Covid-19: Exporters on alert as China lockdowns impact supply chains

Shipping giant Maersk says it's running low on 40-foot refrigerated containers in New Zealand as our primary industries keep a close watch on the impact of Shanghai's Covid lockdown on exports.

Maersk said its New Zealand to Shanghai services continue to call at Shanghai with two direct services still operating, but due to reduced trucking capacity and availability in the Chinese city it has a shortage of 40ft high cube reefer containers in New Zealand with the difficulty of getting them here.

Maersk head of Oceania export market My Therese Blank said Shanghai Covid restrictions were now entering their fourth week.

"While we have seen Shanghai ports Waigaoqiao and Yanghsan working as per normal, including vessel operations, yard handling and gate-in-and-out, we have faced temporary reefer and dangerous cargo congestion in the terminals," she said.

Maersk expected to shortly resume reefer ship and dangerous goods cargo booking acceptance, which ceased temporarily on April 14, to Shanghai, the world's largest port centre.

Warehouse operations partially resumed from this week, Blank said.

"Though landside transportation is still facing some bottlenecks, the authorities have urged all possible efforts to keep the supply chain moving and minimise the impact on economic and social activities.

"Maersk is working closely with our customers on alternative solutions including multi-modal services via barge and rail as alternative solutions between Shanghai and nearby cities."

Meanwhile primary export sectors are closely monitoring lockdowns in China.

Kiwifruit marketer Zespri said lockdowns were widespread in response to an increase in Covid cases. China is Zespri's biggest market and the export season is in full swing.

"This season's fruit has arrived at Taizhou Port in China and our second shipment is currently unloading. The new partnership with Taizhou Port is aimed at shoring up our supply chain and with the impact of the lockdowns in Shanghai we're pleased to have that added option," a spokesperson said.

"The lockdown is disrupting supply chains but while it's still early, our season is off to a positive start due to the efforts of port officials and our team and distribution partners in China, with our fruit being distributed for sale. It is possible we will see some impact however and we're monitoring the situation closely, and adapting as needed."

Meat Industry Association chief executive Sirma Karapeeva said Shanghai was not a major import port in China for New Zealand red meat, but it was an important entry point. And she warned disruption there could spread throughout the Chinese port network, leading to delays and congestion at other ports.

For New Zealand meat exporters this could mean delays in getting containers cleared and higher costs if containers have to be re-routed to other ports, she said.

"There could also be a knock-on effect on the inland distribution network for our products."

At this stage indications are that the port was continuing to operate, but there was significant disruption and congestion, Karapeeva said.

"The red meat sector has demonstrated real resilience and agility during the Covid-19 pandemic. Our strong customer relationships and our diverse market portfolio will enable our exporters to swiftly move products between markets and channels and mitigate the impact of the Shanghai disruption."

China is also dairy exporter Fonterra's biggest market.

Gordon Carlyle, director global supply chain, said the company's teams in China and New Zealand were working together to find alternative routes into the market to keep product flowing.

They were preparing contingencies should the shipping disruption into Shanghai persist.

"As well as congestion at the Shanghai Port, transportation disruptions in and around Shanghai have logistically made things more challenging," Carlyle said.

"However, we have been managing Covid-19 restrictions in China now for more than two years and we continue to get products to market despite the challenges."

Port of Tauranga chief executive Leonard Sampson said for New Zealand export ports the risk from continuing Shanghai shipping disruption was if export containers started piling up at terminals here.

Congestion could result as exporters tried to find alternative Chinese ports and routes leading to delays clearing containers from wharves here, he said.

The Tauranga port is New Zealand's main export gateway.