News

Lockdowns in China Block Truck Shipments and Factory Closures


BEIJING – China’s coronavirus-linked restrictions are creating further disruption to global supply chains for consumer electronics, car parts and other goods.

A growing number of Chinese cities are requiring truck drivers to perform daily Covid PCR tests before allowing them to cross city borders or are quarantining drivers deemed at risk. . The measures have limited how quickly drivers can move parts between factories and goods from factory to port.

Shanghai and other major Chinese cities have imposed lengthy and strict lockdowns to try to control the Covid outbreak. Previous disruptions in the supply of goods from Chinese factories to buyers around the world were mainly related to the temporary closure of shipping ports, including in Shenzhen in southeastern China in May and June of last year and after near Shanghai last summer.

Jarrod Ward, East Asia business development manager at the Shanghai office of Yusen Logistics, a major Japanese supply chain management company, said: “The problem is not the ship, but the lack of arrivals. because there is no truck.

Truck driver checks have been held as several cities are conducting mass screenings of residents. Shanghai basically tested all 25 million people within its borders in a single day on Monday and detected 21,000 more cases on Thursday.

Currently, there is a severe shortage of truck drivers in Shanghai and nearby cities such as Kunshan, an electronics manufacturing hub. Many electronic component manufacturers are closing in Con Son.

Julie Gerdeman, chief executive officer of Everstream, a supply chain risk management arm of DHL based in San Marcos, California, said: “Critical suppliers of electronics to Apple, to Tesla , all of which are based there.

Apple declined to comment and Tesla did not immediately respond to questions.

Many factories have tried to stay afloat by letting workers stay at work instead of going home. Employees slept on carpets for four weeks in several cities in northeastern China. Companies have been storing goods in nearby warehouses while waiting for trucks to return to normal.

But as shutdowns dragged on in cities like Shanghai, Changchun and Shenyang, factories started running out of raw materials to assemble. Some are sending their workers home until further notice.

To make a car seat, for example, requires different springs, bolts and other materials. Mr. Ward said car seat manufacturers have run out of components. Volkswagen said the company had closed a factory outside of Shanghai.

While cases in Shanghai have increased, its main rival in electronics manufacturing, Shenzhen, has emerged from lockdown. That frees up the workers and factories there to keep producing at full speed.

Retailers and manufacturers in the West have tried to adapt to previous supply chain constraints in China by switching from ocean freight to air freight, but air freight rates have more than doubled. double from last year.

Zvi Schreiber, chief executive officer of Freightos, a cargo booking platform, said the near-total halt of passenger flights to and from Shanghai has almost halved air freight capacity. there. The war in Ukraine has forced many airlines to schedule longer flights around Russia and Ukraine, meaning each plane can make fewer trips in a week and can often carry less weight. on every flight.

The war in Ukraine is also beginning to affect the availability of Soviet-era Antonov transports, Schreiber said. These horses of the air transport industry have been maintained in recent years almost entirely by Ukrainian maintenance facilities that are now closed.

For companies, any additional disruption to the global supply chain will come at a particularly difficult time, given rising raw material and transportation prices, coupled with extended delivery times and poor conditions. worker shortage.



Source link

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button
Immediate Peak