Tuesday, 02 August 2022 08:55

Shipping jam bites exports

Written by  Sudesh Kissun
The shipping sector remains in the middle of a global disruption, and this is impacting on NZ exporters. The shipping sector remains in the middle of a global disruption, and this is impacting on NZ exporters.

Global shipping disruption is continuing, with two out of every three ships caught in a 'traffic jam'.

Kotahi chief executive David Ross says the shipping sector remains "very much in the middle of global disruption".

Speaking at the NZ Primary Industries Conference in Auckland last month, Ross pointed out that some NZ trade lanes had lost 30% of capacity due to ships being caught in this traffic jam.

One of the key measures of global shipping is schedule integrity - how many container ships are arriving and departing on time against their published schedule.

Normally, shipping schedule integrity is around 80%, meaning four out of every five ships call in at the right time.

However, disruptions over the past three years have seen it drop below 30%, says Ross.

"It has picked up fractionally today and is sitting around 35%.

"So, it means two out of three ships globally are not on time. They are in a big shipping traffic jam at ports waiting to get serviced and get away and we lose capacity."

Ross says ships have a rotation, going around in a loop of 40- 49 day cycles, but if they are caught up in this traffic jam they don't do as many cycles in a year.

"Some of our trade lanes out of NZ have seen 25 to 30% of capacity disappear due to the ship being in the traffic jam."

This impacts delivery of containers back into NZ and feeding services to mainline vessels from place like Nelson where a lot of small horticulture exporters are based.

Ross says the situation remains tricky and hasn't got much better.

T&G group shipping manager and chair NZ Council of Cargo Owners, Simon Beale, told the conference that the shipping traffic jam is affecting major port cities around the world.

In the US, ships are waiting for 40 days before getting a berth at Los Angeles Port. Fortnightly sailings from NZ to Seattle Port have now stretched to six-weekly sailings.

He says getting empty containers to regional ports like Nelson where there is a huge pipfruit industry gets challenging.

"People are carting products down to Lyttelton. They are moving product all around the country just to get product out."

Zespri's head of NZ supply Jason Te Brake expects the shipping challenges to remain fro the next 12 to 18 months.

"There may be cautious optimism but the next season will be another challenge," he says.

He says Zespri managed to get all its fruit shipped this season. Te Brake puts this down to its partnerships with charter vessels. About 50% of Zespri kiwifruit are shipped on chartered vessels. Te Brake says charter vessels also face challenges like labour shortages to discharge cargo at some ports.

"It's a tough environment but we leverage off a resilient team and our partnerships with long term charter providers and container vessel lines.

"We got all our fruits shipped this season."

More like this

T&G Global trims half-year losses

Food and vegetable grower and marketer T&G Global has trimmed its half-year losses compared to last year, as it makes progress delivering its strategy and continues to recover from the impact of Cyclone Gabrielle.

Global shipping rates soar again

Covid-19 took global shipping rates to mind boggling highs, but over the subsequent 12-15 months they returned to more sustainable levels. Fast forward to July 2024 and rates have nearly doubled over three months.

Well done Kotahi!

OPINION: Fonterra's decision to join forces with other primary sector exporters and launch a supply chain collaboration, Kotahi, is paying huge dividends.

Featured

‘Nanobubble’ trial trims irrigation water usage

North Canterbury dairy farmer and recently-elected deputy chair of DairyNZ, Cameron Henderson, is enjoying a huge reduction in irrigation water use after converting a pivot irrigator to drag perforated drip tubes across the ground instead of elevated sprinkler heads.

Editorial: Elusive India FTA

OPINION: Without doubt, a priority of the Government this year will be to gain traction on the elusive free trade deal with India.

Sport star to talk at expo

Rugby league legend Tawera Nikau is set to inspire, celebrate and entertain at the East Coast Farming Expo's very popular Property Broker's Evening Muster.

National

Sweet or sour deal?

Not all stakeholders involved in the proposed merger of honey industry groups - ApiNZ and Unique Manuka Factor Honey Association…

Machinery & Products

Loosening soil without fuss

Distributed in New Zealand by Carrfields, Grange Farm Machinery is based in the Holderness region of East Yorkshire – an…

JCB unveils new models

The first of the UK’s agricultural trade shows was recently held at the NEC Centre in Birmingham.

» Latest Print Issues Online

The Hound

Times have changed

OPINION: Back in the 1960s and '70s, and even into the '80s, successive National government Agriculture Ministers and Trade Ministers…

Hallelujah moment

OPINION: The new Public Service Commissioner Sir Brian Roche has just had the hallelujah moment of the 21st century in…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter