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Hong Kong shipping and logistics
EconomyChina Economy

Shanghai lockdown forces Hong Kong manufacturers to cope with higher costs, delays and backlogs

  • Businesses are adjusting their short-term outlooks, but there is optimism that normal operations will resume in the coming weeks
  • ‘Transport isn’t stopping during the lockdown period, but it’s being delayed,’ says former member of Hong Kong Logistics Development Council

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A nearly month-long lockdown of Shanghai has delayed shipping operations at the world’s busiest container port. Photo: Reuters
Kandy Wong

Hong Kong manufacturers are expecting to endure short-term pains caused by Shanghai’s coronavirus lockdown, but some are hopeful that a mid-May resumption of all port activity could help mitigate the impact.

Some businesses have resumed production in Shanghai under a “closed-loop” system, where workers are required to live on-site and maintain zero contact with outsiders while the city recorded increased death tolls and symptomatic cases.
The citywide lockdown of 26 million residents has been in effect since April 1, and authorities have yet to give a clear time frame for lifting the stringent measures.

“We’ve already factored in less business in the short run,” said Eugene Chan, managing director at the Hong Kong-listed capacitor maker Man Yue Technology and vice-president of the Hong Kong Young Industrialists Council. “If operations can return to normal by the middle of May, we can play catch-up between June and December.”

The spillover effect from Shanghai has affected Chan’s factories in the cities of Nantong and Wuxi – both in Jiangsu province. He said companies have had to rejig their production timetable and decide which projects go first, because they may not be able to get certain parts on time.

He also said that manufacturers have absorbed the higher marine costs in the period of slow transport, with cost increases ranging from around 10 to 100 per cent.

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