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  • COVID resurgence in China, rising costs pressurise global supply chain 03/28/2022

    Mar 28th, 2022

    With China fighting a COVID resurgence and announcing new restrictions and lockdowns in several cities, waiting container ships at several ports there like Qingdao are rising, putting further pressure on a strained global supply chain. The Russia-Ukraine war is also severely disrupting shipping and air freight. As Russian forces cut off shipping routes, logistics firms are suspending services and air freight rates are skyrocketing. In South Korea too, government data showed outbound container shipping costs shot up in February from a year earlier, posing a big burden to exporters. There is usually a build-up of vessels seeking to enter China following the Lunar New Year holidays, but volumes this year are being exacerbated by lockdowns aimed at curbing outbreaks of the novel coronavirus. There’s also a growing backlog of vessels off the ports of Shanghai, Ningbo and Zhoushan. The situation off Shenzhen and Hong Kong, however, has reportedly eased a bit. Shipping lines like AP Moller-Maersk have cancelled services to Russia and halted some rail shipments from China into Europe. A continuing surge in global oil and gas prices due to the Russian invasion of Ukraine are adding to inflation risks in China as factory costs remain elevated. The average rate for a 40-foot container from South Korea to the European Union came to 14.02 million won ($11,300) in February this year, up by 261.5 per cent from a year earlier, according to the data from the Korea Customs Service. Compared with the previous month, the cost was up by 9.5 per cent. The average freight rate for a 40-foot container from South Korea to the US west coast also surged by 188 per cent year on year to 15.57 million won in February. Industry experts are concerned that container shipping rates could rise further due to increased volatility stemming from Russia's invasion of Ukraine.


    Source: https://www.fibre2fashion.com/
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