CONTAINER VESSELS STRANDED IN CHINA

[Anchor Lead]

Korean container vessels bound for Shanghai, China are stranded in the sea off the Chinese port-city because of the prolonged lockdown. Companies that export their goods to China could sustain severe losses.

[Pkg]

Shanghai has been under lockdown for nearly three weeks now, resulting in a supply chain chaos. South Korean container vessels bound for Shanghai are currently stranded in waters off the Chinese port. With all roads and railways connecting to the port blocked, cargo backlog is becoming more severe by the day. Finding vehicles to transport goods is a challenge, and transportation fees have soared. Currently about 30 percent of cargo is believed to be stranded.

[Soundbite] Kim Eun-young(Eunsan Shipping Company) : "Although the lockdown has been lifted partially, even processing LCL shipments is difficult because of delays in delivery. We still cannot unload our containers."

Local exporters are concerned about sustaining severe losses. Most of the factories in Shanghai have pulled out of the city. About a dozen firms from Busan with operations in Shanghai are experiencing supply chain disruptions. The Shanghai lockdown could disrupt components supply as well. This comes when firms trading with Russia are already struggling to receive payments because of Russia's invasion of Ukraine. If the lockdown continues, it will likely cause a stagnation in the local manufacturing sector.

[Soundbite] Chung Sung-yup(Busan Chamber of Commerce and Industry) : "Disruptions in raw materials production and supply are inevitable. Businesse have to find other marketing channels or reduce manufacturing in China."

The government says there are no signs of direct supply chain disruptions stemming from the prolonged lockdown in Shanghai, yet it promised to help importing and exporting firms by finding alternative ports.