Wednesday, May 18, 2022

Kotahi finds bright spot in freight pile up

While easing somewhat, global supply chain issues have not disappeared and fuel costs are also adding to the shipping bill for exporters.

The Kotahi report points out that despite the improvement in vessel waiting times, at any given time about 12% of the world’s vessel capacity is effectively laid up, waiting to berth.

While easing somewhat, global supply chain issues have not disappeared and fuel costs are also adding to the shipping bill for exporters.

In its April market outlook New Zealand’s largest supply chain company Kotahi reports it has seen some minor improvements in aspects of freight operations globally, with reliability and waiting times for ships recording some improvements.

By February, global industry data had reported a decline in average delays for late vessels,and the number queued outside United States west coast ports, particularly Long Beach. 

Average delays for late vessel arrivals had fallen from eight days to seven in February, still almost double that of historical averages. 

Schedule reliability has improved from 30% to 35% globally, again well back on historical averages of 80-85%.

The Kotahi report points out that despite the improvement in vessel waiting times, at any given time about 12% of the world’s vessel capacity is effectively laid up, waiting to berth.

The report also captures some of the effect the Russia-Ukraine war is having on global fuel prices, including bunker fuel for shipping.  

The 33% increase in bunker fuel experienced between January and early March is anticipated to add US$100 per twenty-foot container onto costs over the coming quarter.

Kotahi’s report also identifies Shanghai’s ongoing lockdown as an emerging global supply chain risk. 

Carriers are advising operations in Shanghai are slow,and utilisation remains at unsustainable levels because of slow gate movements. 

As a result a number of carriers have implemented a suspension on reefer and dangerous good bookings into Shanghai Port, encouraging product to be sent to alternate destinations until further notice.

Kotahi anticipates ongoing capacity restrictions for NZ exporters through the peak export season, with the supply of refrigerated containers remaining tight but consistent.

In its latest supplier newsletter Silver Fern Farms also acknowledges Shanghai’s situation could worsen, with the port effectively closed this week for bookings.

Kotahi reports the bright spot in the local logistics chain are Port of Tauranga reporting reliability of 53% in February, the highest point for reliability since August 2020, despite increased demand due to issues in Auckland and Sydney.

Total
0
Shares
More articles on this topic