Blog: Is Shenzen lockdown COVID’s parting shot or a harbinger?

The news that China has imposed a lockdown on Shenzen and its 17.5 million residents comes at a time when elsewhere in the world the disruptions of COVID-19 appeared to be receding into the background. The delays caused by last summer’s lockdowns in Malaysia and Vietnam, while still being felt, were also being recouped, giving hope that predictability might be returning to the furniture sourcing equation.

That now appears premature.

While the Shenzen lockdown is only expected to last a week (where have we heard that before?), the ripple effects could be profound and seem certain to impact shipments through China’s massive Yantian container terminal.

While the port itself has not been shut down yet, according to a report in Fortune, trucks carrying finished goods and components are unable to enter the city. The report cited a note from SEKO Logistics indicating that, “No cargo will be able to load in Yantian from next week, and vessels most likely will omit the port.”

No one could be blamed for thinking “here we go again.”

The Shenzen outbreak, despite coming at a time when COVID-19 appears to be on the decline, is a stark reminder that it can still disrupt the smooth flow of goods, particularly in regions where lockdowns are part of the containment strategy. And given the history of the virus and the consistency with which one outbreak leads to two and three and so on, it doesn’t seem unreasonable to have concern about other outbreaks and further disruptions.

Certainly there are bigger headlines and other potential disruptions — seen the price of wood lately? — but events in Shenzen are a stark reminder that whatever the post-pandemic “new normal” looks like we are still quite a distance from its arrival.

The one-two punch of obscenely high container prices and manufacturing disruptions in Asia has sparked a frenzied effort to find and pipeline alternative global sources. And that’s without consideration of potential geopolitical disruptions, which have started to pop up with increasing frequency in reporting around events in the Ukraine.

While detailed discussions of such implications are best left to media outlets whose expertise is more geopolitically focused, it’s worth remaining mindful of the strategic aspirations of key global powers and trading partners.

While we all spend most of our time focused on things like wood finishes, seat depth and rising average price points, it’s worth remembering that the furniture business remains global and as such is subject to shifting global currents and the aspirations of the countries that influence them. The metaphor that, “if a butterfly flaps its wings in the Amazonian rain forest, it can change the weather half a world away,” seems particularly appropriate to the furniture industry of late, particularly at a time when a microscopic virus is disrupting traffic at one of the world’s largest and busiest container ports.

Hopefully this is a blip on the return to normality and not a sign of more disruption to come.

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