(Yicai Global) April 14 -- The recent Covid-19 outbreaks in China are playing havoc with the country’s freight logistics sector, as highways are blocked and drivers are placed in quarantine. No amount of money can ensure deliveries in some areas and it will take a long time for things to get back to normal, industry insiders told Yicai Global.

It is very hard to get drivers and vehicles, the head of a logistics firm told Yicai Global. Covid-19 safety measures have turned some cities into ‘black holes’ as truck drivers are able to get in, but are unable to get out. Some of the company's drivers have been locked down in cities for over a month. When a few of them finally managed to arrive at their destinations the truck doors were sealed and they could not even get out of their own trucks, he added.

E-commerce giant JD.com approached the firm the other day looking for delivery vans, he said. “We used to welcome orders from such big clients, but now we cannot meet their demand no matter how high a price they offer,” he added.

Many places in the Yangtze River Delta region, which encompasses Shanghai and parts of Zhejiang, Jiangsu and Anhui provinces, have closed highway exits and toll booths. A number of our container trucks are stuck on highways, unable to get off, and we cannot even retrieve our empty containers, the head of a freight forwarding agency said.

As a result, prices are skyrocketing. “It used to cost CNY6,000 (USD942) for road haulage from Shijiazhuang to Shanghai, a journey of 1,000 kilometers. It now costs more than CNY20,000 (USD3,141),” the logistics firm manager said. The main reason being that the cost of the driver’s 14-day quarantine at the end destination is now added to the freight fees.

An auto parts manufacturer booked four containers at the end of last month to transport products from its plant in Quzhou, southeastern Zhejiang province to the Port of Shanghai. It used to cost CNY3,900 (USD612) but the price has surged almost five times to CNY19,000, the company director said. But even at this price he can’t find anyone to deliver the goods because “nobody is available.”

The express delivery sector is also badly affected. One courier firm has closed 15 percent of its dispatch stations, and another 1,000 stations cannot deliver goods nationwide, the firm’s regional manager said.

The coronavirus will have a “widespread and profound” impact on the industrial chain, said Cai Chengyu, president of Xiamen Huashang Zongheng Venture Investment. He expects his own supply chain part of business would drop by as much as a quarter in short term due to the outbreaks.

It will take at least two months for business to recover once the Covid-19 restrictions are lifted, Cai said.

It took two weeks to one month for the supply chains in central Shaanxi province and northern Tianjin city to get back to normal after previous lockdowns, according to a research report by Shenwan Hongyuan Group. But their economies are much smaller than that of Shanghai and the surrounding region, so this time it will take much longer.

Editors: Tang Shihua, Kim Taylor