Shipping stocks have outperformed the wider market by huge margins so far this year, and this is only the beginning, analysts say. Clarksons Platou Securities said crude tanker and bulker equities have led the way in 2022, putting on 41% each. Analysts Frode Morkedal and Even Kolsgaard called shipping the “belle of the ball” this year. In the short Easter trading week, shipping shares posted more gains of between 2% to 3%.

Overall, stocks have risen 26% in 2022, significantly better than the broader market. The S&P 500 index is down 8% in the same period. Product tanker and chemical tanker companies have added 35% and 29% in value, respectively. The one lagging sector is container shipping, which has only risen 7%. These companies have been pressured by softer freight rates recently, Clarksons Platou said.

But rising commodity prices, although potentially negative for the overall world economy, imply more room for freight to thrive, the analysts added. “Indeed, we have seen wider price spreads between geographical regions, spurring ships to travel over longer distances. Usually, a global recession is the main risk for shipping, but for once, the supply side of shipping is arguably the best we have seen for decades,” they said. Morkedal and Kolsgaard believe the low orderbook for newbuildings means net fleet growth is very muted overall. And the current lockdowns in China mean shipyards in the country are experiencing delays with deliveries, they explained. “Combined with strained supply chains, and continued port congestions around the world, we believe the very favorable supply side means that shipping is just in the early innings of a multi-year recovery cycle,” the analysts said.

Clarksons Platou argues that equity valuations are still modest compared with net asset values, with tanker values likely to appreciate in line with the recovery of the freight market. If VLCC rates return to 20-year historical averages of $42,900 per day, ship values could jump 45%, the investment bank calculates. With the average loan-to-value at 43% in the crude tanker sector, this means that the average equity value could increase more than 2.3 times the increase in vessel prices. This implies a potential 100% upside to the average crude tanker share.

UK stockbroker Hargreaves Lansdown said wider markets remained subdued as Ukraine-Russia tensions escalate, and global growth forecasts are trimmed. The World Bank estimate for global growth in 2022 has been cut to 3.2%, compared to a January prediction of 4.1%. Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “There is a cocktail of headwinds facing markets this week. Mounting tensions have resulted in crude oil prices remaining elevated … with prices topping $107, up substantially from just a week ago. While continued volatility in the oil price is to be expected for some time, the speed of recent increases has been surprising.”

The World Steel Association has forecast a slowdown in global steel demand growth mainly owing to the impact of the Russia-Ukraine situation and China’s softening economy. The demand is estimated to increase by only 0.4% to 1.84 TMT in 2022, and a further 2.2% to 1.88 TMT in 2023, according to its latest report. Further downside risks might arise from the continued rise in positive test cases in some parts of the world, especially China, and rising interest rates. The expected tightening of US monetary policy will hurt financially vulnerable emerging economies, the WSA stated. Recovery from the coronavirus backdrop turned out to be stronger than expected in many regions in the past year. However, a sharper than anticipated deceleration in China led to lower global steel demand growth in 2021. For 2022 and 2023, the outlook is highly uncertain as the expectation of a continued and stable recovery from the pandemic has been shaken by the war in Ukraine and rising inflation. Chinese steel demand slowed significantly in 2021 after the government stepped up efforts in deleveraging domestic property developers. The demand in 2022 will remain flat despite remedy policies to boost infrastructure investment and stabilize the real estate market, the association said, adding stimulus policies being introduced this year are likely to support mild growth in steel consumption in 2023.

Atilla Widnell, managing director at mining and metal data analytics firm Navigate Commodities, however, expected global steel demand to contract 2-3% this year. He said construction steel trading volumes across China were already down 35% compared to last year’s highs between late February and early March. The transactions were decimated by Beijing’s property market crackdown, which includes the so-called Three Red Lines policy, a debt metric used by the government to set limits for developers seeking to borrow more. “Once you throw in battered consumer sentiment and logistical snarls caused by Covid-induced inter-city traffic restrictions and a lack of truck drivers, this has and will continue to encumber domestic steel distribution and consumption over the next few months,” said Mr Widnell. China managed to escape quite well from Covid in 2020 and 2021, during which its factories remained open while much of Europe and the US were in lockdown, resulting in strong export activity and resilient economic growth. “However, things are starting to look shaky in China now,” said Ralph Leszczynski, head of research at Banchero Costa. Steel output in China in the first two months of 2022 stood at 158 MMT, down 9.7% from the same period of 2021, and back to almost the levels of 2020, he noted. Iron ore imports into China so far this year have also been disappointing. The volume between January and March were down 8.5% year on year to 252.7 MMT, the lowest level since 2017. Apart from financial troubles of leading domestic developers, most notably Evergrande, China is also increasingly struggling to maintain its draconian “zero Covid policy” when tackling the more transmissible Omicron variant, and when most parts of the world are deciding to live with the virus, Mr Leszczynski said.

Over the past few months, the country has seen strict lockdown measures implemented in multiple cities, including Shanghai, Shenzhen, Qingdao, Xian, Changchun, Tianjin and even in Tangshan, a major center of steel production in the north. The critical downside risk for Asian steel demand is the frequency of fresh Covid outbreaks in China, which will continue to have a “stop-start” effect on the economy and steel consumption, Mr Widnell said. Other less prominent risks include excessively high steel prices in an environment with deteriorating demand and margin that might lead to stagflation, he said. Prospects about dry bulk shipping, however, is rather mixed. The impact of lower iron ore and coal trade volumes this year will be offset by longer tonne-mile demand as Europe will try to get more coal from far-away sources such as Colombia and Australia to replace Russian coal, Mr Leszczynski said. Russian coal meanwhile could find its way to destinations such as India and China. Freight rates can also be supported by increased port congestion in China if the lockdown situation continues, he added.

In its report, WSA noted that the Russia-Ukraine conflicts will cause higher energy and commodity prices, especially raw materials for steel production, and continued supply chain disruptions, which were troubling the global steel industry even before the war. Furthermore, financial market volatility and heightened uncertainty will undermine investment, it said. While the confrontation in Ukraine could come to an end in the course of 2022, sanctions on Russia are expected to largely remain in place. The geopolitical situation surrounding Ukraine will have significant long-term implications for the global steel industry, said the WSA. Among them are a possible readjustment in global trade flows, a shift in energy trade and its impact on energy transitions, and continued reconfiguration of global supply chains. Steel demand recovered strongly in the EU and the US last year, according to the association. However, the outlook for 2022 has weakened due to inflationary pressure, which is further reinforced by the events surrounding Ukraine, said WSA. The impact of the war will be particularly pronounced in the EU due to its high dependence on Russian energy and refugee inflows. Steel demand in the developed world is forecast to increase by 1.1% and 2.4% in 2022 and 2023, respectively, after recovering by 16.5% in 2021. Global construction activity continued to recover from lockdowns to record growth of 3.4%, despite a contraction in China in 2021. The recovery of the global auto industry in 2021 was disappointing as the supply chain bottlenecks arrested the momentum in the second half of the year, according to the WSA. The war in Ukraine is likely to prolong the issues, especially in Europe, it said.

Commerce and industry minister Piyush Goyal on Friday said that India may export 10-15 MMT of wheat this year as against 7-7.3 MMT in the just ended fiscal year. India’s overall wheat exports were 2 MMT till two years ago.

His statement comes after Egypt agreed to import wheat from India and approved it as a wheat supplier. “They (Egyptian authorities) visited our farms after end of March…The issue was stuck for 10 years. Now India will export wheat to Egypt,” Goyal told reporters.

ET had last month reported that the commerce and industry ministry is exploring new potential markets for Indian wheat in Egypt, Turkey and Italy as the Russia-Ukraine conflict has impacted its shipments globally. India has been exporting to key wheat importers such as Bangladesh, Indonesia, Philippines, Nigeria, and Japan. Egypt, Turkey, China, Italy, Algeria, Morocco, Brazil, South Korea, the Netherlands, and Spain are the other major wheat importers.

“The approval has come today only. Now we will send our delegation there. They’ve indicated that they’ll start with a few of their large importers. We will send good quality wheat to become a permanent supplier,” Goyal said.

On the overall export target for FY23 (April ‘22 to March ’23), the minister said: “It is a challenging time. Covid has not ended. The conflict is causing so much disruption in the world both in terms of currency transaction and in terms of supply chains, also in terms of shipping and container availability. Shipping routes are also significantly impacted. The world is facing turbulent times.”

India’s merchandise exports rose to a record $418 billion in FY22. Goyal said that exports in April first week are $9 billion despite April normally being a slow month.

On Indonesia granting a blanket license to most Indian food testing labs for three years, a year after barring the approval given to certification agencies based in India, Goyal said that Jakarta has conveyed about more opportunities where they want New Delhi to export more agricultural commodities. “Indonesia has accepted all our shipments. The problem is solved,” he said.

Shipbuilders in Jiangsu and Zhejiang provinces have followed Shanghai-based shipyards in declaring force majeure on deliveries of newbuildings. A Jiangsu shipyard official confirmed to TradeWinds that his company has warned shipowners that there may be a delay in the delivery of newbuildings due to a shortage of shipbuilding materials, lube oil and ship equipment. The delays appear to be caused by the knock-on effect of a strict lockdown in Shanghai, which has created logistics havoc and disrupted supply chains to shipyards. TradeWinds earlier reported how Shanghai shipyards were forced into lockdown.

“Unlike shipyards in Shanghai that are in lockdown, shipyards in Jiangsu and Zhejiang are still in operation but their production is affected by material shortages,” said a local shipbuilding source. TradeWinds is told that problems in securing supplies of marine paint is posing a major challenge to shipyards as it is critical to the newbuilding process. “Yards are urgently in need of marine paint, but paint suppliers are facing a logistical nightmare,” said the source. China’s lockdown has restricted travel and trucking services leaving logistic companies unable to deliver the cargoes. Sources said several of the marine paint companies have plants in Kunshan city — a manufacturing hub located near Shanghai, which is also under lockdown. TradeWinds is told paint manufacturers in north China such as in Qingdao are also impacted by the lockdown in Shanghai as they cannot secure production materials. “The raw materials are imported into Shanghai and the warehouses are located there or in Nantong. But the restricted travel means the materials remain in the warehouse,” said a Chinese marine paint specialist.

Shipbuilding sources said ship repair yards are also greatly affected by the short supply of marine paint and shipowners are in contact with the yards on the issue. They added that some shipping companies are redirecting their vessels to shipyards in other countries for repairs and drydocking.

The shortage of marine paint has caused some newbuilding projects that are due to start to be delayed. Shipyards in Shanghai such as Hudong-Zhonghua Shipbuilding, Jiangnan Shipyard and Shanghai Waigaoqiao Shipbuilding that are located on Changxing Island were told to halt operations by Chinese authorities in mid-March after an outbreak. Shipbuilding sources said a few thousand-yard workers have been locked down in the shipyards.

Next year is likely to see a near doubling of ship demolition volumes as skyrocketing fuel prices, decarbonization regulation and an ageing fleet push an increasing number of ships into retirement. Demolition volumes of more than 40m dwt are being forecast by UK broker Clarksons for 2023, the highest level since 2018 after struggling to get over 25m dwt last year with a similar figure expected for this year.

Increased scrapping volumes will be a positive development for shipping’s efforts to decarbonize. The replacement of a generation of notorious gas guzzlers, built around the 2008 newbuilding boom, will play a critical role in reducing the industry’s carbon footprint. Many of these ships will struggle to meet next year’s incoming regulations, such as the Energy Efficiency Existing Ship Index, without making some major adjustments, and will likely become economically unviable. Around 80% of this generation of ships are expected to fall short of the required standards of the Carbon Intensity Indicator, a factor that will severely limit their ability to trade. These are the ships that are generating the most greenhouse gas emissions and are most urgently in need of being replaced by alternative low-carbon fuel or super-efficient ships that run on fossil fuel.

One factor that will help this transition is if international ship-recycling regulations make it easy for shipowners to send their ageing inefficient ships to an early grave, knowing that they will be recycled in a safe and environmentally sound way. But the very opposite seems to be happening. If international hazardous waste regulation under the Basel Convention or the European Union’s Ship Recycling Regulation (SRR) apply to a demolition sale, it leaves many owners with few options over where they can legitimately recycle. The safest route is to recycle at yards approved under the EU SRR, or in developed countries, where capacity is severely limited. The consequences of that have been clear over the past two years. A deluge of cruise ship demolition work at EU-approved Turkish yards in Aliaga has led to facilities being overstretched and led to several serious accidents, including fatalities. Demolition workers at Aliaga even went on strike earlier this year to protest working conditions and lack of safety provisions.

The key to overcoming these capacity problems would be for the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships to enter into force. This would help legally to recognize the leading yards in the Indian subcontinent, which dominate the ship-recycling business. In total, there are about 97 ship-recycling yards, most of which are Indian, which have a statement of compliance with the Hong Kong Convention. The convention is not far off its entry into force requirement, having been ratified by 17 International Maritime Organization member states so far. It will require the addition of two major ship-breaking countries, Bangladesh, and China, to get it over the line. Bangladesh has said it will ratify the convention in 2023. But there is only one local yard, PHP Ship Breaking & Recycling, with a statement of compliance with the Hong Kong Convention. While another 10 are applying, the leading ship-recycling country still looks a way off from attaining the required standards. China has said it will ratify the Hong Kong Convention but has shown an indifference to the recycling industry over recent years.

Asian countries such as Japan are trying to encourage these two countries to adopt the convention as soon as possible. Environmentalists and European shipping regulators strongly argue that the Hong Kong Convention standard is inadequate, and the statement of compliance has been awarded to many yards that fall short of the required standards. But the leading Indian yards have made a commitment to improvement that at least needs to be encouraged. At some point, a balance needs to be struck between making sure ships are recycled in an acceptable way and accelerating the modernization of the world fleet to decarbonize the shipping industry.

South African terminal operator Transnet is undertaking a clean-up operation following the devastating floods that damaged the port of Durban. Operations were gradually resuming, with risk assessments being undertaken to ensure the safety of employees and infrastructure, Minister of Public Enterprises Pravin Gordhan said in a statement. Priority was being given to repairing the main access road to the port’s container terminals.

“Cargo that will be prioritized for evacuation from the port today includes food, medical supplies and petroleum products,” Mr Gordhan said. “Shipping which was suspended as a result of extensive debris caused by the adverse weather is expected to resume once safety has been established for marine craft and vessel navigation.”

In a customer advisory, Maersk said waterside terminal operations had recommenced. There was no reported damage, and gantry and shoreside equipment remained fully functional. Labour availability was limited, however, due to access restrictions, and it expected lower productivity levels. “Currently, the biggest constraint is access to the terminal,” it said. “The damage to Bay Head Road is severe and this has effectively cut off all road access into and out of the terminals. No trucks can enter or exit. We do not yet have a confirmed date of when Bay Head will re-open.” Rail services into and out of the terminal also remain suspended.

“Given the access restrictions into the terminal at Durban we are reviewing possible feeder solutions and mainline deviations to land cargo and load exports,” said Maersk. “Given the already existing and longstanding delays at Cape Town, our solutions are centered on Port Elizabeth. This may involve both accepting Durban load cargo and discharging Durban port of discharge imports at Port Elizabeth as well as using feeders to link both ports.” It said several dry and reefer equipment units had been “compromised” because of flooding, reducing availability.

Hapag-Lloyd said its Durban operations had been affected by heavy rainfall leading to severe flooding and widespread damage. Waterside operations had resumed but were expected to progress slowly due to the landside disruptions, it said. Hapag-Lloyd said it would suspend detention and demurrage fees for the period between April 12-18 due to the difficulties in moving containers to and from the port.

Veteran Evercore ISI researcher Jonathan Chappell sounded at least partly enthusiastic in greeting news of a prospective Euronav-Frontline tanker mega-merger this week, saying the combination might “act as a precursor to more real consolidation of the smaller listed peers”. But then, with the world-weariness of an analyst who’s been around shipping for too long, he immediately added, “a guy can dream”. Chappell has been writing shipping notes since 2001, then with JP Morgan, and knows only too well that consolidation doesn’t come easily in a fragmented and management-ego driven industry.

With that perspective, he acutely cut to the heart of the potential upside of a combination that would yield a fleet of 69 VLCCs, 57 suezmaxes and 20 aframaxes/LR1s.

It’s not about cost synergies of the merger, and it’s not about market share or pricing control. “The biggest benefit from the potential merger would be the creation of an equity with a market value that renders the entity truly investible throughout cycles — something the broader shipping industry has lacked for its entire existence in the US public markets,” Chappel told clients. Indeed, the combined company would have a market capitalization approaching $4.8bn today, and this comes with the tanker market in a historic trough. Chappell dared to dream. Imagine what might happen if the tanker market turned lukewarm or even surged into bull territory? The newest incarnation of Frontline — the surviving company’s name — might even stray into what analysts call a “mid-cap” company. That might not sound overly impressive. But to be clear, to turn the analogy to English football/soccer, shipping is aspiring to get a team into the Championship or League One category, not the Premier League. In American baseball terms, it seeks a promotion to Class AAA or AA of the minor leagues, not Major League Baseball.

Market capitalization is not just a number. With it comes trading liquidity or turnover. And that allows even the largest investment funds to take a significant stake typical of their practices without the worry that they’ll become trapped in the bet. For Chappell, the line between small-cap and mid-cap stocks is somewhere between $7bn and $8bn, at least as related by the investors with whom he deals. That seems attainable for the new Frontline. Shipping is an industry that still has minnows with share value under $100m. Its inability to build scale was a factor in Chappell dropping an array of shipping names from his coverage in 2020 as he expanded research into railroads. Later he would add trucking and logistics to his remit. For a bit of perspective, the tanker names under his research currently have market caps ranging from $180m to $2.8bn. The railroads range from $67bn to $154bn. A sector known as “less-than-truckload” ranges from $5.4bn to $30bn. Logistics companies vary from $13bn to $17bn. Probably closest to shipping is a sector called “truckload” — “it’s super highly fragmented and cyclical, kind of like shipping,” said Chappell – is $2.4bn to $7.7bn.

So, it’s easy to see why even a jaded longtime shipping analyst can get excited about seeing a tanker name approach the scale seen in other industries. Shipping being shipping, of course, there are obstacles to the Euronav-Frontline tie-up, which as TradeWinds has reported is unusual in that it has been made public with only a term sheet in place, not a contract or “definitive documentation.” Not the least of these hurdles is opposition from Euronav’s largest shareholder, CMB of Belgium, which wants to transition the tanker owner into a green energy company. “Of course, nothing can be easy in this sector,” Chappell told clients. Still, the merger is favored to happen. And if one needs a reminder that shipping has made progress, look only to another research note penned by perhaps the only analyst who can match Chappell’s longevity in the sector: Magnus Fyhr of HC Wainwright. “Many institutional investors have long argued that it has been difficult to justify investing in public maritime equities due to the lack of market capitalization for most companies,” Fyhr wrote. “Twenty years ago, there were five publicly listed tanker companies in the US…with a combined market cap of $2bn. Twenty years later, there are 39 maritime companies listed in New York with a combined market cap of $40.8bn.”

Pacific Basin, a specialist of smaller-sized dry bulkers, is optimistic about the market despite the impact of China’s lockdown measures on cargo volume. The Hong Kong-based shipowner and operator expects demand for minor bulks, grains and coal this year will remain strong, and the freight markets will be further backed by higher tonne-mile demand amid shifting trade flows and global issues about food and energy security. “Changes in trade flows caused by conflict in Ukraine have positively impacted tonne-mile demand for some commodities,” it said in a trading update, adding it currently has no vessels operating out of Ukrainian and Russian ports.

The new wave of coronavirus outbreaks in China, a key buyer of dry bulk commodities, and the resulting disruption to logistics services and factory production have created pressure on the freight markets. Pacific Basin said the recent lockdown of major Chinese cities, including Shanghai, was likely to weigh on demand in the short term. “However, once restrictions are eased the resumption of normal economic activity and government-led efforts to meet national growth targets could provide the market with support later in 2022,” it said. “We expect Chinese demand to remain strong as policy support focuses on investment in infrastructure, manufacturing and green investment which all rely on minor bulk commodities.”

In the first quarter of 2022, its handysize and supramax fleet generated average daily time-charter equivalent earnings of $23,810 and $32,510, respectively, up 117% and 122%. Operating margins in the three months have declined from the previous quarters to $3,320 net per day over 5,160 operating days — but still at relatively high levels. Pacific Basin said it was focused on selling some smaller, older handysize vessels because second-hand prices were high in the short run, whereas its purchasing activity was slowing for the same reason. It currently runs a live fleet of 260 ships, of which 121 handysizes and supramaxes, are self-owned. “We remain committed to our long-term strategy to grow our owned fleet of supramax ships by acquiring high-quality, modern, secondhand vessels, and to sell our older and less-efficient handysize ships and replace them with younger and larger vessels,” it said.

Diana Shipping has fixed a newcastlemax bulker to commercial manager C Transport Maritime at a rate that beats the paper market for the next two years. The Semiramis Paliou-led owner of 35 bulkers has chartered the 206,040-dwt Philadelphia (built 2012) to the Monaco-based firm at $26,000 per day to at least 1 February 2024. CTM has options to extend the contract, which commenced on Tuesday, until as late as 15 April 2024.

New York-listed Diana expects to make about $16.9m for the minimum scheduled period of the fixture. The daily rate exceeds the Baltic Exchange’s forward curve for capesize freight rates. As the market closed on Tuesday, the forward curve showed rates of just over $25,000 per day for conventional capesizes during the third quarter of this year and $21,873 per day for the calendar year 2023. Forward freight agreements (FFAs) for 2024 closed at $19,486 per day on Tuesday. Newcastlemax bulkers earn a premium to conventional capesize bulk carriers, based on their larger tonnage. That said, it did not require this premium for the Philadelphia fixture to easily trump the physical market for capesizes. The capesize 5TC, the weighted average spot rates across five key routes, picked up $22 per day on Wednesday to reach $11,350 per day.

The Philadelphia was previously fixed to George Economou’s Classic Maritime at $28,500 per day between April 2021 to March 2022, according to its website. In early March, Diana fixed the 181,500-dwt capesize Florida (built 2022) for five years to trader Bunge at $25,900 per day. The fixture, which was signed for at least 58 months and may be extended to 62 months, is expected to make at least $45m in revenue for Diana.

Covid-19 cases continue to rise in Shanghai, while down south a giant convention centre has been converted to a quarantine hospital as Guangzhou follows a familiar Chinese path towards lockdown. Setting alarm bells ringing further for people working in global logistics, Covid-19 cases are being detected in greater numbers at Shanghai’s giant port neighbor, Ningbo.

Beijing has faced severe criticism for its zero-Covid policy, which has seen trucking capacity cut dramatically in and out of Shanghai during its 16-day lockdown, as well as warehouses and factories shuttering their doors. Authorities in China’s largest city have tried to ease the situation – bringing in a new three-tier lifting of lockdown over the weekend – yet fewer than 7m of Shanghai’s 26m citizens have been released from their home confinement thus far this week. Moreover, as cases continue to rise in the financial hub there is little chance of daily life returning to normal this month.

Commenting via LinkedIn on the latest Covid numbers coming out of Shanghai, Lars Jensen, CEO of liner consultancy Vespucci Maritime, stated: “Yet again record levels of Covid in Shanghai meaning no immediate end in sight to production and logistics disruptions. With the outbreak in Guangzhou also leading to shutdowns there, the impact on export volumes out of China will grow larger.” Jensen warned shippers ought to expect drops in export demand, port omissions and more blank sailings in the near-term future as well as Shanghai-bound cargo increasingly being discharged elsewhere.

Discussing China’s Covid situation on the GMS Podcast yesterday, Peter Sand, chief analyst at freight rate platform Xeneta, said: “Having a lockdown of Shanghai, which is the most connected port in the whole world, is terrible. It is so much more significant than the lockdown in Shenzhen.” Sand said that problems at the port are being exacerbated by Covid restrictions on truck drivers. “What we have seen is that exports have been performing fairly well, whereas imports have come to a complete stop because truck drivers simply can’t get into and out of the port,” Sand told the show hosted by GMS’s chief communication officer, Jon Chaplin.

In Guangzhou, meanwhile, familiar steps are being taken on China’s well-worn path to another municipal lockdown. From Monday, all residents in the export powerhouse of 18m people have been asked not to leave the city unless necessary. All kindergartens, primary and middle schools, colleges, and universities have suspended in-person classes while construction of a new makeshift hospital in the Pazhou International Convention and Exhibition Center is underway.

Covid cases are also on the rise in Ningbo, a port city where many cargoes have been diverted to during the 16-day ongoing lockdown in Shanghai. “While Shanghai is in complete lockdown, Ningbo is now on ‘yellow alert’ with some cases having been found. Warehouses in Beilun are full with the Shanghai lockdown causing congestion in Ningbo. Space is tight and there is lack of 40′ & 40HC equipment,” an update posted on Monday from UK logistics company Woodland Group stated, going on to discuss the severe trucking issues across much of the People’s Republic. “Across China, trucking services are still a key concern, with mandatory PCR tests, positive Covid cases and trucks unable to cross borders causing significantly reduced availability unable to meet the high demand, and rates subject to continued increases,” Woodland stated.

The Chinese government looks rattled from the enormous criticism it is getting for its ongoing zero-Covid policy, both at home and overseas. It appears there are signs of a shift in the strategy as evidenced by Shanghai’s three-tiered opening strategy as well as a new pilot project that is underway at eight cities including Shanghai, Guangzhou, and Ningbo to cut quarantine times for overseas travelers and those who’ve had close contact with infected individuals. The eight cities in the pilot project are reducing quarantine times from 14 to 10 days.