China suffers a wave of infections again COVID-19especially in the southern city of shenzhen, a key point not only for having the , but also for being the quintessential Chinese technological capital. This new wave of coronavirus infections has caused the local authorities to decree a confinement that, in practice, paralyzes industrial activity in the city until (at least) March 20. Port logistics activity remains, for the time being, active.
But that will not prevent the impact of this measure on the global supply chain.
Shenzen, the Chinese Silicon Valley
Some experts have baptized the gigantic city of Shenzhen (17.5 million inhabitants) as “China’s Silicon Valley”for being the electronic technology manufacturing heart of the planet and home to giant Chinese companies such as Huawei, Tencent, OPPO and ZTE. Thus, the confinement and blockade of industrial activity in the city could have important consequences for the technology sector, including a worldwide shortage of technological components and devices.
In fact, Foxconnone of the leading providers of Apple and Samsung and main assembler of the iPhone, has announced the temporary suspension of its production lines at its Shenzhen factory, which would represent a potential shortage of components for different technological products. Others of the great affected by the confinement in the city could be Intel, Toyota or Volkswagen, They also have great local suppliers.
And all this in the midst of a global chip supply crisis.
What impact would the closure of the port have
In this situation, the company Seko Logistics has warned its clients about the impact that the closure of the Yantian port would have in terms of shipping traffic by sea. Similarly, other companies have warned, such as Worldwide Logistics Group and Orient Star Group about a possible interruption of port business in Shenzhen.
The warning note issued by Seko and published last Sunday explained that, due to the restrictions “Cargo Packing Cannot Be Done In Yantian… And Ships Will Most Likely Disregard Disembarking At Port”. However, on Monday afternoon Seko issued a corrected notice. “We have been informed that the Yantian port terminals are operating, loading and transporting cargo”the statement said.
For its part, the transport restrictions for vehicles traveling in and out of Shenzhen remain in force, which could slow down the supply chain because cargo cannot be brought in from outside the restricted area.
In the recent past we have already had plenty of examples of the importance of maritime transport of goods, with situations such as, which made the logistics of eCommerce platforms difficult, in addition to the pandemic, of course. To this can also be added the crisis generated by lack of sea containers which has also represented a problem for logistics companies and global e-commerce.
Already last year, considered the third most important international port in terms of container traffic, it had closed operations due to the outbreak of the Delta variant of COVID-19, which caused the diversion of vessels with containers that their destination or departure was this port, towards others in the Asian country, or simply the indefinite docking of ships while waiting for the port to be reopened.
To get an idea, the port of Shenzhen is home to 40 major shipping companies that have launched around 130 international container routes. There are 560 guard ships operating monthly, as well as 21 access routes to other ports in the Pearl River Delta region. A potential stoppage of activities in this port would have a considerable negative impact on the logistics of many companies, since cargo delivery times would be extended and there would be more obstacles to completing deliveries.
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