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04/20/2022

Exclusive: Shanghai lockdowns to affect all U.S. ports

Marianne Wilson
Editor-in-Chief
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The Shanghai COVID-19 lockdowns are expected to have a major impact on U.S. ports.

The COVID-19-related lockdowns in Shanghai are beginning to ease, but their impact on U.S. ports is just beginning.

That’s according to Spencer Shute, senior consultant at Proxima, a global procurement and supply chain consultancy.  

 “The downstream effects of this lockdown are shaping up to have an even larger impact on U.S. ports than anything else experienced during the pandemic,” he said.

Here are insights from Shute on how the lockdowns will affect the supply chain.

• West Coast ports will be impacted most dramatically by the Shanghai lockdowns; however, all ports will be affected at some level. Some shippers will try to ship to the East Coast to avoid the bottlenecks in LA/Long Beach. With the limited air freight options in Shanghai throughout the lockdown, all air freight ports will expect to be inundated with increased volume in an attempt to fulfill backlogged demand

• Because of the volume shipped through Shanghai many sectors will be impacted from these shutdowns. This includes everything from manufactured goods in transit to final assembly, to fully finished goods ranging across all categories of electronics, automotive, furniture, pharmaceuticals, and textiles.

• Consumers have already been experiencing delays as a result of all other supply chain challenges over the last two years. However, as a direct result of these lockdowns, consumers will start to see significant delays and shortages early-summer through fall which is prime peak shipping season.

The later onset of delays is caused by reduced manufacturing/shipping capacities during the last month which has reduced product availability. Also, once the ports are up and running at full capacity it will create bottlenecks at U.S. ports. This would be similar to what we saw with the L..A./Long Beach ports last fall/winter.

• Another key issue coming up this summer are the labor union negotiations for the West Coast ports. Any shut down caused by failed negotiations could be a devastating blow to the supply chain —  further impacting delays, shortages and inflation.