All eyes now on Covid-19 shipping disruption impact on New Zealand's exports. Photo / File
All eyes now on Covid-19 shipping disruption impact on New Zealand's exports. Photo / File
"Philosophical" may be the best way to sum up how New Zealand's biggest export sectors are viewing warnings Covid-19 global shipping disruption will worsen, with Auckland port's congestion just one of several flashpoints around the world.
Maersk, the world's biggest container line, has told the Herald import supply chain congestionin the upper North Island is likely to worsen and not ease until the second quarter of next year, and that 10-day ship waits for unloading at Auckland will also make the coming export season "challenging" due to container exchange logistics.
Dairy sector leader Fonterra, the world's sixth-biggest dairy company by revenue and New Zealand's biggest company, along with the $9 billion meat export sector and horticulture market sweetheart Zespri, all say they're watching the situation closely but are prepared.
But one primary industry exporter isn't so sanguine.
Disruption at ports is "significant" and supply chain issues, now manifesting, were always one of the biggest risks importers and exporters faced from Covid-19, said the commentator, who declined to be named.
The challenges were not fully understood by the public or the Government and would affect not only import product availability, but New Zealand's export-led recovery.
"It's a global phenomenon so there's not much we can do but hang on for the bumpy ride."
Maersk's caution comes as shipping industry information forwarded to the Herald from Ports of Auckland in defence of criticism of its congestion issue advises of new Covid-related delays unloading reefer (refrigerated) container ships at major China port Xingang, and Australian ports precincts - mainly Sydney - gridlocked by heavy cargo volumes as the effect of previous industrial action cascades.
Auckland is the country's main import gateway. This week, with the Christmas sales season closing in, ships were waiting 10 days to be unloaded. Shipping lines have imposed congestion surcharges of up to US$500 ($713.96) per container on importers.
Imports value in the year to end October was $58b, down 10 per cent on the previous period, according to government figures.
Port of Tauranga is the main marine exit for New Zealand's exports, valued at $60b in the year to October, up 1.2 per cent. Container ships avoiding Auckland have been offloading big volumes of cargo there just as the main export season gets under way.
The dairy export season has started and will continue into January. Still to come are frozen meat exports, fruit, vegetables and, from March, kiwifruit.
A Port of Tauranga spokeswoman said "no alarm bells" about the export season outlook had been sounding, though there were "warning lights".
"It's not just an imports issue. It's everyone trying to avoid Auckland."
Exporters who usually used Auckland port were turning to Tauranga, dropping containers at Port of Tauranga's inland South Auckland port Metroport, which was full.
KiwiRail was putting on more trains south from Metroport to Tauranga from next week, she said.
Asked for Tauranga port's view on the forecast challenge to exporting, she said: "It's very difficult to forecast anything, there are so many unknowns."
Fonterra, the world's biggest dairy exporter, hopes its shipping contracts will avoid Covid fallout. Photo / File
Fonterra global supply chain director Gordon Carlyle said shipping containers had been in short supply but the farmer-owned company had been able to source what it needed to support exports.
"What we're seeing is the global manufacturing industry having to work overtime with stronger-than-expected consumer demand. As a result, the freight industry is also working hard to keep up and port strikes in Australia, coupled with local supply chain issues related to constraints at the Port of Auckland, have exacerbated matters."
Fonterra's partnership with Maersk and Kotahi, New Zealand's largest supply chain collaboration, founded by Fonterra and meat company Silver Fern Farms in 2011, had proven "hugely valuable" in managing the shipping disruption, he said.
Fonterra is the world's biggest exporter of dairy product.
Zespri, with revenue of $3 billion in 2019-2020, said it would continue to use a mix of shipping types next year while working with long-term shipping and port partners. Most kiwifruit is exported through Tauranga port with some exiting via Northport in Northland.
Kiwifruit exporter Zespri hopes to pull off another Covid shipping disruption go-around next year. Photo / File
Chief global supply officer Alastair Hulbert said the 2020 season shipping programme had been completed successfully through a mix of container and reefer vessels.
"...We are well placed to commence shipping our fruit to markets next March and to manage any impacts should they arise."
Meat Industry Association chief executive Sirma Karapeeva said container supply had been an issue for the sector in recent years "however as New Zealand's second-largest goods exporter we have the experience and expertise to manage the situation".
"Although we anticipate the situation worsening next year, the agility and resilience our companies have shown throughout the Covid-19 crisis means we are well-placed to mitigate any risks to our supply chains.
"We will continue to monitor the situation to ensure we are prepared in the event of any deterioration."
Product values of NZ exports in 2019:
• Dairy, eggs, honey: US$10.7 billion (27.9% of total exports) • Meat: US$5.3 billion (13.9%) • Wood: $3.3 billion (8.7%) • Fruits, nuts: $2.2 billion (5.9%) • Cereal/milk preparations: $1.5 billion (3.9%) • Beverages, spirits, vinegar: $1.4 billion (3.7%) • Fish: $1.2 billion (3.2%) • Machinery including computers: $1 billion (2.6%) • Miscellaneous food preparations: $886.9 million (2.3%) • Modified starches, glues, enzymes: $815.5 million (2.1%) • New Zealand's top 10 exports accounted for about three-quarters (74.3%) of the overall value of its global shipments.
