HIGHLIGHTS
- New lockdowns have been imposed in Shenzhen as COVID-19 cases continue to rise.
- The lockdowns have affected international supply chain as well as manufacturers devastatingly.
FULL ARTICLE
New infections in Shenzhen
According to the Shenzhen COVID-19 Prevention and Control Command Office, 11 districts in this city are on lockdown. Local officials also restrict movement of more than 17 million residents.
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The southern Chinese city reported 86 new locally transmitted cases of COVID-19 on Monday. These are said to follow surges in the country, including an outbreak in Shanghai of about 480 cases.
The impacts of lockdowns on supply chain
The lockdowns are compared to a “major shock” to supply chains already straining to meet demand, said Schlingmeier, founder and CEO of xChange. Their effects will combine with the closure of the Asia-European railway, expected to push high-value cargo to a low-capacity ocean freight market.
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Shenzhen’s port handled 26.55 million TEUs of cargo in 2020. The port saw an 8% drop in average container price in the past two weeks.On top of that, the lockdowns are expected to heavily restrict container movement, according to Container xChange.
Impacts on manufacturers
FoxConn Technology Group, an Apple supplier, suspended production at its factories in Shenzhen without a specific timeline for resumption, CNBC reported. More than 40 Taiwan-based makers of semiconductors and other electronic components said they would temporarily close facilities in Shenzhen, The Wall Street Journal reported.
Minh Hong
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