Lockdowns in China are having greater impact on global supply chains than the war in Ukraine and will be felt even after they are lifted, the head of Deutsche Post DHL Group's freight business has said.
China renewed COVID-19 lockdowns in major centres in March and April, hitting production and consumption and heightening risks for parts of the global economy heavily dependent on the country.
"After an opening, traffic jams will probably form in front of U.S. and European ports," DHL's Tim Scharwath told Reuters, adding that "it will take longer than we had thought until the trade system normalises again".
He said that global supply chain problems would probably continue beyond the crucial Christmas shopping season and into next year.
"China is the workbench of the world," Scharwath said. "All goods from high-tech to fashion are affected by the developments in Shanghai," he said, adding that the speed with which China lifts all restrictions will be crucial.
Shipments normally arrive in Europe and North America little by little, Scharwath said, adding that a flood of containers could overwhelm ports unless China ends the lockdowns gradually.
Investment In Americas Division
Last week, The Americas division of Deutsche Post AG will invest $137 million (€128.4 million) this year in increasing its operating capacity, including spending on airplanes, its chief said.
DHL Express in the Americas - which covers countries from Canada to Chile - is also planning to double its electric vehicle fleet from 327 units, the division's chief executive, Mike Parra, told Reuters.
"Just this year there will be $137 million in the Americas, in operation expansions, installation and building capacity; the other part is investments in airplanes," Parra said, adding that the company will add a new flight from Miami to South America in July. "The last part of investments is in electric vehicles."
Read More: DHL, Kaufland Join Forces To Reduce CO2 Emissions
News by Reuters, edited by ESM – your source for the latest supply chain news. Click subscribe to sign up to ESM: European Supermarket Magazine.
