Even those companies in China whose factories are operating under so-called closed-loop systems could be forced to stop work due to parts shortages or logistical challenges that make moving people and goods around the country nearly impossible, a European chamber of commerce has said.
“A few companies are running in closed-loop production now. Those companies are facing challenges and may shut down very soon due to lack of logistics and workers,” Maximilian Butek, chief representative at the Delegation of German Industry & Commerce in Shanghai said in a LinkedIn post on Monday.
“Their workers for closed-loop production have been working for more than three weeks and need to be replaced,” Butek asid.
Photo: Bloomberg
Butek added that most of his association’s members cannot “have production sites running, as they cannot get raw materials delivered and cannot deliver their products to their customers. The logistics in Shanghai is not working.”
Officials in China’s financial hub have been encouraging companies to restart output that was halted due to the city’s strict COVID-19 lockdowns by using closed-loop systems in which workers live on site at their factories.
While some, such as Tesla Inc and Quanta Computer Inc (廣達電腦), which makes laptops for Apple Inc, have restarted operations, the experience has not been all smooth.
Tesla only has inventory for just more than two weeks based on its new closed-loop schedule, a person familiar with the matter said, while workers locked in Volkswagen AG’s Shanghai factory do not have sufficient supply of the auto parts needed to make vehicles.
Meanwhile, cargo deliveries into Shanghai Pudong International Airport are becoming backed up, Taipei-based air and ocean freight forwarder and logistics specialist Dimerco Express Corp (中菲行) said.
Prior to the city’s lockdown, about 1,000 shipments could arrive per day and about 80 percent would be picked up by truck, said Kathy Liu (劉辰), Dimerco’s director of global sales and marketing.
However, because there are not enough trucks to fetch goods, that pick-up rate has slumped to just 10 percent, she said.
“There are more and more shipments accumulating at the warehouse or at the freight forwarders’ bonded warehouse,” Liu said. “So that’s caused a lot of problems, because we don’t have enough space to store all those pending shipments, but they keep arriving.”
The pain point remains cross-provincial road transportation and the different locally imposed restrictions and health requirements, requiring truck drivers to manage an array of policies.
Truckers wanting to move between Shanghai and Jiangsu Province to the north were typically having to wait two eo three hours each time to take COVID-19 tests, Dimerco said.
Earlier this month, Beijing required that highways be kept open and unobstructed.
The Chinese Ministry of Transport ordered that no COVID-19 testing checkpoints be set up so that traffic on the main lanes of highways remained smooth.
Other logistical problems still exist causing delays, Dimerco said.
“A lot of truck drivers see the potential risk, so they’re not willing to take the orders for these routes,” Liu said. “This is a very challenging period, not only for us, but also for those like couriers or online e-commerce companies.”
Dimerco has only managed to keep its Shanghai warehouse open by allowing staff to sleep in the facility since March 28.
The supply and logistics problems are not contained to Shanghai.
Butek said the delegation’s companies in the Yangtze River Delta had found that logistics are not working there either, “since different cities have different rules.”
“For technical staff, which need to execute quality assessments or maintenance of machines in other parts of China, it is almost impossible to commute or travel,” he said.
“Customers might turn to other sources in China if the situation doesn’t change soon,” he added.
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
RSS