Shanghai is home to more than 25 million people and houses the world’s largest port. The city has been locked down for more than a month and there is growing concern China’s capital Beijing may follow suit.
The latest round of lockdowns and the disruption has once again underscored New Zealand’s dependence on China as its most important trading partner.
However, according to a recent report from the NZ China Council, China played an important role in pulling NZ through the covid-19 economic downturn, with goods exports to China rising $3.3 billion, or 19.8%, over 2021.
China accounted for 32.6% of NZ’s goods exports in 2021, up from 25% in 2018.
The latest supply chain disruption has been significant, with shipping companies such as Maersk stopping new bookings for reefer cargo ships and dangerous goods until further notice due to port congestion.
“With the announcement of suspension of bookings for reefer services into Shanghai by the major shipping lines, we have been working with our in-market teams to reroute product via other ports and to manage timing of delivery,” Fonterra’s director of global supply chain Gordon Carlyle told BusinessDesk.
According to Bloomberg, satellite data suggests that Chinese port activity is even lower than the levels during the first coronavirus outbreak in 2020.
For Fonterra, the issue isn’t just shipping. Ground transportation has also been hit by the restrictions.
“Transportation disruptions in and around Shanghai are also contributing to the logistical challenges that we are currently facing,” he said.
However, “we have been managing covid-19 restrictions in China now for more than two years and we have continued to get products to market despite the challenges.”
