China’s lockdowns drive up freight costs as zero-Covid rules bite trucking operations
- Long-distance truck drivers are being forced to undergo arduous coronavirus testing and quarantine requirements to make deliveries
- Freight costs are rising due to inefficiencies, while customers are waiting longer for deliveries and producers are struggling to ship cargo
For farmers and traders in Donggang, a county in northeast China known for its high-quality strawberries, getting ripe fruit out of town has become increasingly difficult in recent weeks.
Truckers require a negative nucleic acid test within 24 hours to get off the highway at a designated exit for Donggang. Then, instead of driving directly to strawberry greenhouses like usual, they are led to an appointed area where they are sealed in their cab with tape by local officials.
As a result, local traders like Luan Jun have been forced to hire trucks to transport their produce from greenhouses to highway checkpoints.
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“The costs are much higher now, and the efficiency is lower,” Luan said.
To make matters worse, many cities in the northeast have locked down due to local outbreaks, forcing fruit stands to shut their businesses.
“Previously I could send out 5,000kg of strawberries per day, but now I can only send out half of the amount,” Luan said.
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The hardline policy is weighing on road freight, which accounted for 73.8 per cent of China’s overall freight volume in 2020, according to statistics from the Ministry of Transport.
Costs are rising due to inefficiencies, while customers are waiting longer for deliveries and producers are struggling to ship cargo.
“Now [all the places] are either under lockdown or strict control,” said Feng Yilin, who works for a logistics company based in central Hubei province.
Most cities and counties across the country require drivers to show a negative Covid-19 test within 48 hours to enter their jurisdiction and some require one within 24 hours, Feng said.
“And when drivers get off from a highway to enter any city, they have an additional nucleic acid test at the highway exit,” he said, adding the hurdles have resulted in long queues at checkpoints.
The impact is already being reflected in traffic flows across the country. The road vehicle freight flow index, which gauges the number of trucks running in a specific region, was 92.49 for all of China on Friday, dropping by 22.4 per cent compared to the same time last year, according to Wind data.
In Shanghai and Jilin, the index recorded 37.33 and 16.12 on Friday, dropping by 69.7 per cent and 86.7 per cent year on year, respectively.
In the last week of March, the cargo throughput volume at major public logistics zones in China declined by 23.4 per cent compared with the same week in 2021, Wind data showed.
“If the ‘dynamic-zero Covid’ policy remains, the costs of normalised pandemic containment measures will inevitably push up the operating costs of logistics companies,” said a report from Western Securities last month.
The operation costs of major logistics companies in China increased by 33 per cent from January to November last year, according to data from the China Federation of Logistics and Purchasing.
