China’s vehicle sales drop as COVID-19 restrictions are put in place
Car sales in China fell by over 10% last month as automakers continue to struggle with factory closures due to the country’s strict approach to COVID-19. According to the China Passenger Car Association, passenger-car sales dropped 10.5% year over year in March to 1.58 million vehicles. Quarterly sales were also affected, falling 4.5% from a year earlier to 4.92 million vehicles, the association said.
In response to the rising cases of Omicron, China has recently implemented lockdowns in key cities such as Shanghai as well as the northern province of Jilin. Both of these areas are hubs for auto manufacturing, where companies such as Volkswagen and General Motors produce vehicles. Some manufacturers have been forced to operate in a bubble-like environment to keep production going, meaning employees have to live together in the factory campus to reduce the risk of infection.
Pressure on the industry is likely to grow, according to Cui Dongshu, secretary-general of the association: “The Covid infections have had a tremendous impact on the production of car makers, while consumers are going out less for car purchases.” In response to the crisis, automakers such as Tesla have drafted plans to prepare for a scenario where it cannot resume production until the end of April.
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Delays at key British port set to damage fresh produce exports
Food producers in Britain are warning that perishable goods are losing their value due to congestion around the port of Dover, the main route for road freight to mainland Europe. Queues at the port were reported to be around 20 miles long this week. A number of issues have led to this, including the fact that P&O Ferries, who accounted for a third of capacity at the port, suspended operations last month.
This loss of capacity at Dover has also been worsened by the high levels of Easter tourist traffic as well as technical problems with a government website which provides documentation that is now mandatory since Brexit happened. The British Meat Processors Association (BMPA) said that fresh meat has been stranded for days due to the ongoing issues, and this could still worsen.
BMPA’s CEO Nick Allen said that “in our ‘just-in-time’ food supply chain, this kind of failure to supply means that we start to lose EU customers, who turn to other countries to provide a more reliable supply of product.” He criticized British authorities for not prioritizing the flow of perishable food at this time. British Environment minister George Eustice told reporters that creating a priority queue for trucks carrying perishable goods wasn’t realistic.
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Air cargo volumes drop due to supply chain challenges
Recent global events such as Russia’s invasion of Ukraine and China’s lockdown of Shanghai have influenced the global air cargo market, which is yet to return to pre-pandemic levels. Carriers have had to take lengthier routes to avoid banned air space due to the war, deal with high fuel costs and even cancel flights. Air cargo volumes fell 4.5% from March 2021, while capacity dropped 4%, however rates remain high and were 27% higher than the year before.
In Shanghai, China, staffing problems due to lockdowns have slowed down cargo operations. Crane Worldwide Logistics has said that “cargo handling at PVG airport continues to be almost impossible” as cargo cannot be delivered into or collected from the airport, causing carriers to cancel multiple flights. This drop in capacity has led to significantly higher rates, with Shanghai- Northern Europe rates increasing by 43%.
Commenting on the recent events, Niall van de Wouw, chief airfreight officer at Xeneta has said that “we have been reminded of how the limited control the general airfreight market has over its own destiny and how it is impacted by passenger traffic trends, disruption in the oceanfreight market, and geopolitical events.”
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