The full lockdown on Shanghai in a scramble to contain surging Covid-19 cases in China's financial hub is expected to add another pressure on cargo flows with carriers and shipping lines already announcing disruptions to operations out of the major air cargo and shipping hub.

In an advisory, Dimerco noted the impact on its air freight, ocean freight, warehouse services, and road logistics.

The global 3PL firm said import and export operations through the air will be impacted as trucking operations are disrupted. It said that some airlines such as Cargolux have also started canceling flights into the PVG airport due to the lockdown.

"Carriers' schedules are normal today, but may start to change tomorrow," Dimerco said in its March 28 statement.

In terms of shipping, Dimerco said that the impact so far is "mild" but as Shanghai puts its people on lockdown, trucking services could mean delays.

"The impact on the port is mild," it said. "Operations are normal, however, terminal workers are facing lockdown at home, leading to potential delays."

It said that pick-up of cargo will depend on the road and trucking situation. Meanwhile, most LCL warehouses are suspended.

"The sailing schedule stays the same. More space may be available next week as cargo cannot enter the port," Dimerco further said, adding that the operations in Waigaoqiao Free Trade Zone and Bonded Logistics park are suspended.

Two-phase lockdown from March 28

China began its most extensive coronavirus lockdown on March 28 expected through April 1 as Shanghai conduct mass testing to control a growing outbreak as part of the country's "zero-Covid" policy — locking down the city's 26 million residents and putting a stop on transportation.

This comes as Shanghai recorded 3,450 asymptomatic Covid-19 cases and 50 symptomatic cases on Sunday.

The two-phase, five-day lockdown will begin with testing in Shanghai's Pudong financial district and nearby areas until Friday, while the second phase of the lockdown will include tests on the other districts west of the Huangpu River from April 1 to April 5.

Offices and all businesses that are not considered essential will be closed and public transport suspended.

In a separate advisory, Maersk told its customers that some depots in Shanghai remain closed from March 28 until further notice — but not all.

All the warehouses in Shanghai will also remain closed from March 28 to April 1.

Maersk said the most impact will be on trucking service in and out of Shanghai.

"Trucking service in/out Shanghai will be severely impacted by 30% due to a full lockdown on Shanghai's Pudong and Puxi areas in turn until 5th April," the shipping line said.

Maersk added that the overall landside transportation situation is dynamic subject to change.

Trucking services to take a hit

"Trucking service, for now, is still available in China main ports and nearby cities providing the drivers hold negative Nucleic Acid Test (NAT) report requested by local governments. Specifically, we foresee trucking service between Shenzhen and nearby cities has gradually recovered while trucking service in/out of Shanghai will be severely impacted ...  Consequently, there will be longer delivery time and a possible rise in transport costs such as detour fees and highway fee," it added.

Lars Jensen, CEO of liner consultancy Vespucci Maritime warned that the newest lockdown could put further pressure on cargo flows after China already earlier put Shenzhen — a major port city — in a week-long lockdown to halt a growing Covid-19 outbreak.

"If this is widespread it will mean demand slow-down in the short term and downwards spot rate pressure, followed by a surge and upwards pressure," Jensen said in a Linkedin commentary.  "And the disruption is on top of the Shenzhen fall-out from the last few weeks."

He added that so far, vessel calls and departures stay normal.

"But as I see it, the landside impact could result in changes if it persists over some time," the maritime analyst added.

"Shanghai air freight will be indirectly impacted for new cargo acceptance. Cargolux has canceled its schedule for the rest of this week and Maersk foresees many airlines will be evaluating the plan for flight cancellation," Jensen added.