After Shenzhen, China Now Locks Down Shanghai for Nine Days

Shanghai, the financial hub of China, has announced a two-phase planned lockdown starting Monday, Mar 28. This move comes after the city of 26 million residents saw a surge in Covid-19 cases — a record 3,450 symptomatic patients, which accounts for nearly 70% of the countrywide total. On Sunday, Mar 27, the city government announced that all firms and factories would have to either suspend manufacturing or have people work remotely during a two-phase lockdown that would last nine days.

The city’s Public Security Bureau (PSB) said it plans to divide the city into two areas along the Huangpu River to facilitate mass testing. It will be closing bridges and tunnels and restricting all highway traffic and tollbooths in the city’s eastern districts until Apr 1. The western districts will have similar restrictions starting on Apr 1 through Apr 5. The PSB will implement strict controls for traffic coming in and going out of the city, with everyone leaving Shanghai required to show proof of a negative result from a nucleic acid test taken within 48 hours.

Impact of the Lockdown

The earliest repercussion of the lockdown came from oil prices plunging nearly $4 on Monday as concerns over slower fuel demand in China started rising. Brent crude futures slid as low as $116.00 a barrel and traded down 3.2% at $116.77 at 0131 GMT. Shanghai’s Disneyland theme park is among the larger businesses closing early in the week. Even automaker Tesla is contemplating suspending production at the city’s plant. With the approval of local authorities, some large companies are reportedly continuing their operations by confining their employees to the factory premises and adhering to Covid safety and testing protocols. However, logistics and supply chain disruptions will still impact the overall production capacity to a certain extent.

China believes its persistent “zero-tolerance” approach is the most economical and effective prevention strategy against Covid-19. According to the city’s Covid-19 prevention and control office, the current lockdown was implemented to stop the virus from spreading, protect people’s lives and health, and achieve a zero-Covid goal as soon as feasible.

Impact on the Port of Shanghai

As of Mar 27, the number of vessels in the vicinity of the port of Shanghai appears to be declining. From an average of 31 berthed vessels in the month, the number dropped to 25 vessels a day before the lockdown. The number of ships waiting to berth stayed above average at 6 vessels.

Shanghai Congestion

At the same time, the import dwell time for containers at the port has been rising from an average of 3.4 days throughout the month to 4 days by Mar 27. The export dwell time stayed at the usual average of 2.7 days.

Shanghai Dwell

However, it is too early to see the real impact of the lockdown on the port.