The Port of Shanghai had already been suffering from major holdups since mid of March, and the extension may worsen congestion and increase transportation costs further, experts said. Ningbo, another primary port and sea freight hub is placed under lockdown. Shanghai and Ningbo are the world's busiest container ports, handling 90% of solar panel export volume. The number of ships waiting to load or discharge at these ports had skyrocketed to a nearly tenfold increase in the past two and half weeks. In addition, due to the lockdown of these two hub cities and others across China, in-land truck transportation is also restricted.
Maersk, one of the world's largest container shipping companies, said the Shanghai lockdown can cause massive transportation delays. Trucking service in and out of Shanghai will be severely impacted by 50% or more due to complete lockdown in Shanghai and Ningbo.
According to Jinkosolar, the world’s leading solar company, the congestion in Shanghai and Ningbo usually worsens at this time of the year. However, the recent one is far worse as compared to last year and normal seasonal levels as well. Consequently, this will lead to longer delivery time and a substantial rise in transportation costs.
In addition, due to the travel restrictions, extended waits at checkpoints, coronavirus test requirements, and potential quarantine upon return, many truck drivers are struggling to get the cargo containers delivered in and out of the ports on time. These factors could send freight rates soaring.
Responding to the question regarding the latest situation in Shanghai and suggestions to overseas customers, Dany Qian, VP of Jinkosolar said, “Although the Shanghai and Ningbo ports remain operational, activities such as warehousing and staffing will be affected, which would cause delays, and cross-country transportation may be hindered too.
It is not a single logistic issue; it impacts all export cargo. So, understanding and patience are needed, and being updated with the latest shipping information is also necessary. Since the very beginning of this breakout in Shanghai, Jinkosolar has kept close communication and cooperation with vessels suppliers to prioritize handling of queued containers, planning for knock-on effects to minimize the impact of the lockdown on the port's vessel backlog.”
With skyrocketing shipping cost and additional shipping delays, Dany Qian went on to propose possible solutions and a way forward for the industry and JinkoSolar. “First, increase the inventory level considering the prolonged shipping lead time and logistic uncertainty. Secondly, upgrade your product and technology solution, shift towards more efficient panels to dilute the rising logistic cost per watt. Finally, secure the orders for the
upcoming projects of 2022 at the earliest possible time. The price trend is likely to rise consequently to reflect these shocks in the supply chain.”
