Shipping challenges continue to add costs and distractions for exporters.
In an update to suppliers, Silver Fern Farms chief executive Dan Boulton says the Red Sea conflict, Baltimore Bridge collapse, drought in Panama and industrial action at Australian ports are all causing issues that have disrupted shipping in recent months.
There has been a small reprieve with the Maritime Union of Australia and port owners reaching agreement to end their dispute, while services through the Panama Canal are starting to resume with the arrival of the rainy season.
When services through the canal were reduced due to low water levels, Boulton says cargo was transited between the coasts by rail, which led to congestion.
All major shipping lines are still diverting away from the Suez Canal and around the Cape of Good Hope to avoid military tensions in the Red Sea and Gulf of Aden, adding two to four weeks’ travel time in each direction.
Boulton says financial services company JPMorgan has calculated this will add 0.7% to global core goods inflation and 0.3% to overall global inflation in the first half of this year.
Rabobank reports that tensions in the Middle East saw Brent crude oil prices lift in March, the third consecutive month of increases, but there was some favourable news with new vessels coming into service and helping alleviate capacity constraints.
The bank’s monthly report predicts shipping volatility will continue into next year as tensions escalate between Israel and Iran, further impeding energy flows through the Strait of Hormuz and forcing ships to re-route.
Boulton says adding to the disruption is the collapse of the Scott Key Bridge in Baltimore in the United States, after it was struck by a container vessel.
While not directly impacting NZ freight, the incident has closed the port, which handles more than 1 million containers a year, and this, too, could potentially disrupt shipping schedules.
On the positive side, Boulton says global shipping company Maersk has opened a new 18,000 square metre container storage and handling hub at Ruakura.
The facility has direct rail access to ports in Tauranga and Auckland, state of the art blast freezers that can store 30,000 pellets of product and cold storage that has the highest possible rating.
Meanwhile analysis by Container xChange warns that geopolitical disruptions are forcing up the price of containers.
Average leasing rates for containers shipped between China and North America increasing between 67% and 92% from the fourth quarter of 2023 to the first quarter of this year.
