Shanghai lockdown to hit Kenya with goods drought


A locked-down residential area at night in Shanghai, a major logistics hub in the world. PHOTO | AFP

Consumers are staring at a shortage of goods from China in the next couple of weeks following the move by Chinese authorities to lock down the city of Shanghai, one of the world’s largest logistics hubs.

China has imposed a major lockdown on this port city on the back of growing numbers of Covid-19 infection cases as the Asian nation imposed its zero-tolerance policy to curb the spread of the virus.

The lockdown in Shanghai implies that goods from Yiwu, which is a hinterland that supplies a lot of goods such as kitchen wares, bedsheets, towels, toothpicks and some electronics, cannot reach the port for further shipping to Kenya.

“Yiwu supplies Kenya with 60 percent of goods that we get from China, however, the current restrictions on Shanghai imply that containers cannot get to the port for onward shipping to Kenya,” said James Kariuki, chairperson of the Kenyan-China Trade.

Shanghai is the world’s number one container port, playing a pivotal role in global trade with most countries in the world relying on China for the supply of key industrial materials and finished goods.

Shipping cycle

Mr Kariuki said the current standoff will impact negatively on supplies in the country as it takes at least 45 days to complete the whole shipping cycle and have the goods delivered to the local market.

The lockdown in China comes at a time when a lot of countries, including the major economies, have relaxed the Covid protocols to open up their nations for business.

Kenya is among the countries that have eased travel restrictions on arriving passengers after years of stringent rules to tame the spread of the virus.

Kenya announced last month that the arriving passengers will no longer be required to undertake mandatory PCR tests at the airport and abolished the need for quarantine.

The Ministry of Health is also allowing unvaccinated travellers into the country but must have a PCR negative certificate taken 72 hours before departure.

Locally, Kenyans have been allowed to reduce the use of face masks, except when they are in enclosed areas like public transport.

Trade bodies across the world have expressed concern over China’s approach to Covid-19, especially on the zero-tolerance policy.

The European Union Chamber of Commerce in China said that the strategy was causing growing difficulties transporting goods across provinces and through ports, harming factory output.

Stocking inflation

Chamber President Joerg Wuttke told a media roundtable that this would likely impact China's ability to export, which could eventually stoke inflation.

"In China, Covid is still associated as if it were the plague. I think there needs a bit more education from the Chinese authorities, to take the fear away in order to make people more comfortable to live with this kind of uncertainty," he told media agency Reuters.

China is a key source market for Kenyan imports, including electronic and electrical products, clothing and textiles and fish.

The global freight industry experienced a deep shortage of shipping containers since the onset of Covid-19 in late 2019, which hurt the demand for goods and disrupted port and factory operations.

The shortage of shipping containers in China was linked to the fact that while the Asian nation’s recovery from the pandemic was faster, Covid-19-related restrictions and staffing shortages in ports across the US and Europe delayed the return of containers to the east Asian ports.

The virus made it impossible for Chinese factories and ports to process containers at the normal rate because of the holdbacks in major countries across the globe.

Largest ports

China is home to several of the world’s largest container ports, including Shenzhen, Shanghai and Ningbo-Zhoushan whose operations now stand affected by the shortage of shipping containers.

And with the shipping container shortage in China, freighters have been hit with extra costs, which are passed on to consumers.

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