“We’re now getting to the point where there are not enough containers, or in fact even enough air freight space,” Ffowcs-Williams says.
There’s always been something of an imbalance between full and empty containers to and from NZ because we export greater volumes than we import so the country is a “net importer” of empty containers, he says.
With many of our exports needing to be chilled or frozen, we need a high percentage of refrigerated containers, called reefers.
“NZ uses a hell of a lot of reefers and what happened quite early on, and it’s rearing its head again now, is there’s not enough containers coming into the country with goods in them, like electronics and other consumables, to match demand for exports,” he says.
“There are probably fewer containers moving round the world and you’ve also got the situation where we can produce enough food for 40 million people and there’s only five million of us so what we consume locally, from a food point of view, is really not a lot to do with how much we can push out.”
Ffowcs-Williams is head of supply chain for Datacom, New Zealand’s largest technology company which has large clients including, Zespri and MBIE.
He recently spoke to exporters and academics at an event called “Controlling the Oscillating Supply Chain with Real Time Visibility” at Lincoln University’s B.Linc innovation centre.
“There could be as little as a third of normal air freight capacity available so product is getting pushed into other channels and there’s not enough to take all the exports at the moment,” he says.
“It seems to have got worse in the past few weeks as this crisis deepens around the world.”
Ffowcs-Williams argues that the solution lies in using data and technology to create greater efficiencies, better linking demand for export space with availability.
“If you have really good visibility of all the container freight coming in and where those containers are all the container freight going out and the capacity, and if you could get all that data into a place where you go, actually, there is a spare thousand containers sitting around in terms of partial or full containers and I just need to get my 10 cubes into a 40 foot container somewhere, there’s that much capacity and it’s going to the same port, great,” Ffowcs-Williams says.
The trouble is, all that data could be spread across 20 or 30 different freight consolidators who may or not have access to that information.
“The more information you share, the more efficient the system becomes,” he says.
He says the software is available reasonably cheaply to achieve that, as long as the data can be shared.
“It’s not so much a refusal to share, it’s having systems that make it easy to share, not creating a burden in any one point in the supply chain,” he explained.
“You’ve got to book your container and people will share that on a portal but that’s not getting into other people’s systems very easily.”
Fonterra and Silver Ferns Farm-founded Kotahi, a supply chain collaborator, is making good progress making the supply chain more efficient, Ffowcs-Williams says, but even they are hampered by not getting more timely data.
Container locations typically only get updated once a day, if they’re lucky, so nobody knows when something’s actually arriving in port, or if it’s running late.
“That makes it very hard to book a truck so you’ve got stuff sitting in a dock for 24 hours more than it should and then you’re getting charged demurrage because you had it sitting there too long and the whole system becomes very inefficient.” he says.
“If you move to good interfaces and real time data, the whole system becomes more efficient.”
