How does the lockdown in Shanghai harm the Croatian economy?

After the closure of the world’s largest trading port in Shanghai the delivery of goods to Croatia is delayed by up to a month, say cargo-partner Hrvatska, a provider of info-logistics that offers a comprehensive portfolio of solutions for air, sea, land transport, and storage. 

The worsening epidemiological situation in China has led to a lockdown, which resulted in the closure of one of the world’s largest ports in Shanghai at the end of March, causing a new crisis in global supply chains. The situation is gradually calming down, but nearly a third of the goods that were supposed to leave the port have been held up due to the strict lockdown. However, will delivery delays lead to shortages and new price increases? How is the situation affecting Croatia and the region?

Strict lockdown until the end of the month

Currently, about 40 Chinese cities are in some phase of lockdown, including Shanghai, where limited mobility creates particularly significant problems in the supply chain. The main challenge for factories is sourcing raw materials and components necessary to maintain production, as well as the difficult arrival of workers to factories, which causes the inability to deliver goods from factories to terminals.

Shanghai, as the world’s largest trading port, has an impact on all parts of the world, including our region. A large number of ships are waiting in front of the port of Shanghai for their unloading, which certainly already affects finished products and subsequently the delivery of those products to various parts of the world.

Inevitable delays in ports also affect the Croatian economy

Port authorities have allowed the world’s largest trading port in Shanghai to operate, but operations on land, such as unloading containers and transporting goods have been postponed, and all international flights from that city have been redirected to other airports. Logistics companies are redirecting ships to the nearest ports of cities like Ningbo, where production and transport capacities have recently increased.

Almost 50 percent of goods from China arrive in Croatia via Chinese cities, Shanghai and Shenzhen, where port congestion and then rising transportation costs are causing delays in the delivery of goods for up to a month.

Alternative solutions are being offered

The company cargo-partner is closely monitoring recent developments in China, and as they point out, they are making every effort to ensure that all air or sea shipments are delivered. The closure of Shanghai is a major challenge, not only for logistics but for the entire industry.

– It is clear to us that there must still be a connection between the eastern and western worlds because without it, the entire global economy comes to a halt. Alternative solutions include redirecting shipments to nearby ports, shortening transit times by using Adriatic ports, and offering weekly charter flights to/from all destinations as an alternative for time-critical shipments – emphasizes the director of cargo-partner Hrvatska, Zoran Starčević.