Shanghai's economic activity: the long road back

The port of Shanghai is recovering after the lockdown was eased, but the traffic jam remains

Shanghai faces weeks, if not months, of slow recovery before economic activity can fully recover from the crippling Covid lockdown that began in March. Based on the experience of other Chinese cities, such as Wuhan in 2020 and Jilin earlier this year, it will take some time before shops can reopen or factories can secure supplies and ramp up production.

Although most of Shanghai's 25 million inhabitants have been able to move freely around the city again since Wednesday and some shops have reopened, many factories and businesses are still closed or operating below capacity. The city's largest port in the world is still congested and lorry traffic is at around a quarter of its pre-pandemic level. In Wuhan, it took until 2021 for the economy to recover from the damage caused by the first Covid-19 outbreak in 2020 and the subsequent lockdown that lasted more than two months.

While the Covid-19 outbreak in Shanghai was not as severe as the one in Wuhan in 2020, Shanghai has a larger economy and is more integrated into global supply chains than Wuhan. Shanghai and the surrounding provinces are one of China's industrial centres, where automotive and electronics manufacturers set up shop to access the port. The impact of the two-month shutdown on supply chains has rippled around the world, affecting the supply of key components.

Northern European container ports already operating at full capacity ahead of the peak season

While a wave of import containers is expected with the reopening of Shanghai and the peak season is just around the corner, the northern European hubs for containers remain heavily congested. Huge piles of empty containers have accumulated there as forwarders have cancelled a third of their announced departures during the two-month lockdown in Shanghai. Hamburg is sitting on a huge pile of export containers. The German industry works on a weekly basis, but the ships only arrive every nine to 12 days.

The terminals in Rotterdam and Bremerhaven are currently the most congested, resulting in waiting times at berth. Hapag-Lloyd's customer information states that capacity utilisation at the Hamburg Container Terminal Altenwerder (CTA) is 90 %.

Elsewhere, at the PSA terminal in Antwerp, utilisation at berth 869 rose again to 90 %; utilisation of the reefer plugs (reefer container E-ports) at berth 913 remained at 100 %, with the reefer containers being triple-stacked.

In neighbouring Rotterdam, Hapag-Lloyd is struggling with similar congestion problems. The severe congestion at the Benelux hubs is very bad news for inland shipping companies, which have apparently suspended all inland shipping traffic in Antwerp until 30 June. Feeder operators are also suffering from enormous delays when docking at the North European hubs.

Source: Loadstar, Wackett, hsc