Covid restrictions and New Year holidays are taking a hefty toll

No relief for China's overstretched supply chains

Covid lockdowns, quarantines and restrictions are causing a backlog in some of China's major ports, resulting in "chaos" and pushing up air freights by as much as 50% in some cases. Ahead of the extended Lunar New Year holiday in China, air freight rates have spiked and some shipping firms have suspended services.

This situation is problematic as China pushes ahead with its zero-Covid strategy, which means a recent spike in infections has resulted in lockdowns and curbs in the largest port hubs and major cities across the country.

Atul Vashistha, founder and chairman of supply chain consultancy Supply Wisdom: "Although ports are still open, current restrictions – like mandatory quarantines and testing – continue to slow down transport and cause delays. … China's key priority right now is to limit the spread of Covid cases ahead of next month's Winter Olympics and the upcoming Lunar New Year.”

"Products are piling up while ships are banned entry. Between negative PCR-test requirements and last-minute re-routing, 2022 is starting off like 2021 ended: chaos," Vashistha added.


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