A COVID-19 emergency is happening in China’s largest cities, with millions of people locked down, prevented by government orders from going shopping. Yet while citizens are confined to their homes, express delivery drivers as well as ecommerce companies and the logistics systems they depend on are right on the front line of the pandemic. With Beijing’s zero tolerance, it is up to the government to ensure that citizens are fed and supplied, but with reports of online delivery systems failing and Shanghai running out of food, there is a whiff of crisis in the air. 

“Signs are emerging that China’s supply chain is running into somewhat of a snare,” tweeted one Xinhua journalist.

COVID lockdowns are exacerbating problems in the logistics industry. While the domestic freight business has maintained steady growth for years, it is now facing severe difficulties brought on by rising oil prices, instability in international supply chains, bottlenecks in the supply of bulk commodities, and recently, the closure or inaccessibility of some logistics facilities. 

Ecommerce traders in Yiwu 义乌, Zhejiang Province, home to China’s largest wholesale markets, are very sensitive to changes in express delivery prices. This year’s prices, they say, are much higher than in previous years, and they are expecting things to get worse. 

But the government is taking action to ensure supplies of food and other necessities:

  • Over the weekend, several ministries and local governments held meetings to discuss urgent measures to maintain the flow of logistics and supplies.
  • The State Council yesterday issued a notice on unblocking transportation and logistics channels, including detailed instructions for truck drivers on moving their goods, and a warning that local authorities will be investigated if they fail to ensure the smooth flow of goods.
  • After conducting a study on financial support for the logistics industry, the China Banking and Insurance Regulatory Commission yesterday called on banks and insurance companies to provide greater assistance to freight and logistics companies.
  • Ecommerce giant JD.com 京东 announced this week that it had hired 2,000 delivery personnel for Shanghai, and had recently delivered to the city emergency supplies of 80,000 items of maternal and infant products, more than 100,000 medicines, and 10 tons of mutton from Xinjiang.   

However, this is still turning into a “cold spring” for China’s express delivery and transport companies:

  • There are dozens of locked-down areas.
  • Trucks have been blocked on the road and their drivers confined to their vehicles for days.
  • Complex epidemic prevention measures are subject to frequent changes.
  • Goods cannot be delivered or are stuck in Shanghai’s warehouses, and companies are unable to transfer products to other areas. 
  • While online shoppers complain about long delivery times or non-delivery, ecommerce companies are dealing with shortages, and warehousing and stockpiling issues. 

The takeaway: With the threat of hunger hanging over Shanghai, the difference between a few grumbles and a full-blown crisis might just be the line of trucks and delivery drivers on the streets of deserted cities, and the roads and systems they depend on to do their work. 

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