Maersk gets back to business in Shanghai

Danish shipping and logistics giant A.P. Moller-Maersk said demand for transport services will surge in China's Yangtze River Delta region in the coming weeks, as a growing number of manufacturers in Shanghai have relaunched operations, said a senior executive on Thursday.

With the number of new COVID infections showing a downward trend recently in Shanghai, Caroline Wu, managing director of Maersk China, said the company continues to see Shanghai ports remaining operational including vessel operations, yard handling, gate in and gate out.

For instance, both export empty pickups and laden gate-in figures recovered to above 65 percent of normal weekly volumes, and import laden pickups improved to between 80 percent and 90 percent last week.

"At present, the group has 44 weekly port calls in Shanghai. Even though we have some effective adjustments for schedule recovery to counter the impact of congestion in ports in Europe and the United States as well as delays and supply chain bottlenecks, Maersk hasn't had large-scale cancellation of sailings. We have deployed enough capacity in Shanghai during the past months," Wu said.

Ocean East Logistics Co, one of Maersk's wholly owned subsidiaries in Shanghai, has maintained closed-loop operations since mid-April, helping customers with warehousing, consolidation and distribution services.

"For landside transportation, we have seen the capacity of Maersk trucking services to and from Shanghai gradually improve to 70 percent," she said, adding that the company will work closely with its customers and partners, seeking alternative solutions including multimodal services between Shanghai and nearby cities.

During the past few months, Maersk has strengthened barge services by offering more than 20 corridors to create several "land to water" alternative transport solutions, covering the hinterland of East China to ensure the stability of supply chains.

For example, one of its chain store retail customers has sizable shipments from Anji, Zhejiang province, to Shanghai on a regular basis and Maersk is its logistics service provider for pre-carriage services.

However, with constraints on trucking services in April, it was difficult for the customer to get cargoes to port, and this put pressure on stock levels for destination retailers.

Given such a scenario, Maersk responded by providing an Anji barge alternative to Shanghai with weekly sailings and helped the customer offload 50 forty-foot equivalent units as of the end of April.

Wu said that Maersk has also enhanced rail service, covering almost the entire hinterland of East China with more than 10 corridors and making transportation capacity of enterprises more reliable and supply chains more flexible. It provides cost-saving, stable, time-saving, environmentally friendly and energy-saving services as alternative options.

As Shanghai's epidemic control has achieved encouraging results, its foreign trade and manufacturing activities are expected to be fully restored next month. The city's exports and imports are likely to see fast growth in the third quarter, said Zhou Zhicheng, a researcher at the Beijing-based China Federation of Logistics and Purchasing.

For airfreight service, Maersk has maintained gateway operations in Shanghai and will see more airlines resume flights. The company expects volumes will gradually increase with more enterprises resuming operations.

Customs authorities in the five major cities in the Yangtze River Delta region, namely Shanghai, Nanjing, Hangzhou, Ningbo and Hefei, have adopted mutual recognition of each other's clearance processes for cargoes related to companies on Shanghai's white list of businesses that can resume operations, according to information released by the General Administration of Customs.

The new measures are aimed at reducing Customs clearance times, strengthening regional supply chain security and facilitating the movement of goods, hence aiding the city's goal of resuming business and production as the COVID-19 outbreak in Shanghai comes under better control.