Lockdowns in China Block Truck Shipments and Close Factories – The New York Times

April 8, 2022 by No Comments

BEIJING — China’s mounting Covid-19 restrictions are creating further disruptions to global supply chains for consumer electronics, car parts and other goods.

A growing number of Chinese cities are requiring truck drivers to take daily Covid P.C.R. tests before allowing them to cross municipal borders or are quarantining drivers deemed to be at risk of infection. The measures have limited how quickly drivers can move components among factories and goods from plants to ports.

Shanghai and other major Chinese cities have imposed lengthy, stringent lockdowns to try to control Covid outbreaks. Previous interruptions in the supply of goods from Chinese factories to buyers around the world mainly involved the temporary closure of shipping ports, including in Shenzhen in southeastern China in May and June last year and then near Shanghai last summer.

“The problem is not ships, it’s that there’s no cargo coming because there are no trucks,” said Jarrod Ward, the chief East Asia business development officer in the Shanghai office of Yusen Logistics, a large Japanese supply chain management company.

The testing of truck drivers has been held up because some cities are doing mass testing of residents. Shanghai tested essentially all 25 million people within its borders in a single day on Monday and detected another 21,000 cases on Thursday.

Now, there is an acute shortage of truck drivers in Shanghai and in nearby cities like Kunshan, a center of electronics production. Many electronics components manufacturers are shutting down in Kunshan.

“The key electronics suppliers to Apple, to Tesla, they’re all based there,” said Julie Gerdeman, the chief executive of Everstream, a supply chain risk management affiliate of DHL that is based in San Marcos, Calif.

Apple declined to comment, and Tesla had no immediate reply to questions.

Many factories have tried to stay open by having workers stay on site instead of going home. Employees have been sleeping on mats on the floor for as long as four weeks in some cities in northeastern China. Companies have been storing goods in nearby warehouses while waiting for normal truck traffic to resume.

But as lockdowns stretch on in cities like Shanghai, Changchun and Shenyang, factories are starting to run out of materials to assemble. Some are sending their workers home until further notice.

Making car seats, for example, requires different springs, bolts and other materials. Mr. Ward said car seat producers have run out of components. Volkswagen said the company closed a factory outside of Shanghai.

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