and city lockdowns in China will have massive downstream effects on global supply chains that could surpass previous disruptions since the pandemic.
Do Not Put All Your Freight Eggs in One Basket
13-minute read (45-minute listen)
Lockdowns, ports congestion, war, lack of slots and flights – you name it, the supply chain has seen it all.
In this podcast of the Loadstar, a news resource for the global logistics industry, Mike King looks at the implications of more Covid-19 lockdowns in China, the latest on air and shipping capacity and prices, port congestion challenges, and what war in Europe is doing to air cargo markets.
China Import and Export Fair Goes Online
3-minute read
China Import and Export Fair, aka Canton Fair, is one of the biggest trade events on the international trading calendar.
It is a platform for people who want to source products from China or current importers who want to see the latest China has to offer, find out about new trends for specific types of products, look for ideas for their businesses, and build long-term business relationships with Chinese suppliers.
It features products like Electronics & Household Electrical Appliances, Lighting Equipment, Vehicles & Spare Parts, Machinery, Hardware & Tools, etc.
The fair – held every year since 1957 – is the largest of its kind in China in terms of scale, variety, distribution of overseas buyers and business turnover.
However, this month’s event must go solely online, as China’s worst coronavirus outbreaks in two years have triggered lockdowns across the country, including in Shanghai’s financial and trade hub.
And parts of the country that have evaded lockdown are encouraging social distancing.
The fair’s operator said that exhibitors will now live-stream their products from April 15-24. Those hoping for an in-person event were left disappointed at the news that it will be online only this time.
Increasingly overwhelmed by supply-chain disruptions and soaring raw material costs, Chinese exporters are feeling the pinch from Covid-19 restrictions and Russia’s invasion of Ukraine.
Ding Qiangyu, a Guangdong-based exporter of car parts, was eager to meet other exporters face to face to help him assess the state of the industry and discern information that may not come out in a virtual forum.
“We actually really wanted to participate in the Canton Fair this month in hopes of reaching out to exporters in other industries, so at least we could get together and know a little more about their expectations and thoughts about the dramatic changes in trade,” Ding lamented after hearing the event will be online only.
Before the pandemic, the spring and autumn sessions of the Canton Fair in 2019 respectively attracted 195,454 and 186,015 buyers to Guangzhou. Foreign buyers from more than 200 countries and regions across the world also took part.
However, at the October 2021 event, the biggest concern among Chinese exhibitors was the rising cost of production amid global inflation and lack of foreign buyers, as coronavirus-related travel restrictions hampered attendance.
“We received no new orders at the Canton Fair this time [October 2021], which was within our expectation,” said Vicky Yang, a bag producer from Fujian province.
Kevin Huang, a furniture exporter, also said his business had received fewer orders since October.
“First-quarter orders this year were miserable, the second-quarter outlook is not optimistic … Inflation…and market concerns about the war, all will directly affect our orders because the furniture will become non-essential goods,” Huang said.
Exporters in China such as Ding Qiangyu are battling uncertainties resulting from soaring inflation, the Ukraine war, geopolitical disputes and China’s strict zero-Covid strategy.
Ding’s firm is now holding almost 10 million yuan (US$1.57 million) worth of goods in inventory. The warehouse space used and the rent are twice what they were last year, as he is trying to minimise the impact of rising raw material costs.
The survey by the American Chamber of Commerce on the impact of Covid-19 restrictions conducted from March 29-30 found that more than half, or 54 per cent, of foreign companies operating in China, had to cut 2022 revenue projections following the recent outbreaks, while 38 per cent said it was too early to gauge the impact.
A total of 167 member companies took part in the survey, including 76 manufacturers. Among the manufacturers, 86 per cent said their supply chains had been disrupted, and 82 per cent said they had slowed or reduced production.
How to attend the Canton Fair?
The 131st Canton Fair will be held online for 10 days from April 15th to 24th, and the Buyer Service Platform is available for buyers to register or log in: https://www.cantonfair.org.cn/en-US/register/index
Source: South China Morning Post
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Global Efforts to Prevent Anti-Competitive Conduct in the Supply Chain
4-minute read
Competition authorities around the world – including our own here in New Zealand – are investigating the current state of container shipping markets and the rates being charged to exporters and importers.
Shippers and freight forwarders are irate about freight rates, restricted access to slots, and the expansion of shipping lines into other parts of the market. It has led to several calls for action.
