China’s Increasingly Strict Measures Snarl Global Supply Chains
China’s extreme Covid-19 zero policy could be a major obstacle to full recovery for the freight forwarding sector. In fact, it is also aggravating the crisis just before the holiday season, with emptied shelves across the globe.
In an attempt to keep the virus in check, the authorities have kept on prohibiting crew changes for non-Chinese nationals and recently introduced a 7-week quarantine for Chinese cargo ship crew. Commercial vessels that made crew changes at other ports of call should wait for 2 weeks before they are allowed to call at a Chinese port.
New Measures and Impact on Global Supply Chains
To comply with the new measures, carriers have been forced to delay crew changes and cargo shopping and to reroute vessels. According to ship owners and freight forwarders, China’s Covid-19 zero policy has an accumulative impact on cargo flows, causing global supply chain disruptions.
China is not only the world’s biggest exporter but also a major commercial and shipping hub. That is why, the newly imposed strict measures have had a profound impact on global cargo flows. To illustrate China’s extreme tactics, recently, the local authorities locked in as many as 34,000 Disneyland visitors in Shanghai for mandatory Covid-19 testing. Even people who tested negative have been asked to self-isolate and be retested in 14 days. What is more, China has now extended the definition of close contact to anyone who is one kilometer away from an infected person.
An added problem is the fact that policies change often in response to the local situation. Also, China recently announced that no easing of the rules is soon to be expected.
Not Letting Crew In
While China has been doing a good job at reducing the spread of Covid-19, this is done at the cost of not allowing maritime crew in. Even Chinese crew may not be allowed to enter China under certain circumstances. Non-Chinese crew with emergency medical needs are not allowed to leave the ship to get much needed care. One carrier reported an instance where a chief officer had a serious tooth abscess and wasn’t allow to leave the ship to get care.
International freight forwarders have also been forced to keep Chinese crew onboard past contract expiration. In line with official regulations, no more than 3 Chinese crew are allowed on a flight to the mainland. Some seafarers have been stranded onboard vessels for over 11 months, which is the maximum maritime crew is allowed by law.
Impact on Carriers
Major carriers say the increasingly radical policies have made it a challenge to operate in China. In some cases, delays are not an issue but in others, delays could go on for days on a row. Some carriers have already incurred late fees for having to reroute.
One of the biggest owners of oil supertankers recently reported to have spent millions in handling disruptions caused by increasing costs, quarantines, and rerouting.