• Regulatory changes for medical supplies create bottlenecks for air cargo out of China

    30 April 2020

    Since mid-April, China’s export restrictions on medical supplies and protective equipment, which are crucial for countries fighting the COVID-19 pandemic, have led to delays in deliveries and increased congestion in warehouses and air freight depots in China.

    With production resuming across China, local manufacturers have ramped up mass productions to meet the global demand of medical supplies. However, the export regulation introduced on March 31 to ensure quality control of medical products from China have led to significant congestion for items including masks, ventilators, surgical gowns, and testing reagents.

    This came after several countries including Spain, the Netherlands, Czech Republic and Turkey filed complaints to Beijing for low qualities in Chinese-made personal protective equipment (PPE). The Dutch authorities reportedly recalled 600,000 medical face masks sourced from China because of faulty filters. After coming under fire, Beijing tightened quality controls through inspections and export regulations on medical supplies. By April 26, 89 million poor quality face masks and 418,000 pieces of protective gear had been seized, while around 1,600 local manufacturers in China have been blacklisted for failing to meet quality standards and not having proper paperwork for export.

    In order to ease shipment congestion at several air cargo terminals, Chinese authorities on April 26 relaxed export restrictions on some medical equipment such as face masks, protective suits, infrared thermometers, and ventilators.

    Series of pharma export restrictions

    At the end of March, Beijing imposed export restrictions on Chinese-made COVID-19 related medical goods, in particular detection reagents, medical masks, medical protective clothing, ventilators, and infrared thermometers. Only companies approved by the National Medical Products Administration (NMPA) were allowed to ship their products overseas. The newly enacted regulation caused an outcry from local manufacturers, as previously, only CE certification was required to indicate that their goods meet the health and safety standards required for sale within the European Economic Area.

    On April 10, the Chinese government issued an additional order with a further 11 products on the list of items requiring additional inspections. Shortly after the new measures were applied, goods began to pile up at airport hubs and warehouses, causing delays in shipping. The U.S. and other international buyers alleged that China, the world’s largest producer of medical equipment, was hoarding important medical supply exports.

    In order to ease the bottlenecks as well as to reassure the international market, the Chinese Ministry of Commerce (MOFCOM) together with Customs and the State Administration for Market Regulation (SAMR) on April 25 issued a new decree on the management of non-medical face masks and medical devices that are not registered with NMPA. The new regulation allows local manufacturers of medical equipment that meets the national standards of the destination country to apply for export approval through an industry association. This indicates that companies can now bypass the previous policy imposed in March that would have required exporters to obtain a certification from NMPA.

    Resulting air cargo congestion

    The stringent customs regulations caused additional inspections of exported medical supplies, and resulted in extra paperwork and processing times for customs clearance. As all shipments have to pass through X-ray machines, cargo congestions at airports had been reported, which resulted in non-medical shipments to miss booked flights. Lack of capacities on planes, as well as limited space in warehouses and at ground handling have resulted in significant delays and longer transits times. At present, airfreight terminals in Shanghai, Xiamen, Guangzhou, Zhengzhou, and Shenzhen are reportedly congested with large outbound volumes of medical masks and other equipment.

    Due to international travel bans, about 60 percent of air cargo capacity has been removed from the global market, with only 20 percent of the world’s passenger planes left still flying. As capacity is lower than demand, customs brokers in Shanghai have raised rates for export clearance by up to six times due to an urgent rush to export pharmaceuticals from China amid the ongoing pandemic.

    Similarly, detailed customs processing times have been reported in Hong Kong and may spread to the rest of China with at least 90 percent of all medical cargo required to undergo stringent customs inspection. Some industry sources claimed that the newly enacted export restrictions have prevented PPE manufactured in the mainland from transhipping in Hong Kong, which forces the cargo through mainland airports.


    Shipment delays have caused disruptions for several healthcare related companies including 3M, Cellex Inc., Emory Healthcare, General Electric, Owens & Minor, and PerkinElmer. According to reports, General Electric circuit boards used for ventilators were delayed for 5-days due to confusion over the changes in China’s export rules but the cargo was cleared after the paperwork was eventually processed. Without the shipment, the production line at its Wisconsin plant would have been completely halted.

    With medical freight continuing to dominate air transport due to high demand, customers should expect reduced air freight capacity and higher rates in the coming weeks. As the situation remains volatile, companies and shippers are advised to check whether local suppliers meet the latest new export criteria. In order to partially avoid air freight congestion at airports, shippers may consider other modes of transport such as ocean and rail freight or even explore multimodal transport options to reduce delays and transit times.

    Resilience360 customers are advised to keep abreast of the situation and closely monitor forthcoming developments and regulatory changes.

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