Good Morning Clients & Partners,
A Happy New Year to you, we look forward to working with you in 2023, and thank you for your continued support.
Herewith a quick update focusing on China & The Far East:
Covid
• China has seen a massive outbreak of Covid nationwide, with ½ or even ¾ of the labour force being infected and not able to work.
• This will have an impact on port productivity, warehousing & trucking operations as well as customs processes – All of which impact freight flows.
• Some of China’s biggest ports are already experiencing serious disruptions including Shanghai (The world’s 2nd biggest Container port), Shenzhen (The world’s 4th largest container port) and Qingdao (The world’s 6 largest port). In Qingdao specifically some reports estimate that at factories are running on a quarter of their labour force due to the COVID wave.
Chinese New Year
• China, Hong Kong and Taiwan will celebrate the Chinese New Year from 21 – 27 January, while Korea, Singapore and South East Asia will celebrate the Lunar New Year on 22 January. During this period there will be increased Blank sailings & Vessel schedule changes and in general decrease in the pace of exports Ex-The Far East that will likely last from the 2nd half of January through to early February.
• Due to the movement of hundreds of millions of people travelling home to spend time with family over the New Year holiday, a second Covid wave is also expected from late January to mid-February.
• We could start to see a sharp increase in volumn of shipments from mid-February, which may push the freight levels up. Early bookings advised.
On a more upbeat note, some economists are predicting China’s return to faster economic growth after the 1st quarter of this year – which may power the world’s economy.
For more in depth reading on the above points:
https://www.cnbc.com/2023/01/05/chinas-new-covid-surge-is-crippling-the-worlds-most-important-factories-and-biggest-ports.html
https://www.ajot.com/news/freightos-weekly-update-freight-rates-and-congestion-levels-point-to-normalizing-supply-chain
As always, we will continue to monitor the situation closely and ensure we minimize the negative impacts to your supply chains.
Best Regards
JJ & The Inter-Sped Team
