The extended lockdown in Shanghai is expected to further disrupt supply chains as operations in the world's busiest air cargo hub and seaport continued to be impacted by the ongoing anti-pandemic measures in China.

Shanghai was earlier put on a two-phase lockdown from March 28 through April 5 as the city implemented mass testing to control a growing outbreak as part of the country's "zero-Covid" policy.

Restrictions were set to end last Tuesday but the local government extended the lockdown covering the whole city indefinitely as pressures from supply chain disruptions continue to mount.

Chinese state media said shipping operations remain "normal" in Shanghai. Meanwhile, reduced operations were noted at the Shanghai Pudong International Airport (PVG) since the lockdown began.

"The lifting of Covid restriction in parts of Shanghai which had been planned for today (Tuesday) is postponed indefinitely after more than 13,000 cases were found on Monday," said Lars Jensen, CEO of liner consultancy Vespucci Maritime.

"The fact the port remains open and operational is scant consolation when production and inland logistics are severely affected," Jensen added in his LinkedIn post, as he cited a study made by the American Chamber of Commerce on the impact on companies with business in Shanghai.

"Among manufacturers, 82% reported slowed or reduced production," the maritime analyst said. "Among manufacturers, 86% reported that their supply chains had been disrupted."

China tallied more than 16,400 new local Covid-19 cases in the country — the highest daily count in the mainland in more than two years — and more than 80% of the cases were in Shanghai, according to the National Health Commission.

Overland transport impacted

Dimerco noted in its air-ocean freight market forecast for April 4-17, that congestion is on the rise at PVG with a backlog on cargo, surging rates, and pressure on road transport.

"Due to Cocid-19 outbreak, Pudong/Puxi 2 stages lockdown from March 28 to April 5, the resources of road transportation are still critical in Shanghai as well as in Jiangsu Province. It causes a delay on pick up in some areas and the price is at the highest level," Dimerco said.

It said space was also tight across air hubs in Hong Kong, South China, Southeast China, and North China, while backlogs are seen in PVG, Korea, and Singapore.

"The cross-border truck capacity will be limited which reduces the cargo tonnage via HKG gateway due to COVID-19," Dimerco said. "Continuous increase of fuel pushes shipping costs up to 25%. PVG destination congested due to CN lockdown," it added.

Meanwhile, Dimerco noted that rates between Asia-US and Asia-Europe are also on the rise.

In a separate release, Maersk also warned of the continuing Covid-19 flareups in China and its impact on the shipping line's operations.

Maersk said air and vessel operations, yard handling, and gate-in-and-out are operating normally — with trucking the most impacted.

"Up to April 2, Maersk has not omitted any of its Shanghai calls or diverted calls to other ports due to Covid," the Danish shipping company said on April 6. "On the other hand, the warehouse in the lockdown area is seriously impacted."

"It is foreseeable that the efficiency of Maersk trucking services from/to Shanghai will be further impacted due to the lockdown and we are providing multi-modal services via barge and rail as alternative solutions between Shanghai and nearby cities," Maersk added.

For airfreight, it said "gateway operations are normal in Shanghai," although it said that with "more airlines canceling flights for the coming days, more volumes will be shifted to other airports in China, including Zhengzhou and Beijing."

Challenge to supply chain recovery

"The situation in China will cast a challenge onto the global supply chain recovery. The pandemic has revealed how lean the supply chain has become and any small disruption in the country will likely lead to ripple effects across the world," Maersk said.

"Local lockdowns and other quarantine measures especially those surrounding Shanghai cause supply chain bottle necks primarily stemming from the trucking capacity shortage," it added.

Shanghai officials said on Wednesday that since infections remain at high levels, the city will be put under lockdown again, and residents in different districts will have to undergo nucleic acid testing or rapid antigen tests. 

The Chinese National Health Commission also said China will continue to adhere to its zero-COVID policy.