Friday, April 26, 2024

Shipping backlog will take time

Neal Wallace
Importers and exporters are likely to face further disruption as the backlog of shipping caused by the grounding of a ship in the Suez Canal is cleared.
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New Zealand apples are among the small volume of cargo on board vessels caught up by the six-day delay until the Ever Given container vessel was freed on Monday night.

Kotahi chief executive David Ross says it will take time to clear the backlog.

“New Zealand importers and exporters will experience some disruption to network services and container flows, as 6% of shipping capacity was removed from the global network, and it will take time to clear the vessel queues,” Ross said.

“We continue to have good access to vessel space and we will watch this closely, working collaboratively with our customers and partners to manage this situation.”

NZ Apple and Pears chief executive Alan Pollard says NZ apples are on vessels en-route to Europe that are or will be affected by delays.

“Suez is the main trade lane for our exports to Europe and the UK,” Pollard said.

“Some shipping lines have already rerouted vessels around the Cape of Good Hope, which means in general terms 12 to 14  days additional steaming time.”

While the reopening of the waterway is welcome news and alleviates some of the exporter’s worst fears, Pollard says there could be a flow-on effect.

“There remains considerable concern not just about these delays but also what this might mean to the flow-on effects to vessel schedules and availability of containers to service exporters needs in our critical peak season period,” he said.

A Fonterra spokesperson says it does not have any product on the Ever Given or products caught up in the congestion.

“We are not currently experiencing any material impact but we are watching the situation closely and working with our shipping partner Kotahi to understand the full impact of this situation,” it said.

Charlie Pesti of US-based technology and logistics company Project44 says the issue now will shift to port congestion as the more than 300 ships delayed on either side of the Suez Canal will be needing to discharge cargo.

They will be joined by ships diverted around Africa also having cargo to unload. He says ports at Jeddah, Rotterdam and Singapore could potentially be overwhelmed with 55 vessels already anchored at Rotterdam.

Pesti estimates $118 billion worth of cargo was stuck in transit by the blocked canal.

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