April 21, 2022: -On Monday, the container shipping industry could see a “powerful” pickup starting as the Covid situation in China eases in April, Tim Huxley, founder of Mandarin Shipping, told CNBC.

Since last month, Shanghai has been on lockdown because of a rise in Covid-19 cases. The city, home to the busiest container port globally, subsequently suffered from a breakdown in the logistics supply chain.

“The port itself has stayed open, so ships are coming in, but it’s getting cargo to and from the port,” Huxley said.

Since late February, China has been slammed with a surge of Covid cases in the country’s worst wave since the pandemic began in early 2020. China has imposed stringent rules on truck drivers entering Shanghai, its largest city and one of the most brutal hits in the recent outbreak. Those restrictions have made it more expensive and less efficient to transport goods in and out of the city.

Huxley said Shanghai has tight supply chains and “just-in-time” deliveries. As a result, he said, factories quickly shut down when supply chain disruptions occur, where the “big stress” has been.

The queue of container ships outside major Chinese ports like Shanghai has been getting longer by the day, and Huxley said many vessels are not even calling in Shanghai now.

Supply chain disruptions have dogged the global economy since the early stages of the pandemic due to lockdowns, changes in consumer behavior, and, more recently, the Russia-Ukraine war, among other factors.

It may take a while for things to return to normal ultimately, but Huxley says “considerable” comfort can be taken in China’s “rapid” bounce back from its 2020 Covid lockdown. 

“As a result, we then had the strongest surge in container freight rates and shipping demand in history,” he added.

“This time, we don’t know, but there will be huge amounts of pent-up demand, both with factories returning to work and getting these exports and manufactured goods out again,” Huxley said.