Shanghai lockdown affecting Panama and Latin America

With the latest outbreak of coronavirus in the city of Shanghai, strict confinement has been put in place as part of China’s “Zero Covid” strategy,  triggering delays in the logistics chain in the largest port by volume of containers.

In 2021, the Shanghai terminal represented 17% of China’s container traffic and 27% of the Asian giant’s exports. It is among the most important in international trade, and now thousands of containers are piling up, putting additional pressure on global supply and Latin America’s inflation crisis.

There is already talk that at least 20% of the container ship fleet is trapped without being able to unload its cargo. According to Vessels Value, a provider of maritime data, the waiting time for ships in the port of Shanghai is around 50 hours.

The tail end for Panama is imminent and for the president of the Panama Industrial Union of a (SIP), Luis Frauca, in the next two weeks delays will begin to be perceived in the arrival of merchandise from China.

For the industrial sector, the delay could exceed five weeks, which will affect the availability of goods such as construction materials, supplies for the industrial sector, electronic equipment, clothing, and footwear, among others.

According to the Comptroller General, the price of some materials used in construction, such as electrical wire and steel rods, increased between 19% and 40% during the first quarter of 2022.

Carlos Allen, president of the Panamanian Chamber of Construction (Capac), described the situation of the port of Shanghai and the shipment of cargo to Panama as complicated. “It is the most important port in the world and has reduced its capacity by more than 35%. and is going to affect the construction materials that are imported, in terms of price and availability”.

Allen indicated that steel, tiles, electrical products, and special fire-fighting systems are among the materials imported through Shanghai.

Information published by Janus Henderson, a British global asset management group, washing machines, vacuum cleaners, solar panels, electronic components, and textiles top the list of products that are exported through the Shanghai terminal.