Friday, December 1, 2023

NZ exporters remain ‘challenged’ by supply chain disruptions and costs

Neal Wallace
Global cargo, freight routes stabilise, however, no return to pre-pandemic prices or schedules.
Ministry for Foreign Affairs and Trade report reveals the aviation industry faces ongoing challenges with lack of available aircraft, labour shortages, and high fuel prices. Photo: Jeffry Surianto
Reading Time: 2 minutes

The reliability of global shipping and air freight services has largely stabilised, albeit not at pre-covid prices and delivery times.

A Ministry for Foreign Affairs and Trade report says demand for cargo space is easing, but also notes significant changes among shipping companies and routes.

“It may take time for the benefits of falling global shipping prices to be fully realised in NZ due to factors such as our distance from major global supply lines, recent weather events and inflation,” the report says.

In another significant change, the report notes that shipping lines Maersk and the Mediterranean Shipping Company have announced an end in 2025 of a 10-year alliance, potentially ending access to one of the few global shipping companies offering extensive coverage of trade routes.

The impact is not clear.

“While it could lead to reduced coverage on certain routes, it is also possible that it could help to boost competition and bring down prices.”

Maersk has also withdrawn its Coastal Connect service from NZ, a dedicated coastal shipping service introduced last year to connect Auckland, Tauranga, Nelson, Timaru and Lyttleton.

“Maersk will now use the Port of Melbourne as a hub instead, which could improve shipping capacity on trans-Tasman routes.”

Aviation freight services are also improving, although fuel prices mean charges are higher.

“Auckland Airport’s chair, Peter Strange, projects that full recovery is still another two years away,” the officials note.

“The aviation industry faces ongoing challenges with lack of available aircraft, labour shortages, and high fuel prices.”

There are reports that airfreight capacity between North America and Europe has returned to 2019 levels.

A spokesperson for global freight company Kotahi said while the rest of the world is less congested, NZ exporters remain “challenged” by disrupted supply chain conditions and additional costs.

“We have made some progress. However, we continue to see some areas along the NZ coast experience poor vessel schedule reliability and port congestion.”

NZ has adequate shipping; the issues are port capacity and labour shortages.

“One of the critical steps to improve the NZ supply chain and return to pre-covid norms is the move back to fixed berth windows by all NZ ports.

“This has been proven to improve labour productivity when there is sufficient adherence.”

While this is paying dividends at the Port of Tauranga, there are still disruptions in the South Island as it transfers to fixed berth windows.

People are also reading