A Mainfreight spokesman said the situation is changing daily.
“In short, we still have flight options, even with reduced air freight capacity.
“However, to put it as simply as possible, airfreight rates and transit times have increased significantly.
“I can broadly summarise the market situation in New Zealand as total passenger air cargo capacity is now down by approximately 96%.”
Typically, air passenger jets comprise 80% of NZ’s air freight capacity, with only three companies operating cargo-only flights.
Some freight rates to China have doubled and to the United States tripled.
Mainfreight reports flights operating include a full freight schedule from Singapore Airlines that comprises 15% of NZ’s air freight capacity and no change from Emirates which claims 12% and Cathay Pacific with 5%.
However, Air NZ which provides 35% of the capacity has had major reductions, with suspension of services through most of North America, Buenos Aires, Vancouver, Tokyo, Denpasar and Taipei.
That has left some primary sector exporters grappling with logistical issues to supply fresh or chilled products effectively.
Mountain River NZ Venison director John Sadler said a major campaign on the east coast of United States is being jeopardised by the loss of air links.
“Although we are coming to the end of our season we have a regular weekly shipment heading up there.
“We used to be able to fly Christchurch-New York. Now we have to truck to Auckland, get a flight if it’s even possible to Los Angeles and then truck it across the US.
“It has added time and cost and we are not even sure how much cost that will be yet.”
But he wants to maintain a presence in the market and is left with little choice.
“If things come back to normal we need to be there.”
As a venison processor he relies heavily on the hospitality/food service trade, which has all but shut down. He has to reconsider packaging and outlets as retail demand replacs hospitality demand.
Zurich, Switzerland, is an important, high-value market for Mountain River but costs to freight there have more than doubled.
“It is a premium product so we can absorb some increase but longer term we will have to re-evaluate it.”
NZ-based Chinese-owned companies Oravida and Milk NZ have established strong markets in Shanghai for fresh milk air freighted weekly to supermarket shelves and for direct online sales.
Between them the companies exported more than 100,000 litres of fresh milk a week with plans for significant increases.
Milk NZ managing director Terry Lee said airfreight capacity is well down and despite dairy manufacture being an essential industry, throughput has been reduced to meet covid-19 rules.
“Therefore, the trade volume has been significantly impacted.
“As long as air freight operates Milk NZ remains committed to the export of fresh milk to China, even if it costs more than usual. We will not increase the product price.”
One litre of fresh milk in Shanghai retails for about NZ$12-$14.
Air freight prices to China reveal significant increases in recent weeks.
Since mid February one airline’s rates have surged from less than $2/kg to about $3.50/kg but at one stage peaked at more than $5/kg.
Trade and Enterprise has moved to help facilitate air freight channels to Shanghai using Air NZ jets, due to depart April 12, 13, 14, 15 and 18.
A Christchurch-Shanghai flight has been scheduled for April 17 and an Auckland-Houston flight for April 16.
Oravida’s sales and marketing director in Shanghai, Daniel Zhao, said the reduced air freight capacity has affected his company’s ability to supply customers.
“Oravida decided to give priority to the key retail channel customers including Citysuper and Ole in order to maintain our relationship with them and our brand presence there.
“Other fresh dairy brands from Australia have not been able to ensure supply continuity during this time.”
He said there has been no decline in consumer demand for the products but the supply gap has enabled local Chinese brands to gain an increased share of the premium end of the market.
“The key to future success is in enticing those consumers back to the imported brands when supply reliability can be re-established, particularly in e-commerce brands.”
Meantime, farmers might face some delays getting machinery serviced over winter.
Tractor and Machinery Association president John Tulloch said Europe is a key source for spare parts and air freight links there are proving difficult.
“We are lucky it is this time of year, A lot of us have slowed down. Some air freight prices are four to five times more.
“Now most of us are just planning to use only sea freight.
“It may just mean winter services we would do from now on will be delayed until July when those parts are here.”
But with no Mystery Creek Fieldays most companies will have capacity to focus on later winter servicing.
There have also been supply issues caused by several European machinery factories shutting down or reducing capacity.
“A lot of companies in Italy, in particular, are affected with some parts not available at all at present.”
