Lockdowns began in Shanghai on April 2nd and in Guangzhou on April 11th according to FreightWaves as reported yesterday. These top Chinese cities are number one and five, respectively, in size measured by urban area population and the largest and forth largest ports in the world. Together, “the two port cities handle nearly three times the amount of cargo that the entire U.S. imports each year.” The Chinese shutdowns are much more draconian than in the west and are expected to send substantial impact around the globe including to American supply chains. (See FreightWaves, “Chinese lockdowns will create shocks …” Craig Fuller, April 18, 2022)

Many are expecting demand in the industry to drop back to 2019, pre-pandemic levels. If this trend occurs along with the increase in costs and supply in recent quarters, there can be a drastic fall in rates.  Craig Fuller, CEO at FreightWaves, points to the potential of hitting a “bloodbath baseline” for trucking companies as he explains, “Assuming that the truck is being driven by an employee driver, spot rates below $2.63 per mile could spell disaster for trucking fleets if that rate persists for long.” (See more at FreightWaves, “Trucking industry will be in trouble if demand drops to pre-COVID levels” by Craig Fuller, April 6, 2022)

Even though the city port is open, the eastern part of the city was under lockdown this past Monday while the west side is planned for lockdown as well on Friday, reports American Shipper this week. Regardless of the port status, workers and drivers will not be available to go to work due the lockdown unless working mobile from home. Manpower shortages and delays on container delivery to ports are expected. (See more at American Shipper, “Shanghai’s 2-stage COVID lockdown….”, Lori Ann LaRocco, 3-28-2022)

The container ship, Ever Forward ran aground in the Chesapeake Bay (Maryland) Sunday night after departing the Port of Baltimore. Fortunately, the stuck vessel is not blocking any channel traffic, but presents a major challenge for the Coast Guard to assess and provide a safe solution to free the ship safely and avoid environmental damage. The apparent ship owner, Evergreen Marine Corp (Taiwan), also experienced another well-publicized mishap when one of its ships, Ever Given, became stuck in the Suez Canal just a year ago which created major global shipping delays. (Link: ABCNEWS, “Cargo Ship stuck …..” by Bill Hutchinson, March 15, 2022)

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The Voerman Group, which has a large relocation, moving & logistics company in Russia, released information yesterday on the impact of the war for shipping as a whole, now and in the weeks to come. The report explains that “All business has stopped to Ukraine and Belarus due to the security situation. The trucking prices in Russia have increased up to 400% for import and 300% for export, (and) a serious shortage of drivers in international road transport is looming in the coming weeks.” (Click Read More for full Voerman Release)

One may recall the cyberattack that hit Maersk back in 2017 that took the shipper a few weeks to return to full running operation. It was reported that the Maersk damage was incidental to a larger plan that agencies claimed was a Russian cyberattack upon Ukraine. The situation now in 2022 is very different with the global supply chain severely stressed, currently having no buffer capacity. Any interruption due to cyberattack in a port, shipping or terminal operation would have major negative impact on the global supply chain. (Info & Video – see “Container Markets” at American Shipper, “Shipping braces for impact …” 2/22/22, Greg Miller)