Tag: China

Omicron Variant Bullrushes China

While China’s zero-tolerance policy is among the strictest approaches in the world, a recent surge in Omicron COVID-related infections have hit the mainland hard, forcing it to reconsider how it deals with the pandemic. The omicron variant has run rampant through the country, causing the latest jump in daily cases. With tens of millions of people in China, including the entire north-eastern province of Jilin and the tech-hub city of Shenzhen infected, the government has ordered them to lockdown. Trucks are being delayed due to testing of the drivers, products are piling up in warehouses – it’s a madhouse. 

 

China’s largest city, Shanghai, has joined the list after battling the new wave for nearly a month, as makeshift hospitals and quarantine centers crop up across the country. Suspending work at electronics factories in the south and a wide variety of industrial companies in central China, lockdowns have also closed highway exits in cities near Shanghai unless each driver shows a negative PCR test. This has in turn created miles-long lines of trucks trying to carry crucial components between factories. 

 

China’s zero-COVID strategy is becoming increasingly difficult to sustain as more infections are detected. Most of China’s policy to combat this is staying the same. Such as:

  • Travel to and from China is limited with restrictions on internal movement
  • Travelers coming into China are screened then sent to a government-designated hotel for mandatory 2-week quarantine, followed by further monitoring
  • While regular testing programs are carried out, should infections be detected, residents can and will be evicted and sent to quarantine facilities (along with targeted area lockdowns)
  • All non-essential businesses have been shut, apart from food shops and essential suppliers
  • Schools are closed and public transport is suspended with almost no vehicle movement 

While these remain the same, others have been relaxed, such as:

  • Those with mild symptoms no longer need to attend designated hospitals, but they still need to isolate at centralized facilities
  • Quarantine period rules have been reduced
  • City-wide testing is no longer being carried out, replaced by local community testing
  • Self-testing kits are to be made available in stores across the country, as well as online, but those who test positive will need to take the PCR tests

With truck traffic to the docks interrupted, ships are facing delays at the ports. Airfreight is also facing complications as the Civil Administration of China said that many of the remaining international flights into Shanghai’s Pudong airport would be suspending flights until April 1st.

 

Having remarkable success at containing the pandemic prior to the current outbreak, China has managed to have lower numbers than Europe or the US. Prior to March 24th, there were just over 14,000 new cases in the whole of mainland China, whereas in the UK over a similar period, there were over 610,000 new infections. 

 

Is China’s policy working? From the numbers, it would appear so, despite the recent omicron variant hitting mainland China with a force to be reckoned with. With Future Forwarding, we’re keeping an eye on the situation in China to stay up to date on how this will affect you and your cargo. Should you have any questions about this situation in regards to how this will modify your shipping plans, please contact your Future Forwarding representative today and let us help you stay on track. 

COVID Keeping Delays Consistent in China

The “COVID-zero” strategy throughout China and Hong Kong threatens to drive up logistics costs by 40% and drive down capacity to one-fifth of pre-pandemic levels as cities around Beijing restrict travel in response to new cases. Airports, highways, railways, ports, and other transportation sectors in Shenzhen, which shares a border with Hong Kong, are stepping up pandemic control measures as small outbreaks of the COVID-19 Omicron variant pop up in Tianjin, Xian, and Guangdong, China. 

 

With Cathay Pacific canceling hundreds of flights and the Port of Tianjin and airport suspending all pickup operations, the situation is stretching the supply chain to the breaking point. The omicron variant ended a three-month streak without local transmissions in Hong Kong where a two-week ban on incoming flights from eight countries is in effect until at least January 20th. 

In Shenzhen (an area where previously the most recent case was in May of 2020), two confirmed cases of COVID-19 have a contract tracing footprint of 123 people, some of who are isolated on a cruise ship that is now quarantined in the harbor pending testing. The fear of silent transmission chains has seized the cities leading to travel restrictions pending a negative test within 48 hours and requiring commuters to work from home rather than move between cities.

 

Because authorities in Shenzhen determined that it was highly likely that exposure came from a contaminated cargo shipment extra precautions are being taken at ports and airports to protect handlers from coming into contact with COVID-19. The added security measures will further delay cargo processing in addition to the reduction in workers as companies test and adopt enhanced screening procedures. 

Apart from ports and airports, highways and railways are experiencing delays, especially in the trucking sector as many warehouses turn away drivers from outbreak impacted areas. Last week, trucking operations at the Port of Ningbo were delayed by testing and this week trucking around Jinhua Yongkang is suspended pending testing results. 

 

Because Future Forwarding is dedicated to providing individualized supply-chain solutions to a range of businesses we encourage our clients to reach out for more information and ideas on how we can mitigate the delays we are facing. We know this could mean last-minute changes to carriers or modes of transport which could come with additional costs, but will do our best to mitigate or prevent them wherever possible.

Unwelcome supply chain surprises: Withhold Release Orders

Importers need to add one more worry to their supply chains: detention orders issued by CBP for issues surrounding withhold release orders. Just as companies should perform due diligence before importing a shipment to look for antidumping or countervailing duties, questions should be asked of foreign suppliers whether or not the finished goods or component parts are the subject of withhold release orders and findings that would prohibit entry.

 

Every finished product begins with a bill of materials. The finished product, depending upon origin and parts, could need to undergo substantial transformation or meet minimum regional value contents to qualify for reduced or duty-free treatment under a bilateral or regional free trade agreement.

 

What happens, though, when one of those components turns out to be prohibited for entry? Importers of FDA regulated merchandise know about automatic detentions – if a product contains an ingredient deemed not safe for humans or animals, the agency detains and denies entry for consumption. CPSC regulated merchandise is the same. Fish & Wildlife prohibits improperly documented endangered species. 

 

Importers of goods from China and other countries are becoming increasingly familiar with Withhold Release Orders – a determination made by CBP that goods from a country, manufacturer, or region are produced using forced or prison labor. When an entry is presented for release, Customs places the merchandise on hold and refuses to allow the importer to clear and receive the goods.

 

Recently, an apparel importer filed a protest challenging an exclusion of goods subject to a WRO. CBP excluded a shipment, claiming the cotton came from Xinjiang Production and Construction Corporation (“XPCC”) and its subordinate and affiliated entities who are the subject of a WRO. 

 

CBP denied the protest.

 

The importer provided documentation showing the raw cotton was sourced from entities in the U.S., Australia and Brazil. What CBP demanded, and the importer could not produce despite the number and different types of records they presented, was no affirmative determination that at any point in the production forced labor was not used.

 

CBP maintains a list of active Withhold Release Orders that spans countries such as China, Brazil, India, Malaysia and others. Impacted industries include fishing, photovoltaic cells and even tomatoes.

 

Future Forwarding strongly encourages our clients to familiarize themselves with CBP’s Informed Compliance Publication on Forced Labor (available here) and also encourages requiring written answers about component sourcing and final point of manufacture locations. Companies should also lay out the expectation with vendors that production records can and will be produced on demand for either an internal compliance audit by the importer or in response to an inquiry from Customs and Border Protection.

 

For more information about Withhold Release Orders and whether your imports could be subject to this increasingly-used program by CBP, contact your Future Forwarding representative today.

For a call back get in touch:

Contact Us

Ⓒ Future Forwarding 2025. All rights reserved.
Terms of use | Privacy policy | Sitemap | Web Design by Cocoonfx