Shanghai have entered the second phase of their three stage plan, which will see work and production resume in China’s largest commercial and industrial city.

The second stage (an expansion on phase one), sees a continued resumption of work and production, in hope that stage three will be an acceleration/return to Shanghai being close to fully operational (in selective industries) by June 1st.

A ‘white list’ of 704 key foreign trade enterprises has been released to importantly include the trading of goods and port services.

Although an extremely positive step for the supply chain and logistics industry, the following information should be noted:

Factories

Where most factories were closed and production was stopped, there are still blocks in the supply chain, resulting in transportation capacity far exceeding production.

The cost of logistics has almost trebled since the epidemic.

Convenient customs clearance systems have been introduced, greatly improving efficiency, but the delivery process is slow, largely down to shipping companies not accepting the new electronic Bills of Lading and ports being overstocked with materials.

‘Upstream’ and ‘Downstream’ enterprises need to resume work as soon as possible and simultaneously, as a considerable number of suppliers are still closed, leaving a batch of urgently required products failing to be produced.

In the first half of May, the monitored import and export value of Shanghai port was 188.6 billion yuan, an increase of 17% month on month.

Recently, the daily container rate through Shanghai port has reached 119,000 TEUs, returning to 90% of the normal turnover.

The daily cargo through Pudong Airport exceeded 7,000 tons, returning to 70% of previous levels.

The number of freight vehicles entering and leaving Shanghai through the provincial boundary crossing of the express way has reached 78,000 in a single day, returning to two-thirds of the normal traffic.

Public Transport

Some public transport lines connecting to airports and stations have been reopened, in order to meet the needs of visitors who are required to leave Shanghai and return home.

Traffic in other cities still remain closed, in the stage of closed-loop management.

Among the 273 priority lines to be restored in Shanghai since May 22, Jiushi bus has resumed the operation of 111 cross regional bus lines, focusing on connecting some airports, railway stations, rail transit subways and class III hospitals in the central urban area. Among them, there are 13 departure lines connecting airports and railway stations, the frequency interval of Hongqiao pivot new line is no more than 90 minutes, and the frequency interval of other lines is no more than 60 minutes.

There are 14 supporting lines with rail transit, with a shift interval of no more than 30 minutes, and the last train is 15 minutes later than the connecting station.

There are 84 lines passing through the hospital, with a shift interval of no more than 40 minutes.

Port & Customs

Since May, with the improvement of the epidemic situation in Shanghai, the resumption of work and production of enterprises has been gradually and orderly promoted.

In the first half of May, the seaborne cargo out of Waigaoqiao port exceeded 460000 TEUs, and the recovery momentum is obvious.

In order to support enterprises resuming work and production, Shanghai Customs recently launched a new round of ‘chain protection’ and ‘chain stabilisation’ measures, to include opening a ‘green channel’ for the whole industrial chain, such as integrated circuit, biomedicine and automobile manufacturing.

The key to the opening of ‘green channel’ is to dredge the blocking points of industrial and supply chain, ensuring a smooth customs clearance of high-tech goods.

Overseas customs have also established a one-to-one contact mechanism with Huahong, Huali and other Shanghai ‘white list’ enterprises to help release goods urgently needed in the industry chain.

To make it easier for enterprises to declare and inspect, Shanghai Customs have also launched measures to include multi-platform online declaration and appointment forms for unaccompanied inspections.

Enterprises can declare their goods online through the ‘single window’ of international trade at Shanghai port and the ‘Internet & customs’ platform.

They can upload materials, make an appointment for an unaccompanied inspection, and make an ‘active disclosure’ by using the Shanghai Customs District Characteristic government service platform.

To summarise, although Shanghai has not fully recovered from its epidemic struggle, the ‘white list’ will see enterprises gradually returning to work, albeit, whilst facing numerous logistical challenges.  Challenges such as restrictions on the road and with transportation, limited production at some facilities, double the cost for raw materials, all sadly contributing to the stagnation of productivity and orders being in a state of low demand.

For more information we encourage you to contact your Customer Development Manager on 01375 856060 or email crmteam@ugroup.co.uk to discuss.