China: Golden Week worsens supply problems

Loading/unloading situation remains tense at least until Chinese New Year in February 2022.

Prior to the Chinese National Day Golden Week from October 1 to 7, 2021, the delivery problems are becoming more acute. "The loading situation ex China continues to be a major challenge, with new bad news almost daily," says Jan Buelck, Managing Director at a. hartrodt in Hong Kong. Covid-related, the country's second largest airfreight hub at Shanghai Pudong International Airport is overloaded, and there are enormous backlogs at China's second largest port, Ningbo-Zhoushan. "We always find a solution," Buelck assures. In the exceptional situation, however, customers need patience.

Blank Sailings would complicate the situation

Before Covid, the flow of goods increased seasonally in the third/fourth quarter. Since the pandemic, bottlenecks regarding container equipment and shipping capacity have become permanent. At the same time, Buelck states that "since October 2020, there has been a peak season". The more carriers cancel vessel departures during the Golden Week (blank sailings), the more difficult it becomes. "The loading situation is very tense and will remain so at least until Chinese New Year at the beginning of February 2022," Buelck estimates. All trade lanes are affected.

Larger inventory can be useful

"Transport logistics is only part of the problem," emphasizes Peter Zink, Business Development Manager Middle East and Greater China at a. hartrodt in Frankfurt. In the age of globalization, just-in-time procurement has become the norm, and warehousing capacities have been reduced. However, global supply chains are subject to economic policy, climate change and cyber risks. Zink recommends that customers run analyses and decide "whether a larger inventory makes sense." For this purpose, a. hartrodt has expanded its own warehouse logistics. Bringing back production processes (reshoring/nearshoring) does not make sense, according to the ifo Institute for Economic Research in Munich.

The 258 employees of a. hartrodt in China have returned to their 18 offices at 15 locations. "Everything is running stably," Buelck clarifies. "With us as a reliable partner, the customer stays on the safe side in uncertain times," underlines Zink.

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