As COVID-19 cases continue to rise in China, the shipping supply chain could be heavily impacted as factories are closed.
China has a zero-COVID policy, and has enforced strict lockdowns in cities including Shenzhen and Jilin. Under the lockdown measures, people have to stay home unless they are considered essential workers.
As a result, queues have been forming in major Chinese Sea ports, including at Shanghai, Ningbo-Zhoushan and Qingdao.
However, reports are saying that operations at the ports have been running normally. Even so, the impacts could prevent factories from making enough goods to ship, which could cause backlogs later on.
In the United States, the Ports of Los Angeles and Long Beach have been dealing with heavy backlogs. The queues outsides the ports has started going down, but they could return once more ships are able to leave out of Chinese ports once the lockdowns are lifted.
Last year an outbreak in COVID cases closed the Shenzhen port, which had throughput decrease about three-quarters for several weeks. Ports in Europe and North America were backlogged when Shenzhen finally reopened as a result.
With this current lockdown being more widespread, the effects on shipping could be even greater.
The effect of this lockdown may also have similar backlogs for the U.S. like when the Ever Given container ship that blocked the Suez Canal last year.
Shipments from suppliers including Toyota, Volkswagen, and FoxConn could be impacted by the lockdown.