Export NZ executive director Catherine Beard says shipping logistics have worsened in the last few weeks.
“Although it has been tough all the way through, the sense we get from people is that they have been getting their product away, but that is now changing,” Beard said.
She says small to medium exporters are struggling, especially the horticulture and seafood industries, with cool store space in Hawke’s Bay and Nelson either full or filling fast.
Silver Fern Farms (SFF) chief executive Simon Limmer says unreliable shipping logistics have been compounded by rising freight prices.
“Our biggest challenge remains shipping, with the situation getting worse not better,” Limmer told shareholders in a newsletter.
“With delays in ports, some chilled containers are arriving in-market too close to expiration to go into retail, resulting in product being frozen and chilled premiums lost.
“The situation is going to be a major challenge if not resolved by October, when we head into the crucial Christmas season.”
Onions NZ chief executive James Kuperus says some full containers have been delivered and recovered from ports three or four times before being loaded aboard a vessel, delaying the arrival in market by four to five weeks.
The sector exports 180,000 tonnes of onions and Kuperus says the delays mean they have missed access to the optimum markets and price.
“We saw it coming last year, that it was going to be a tough time, but it has exceeded our expectations,” Kuperus said.
Using charter vessels has been investigated but with logistical issues a global problem, any available ships have been contracted.
In announcing a record profit for its 2020-21 season, Zespri chief executive Dan Mathieson has also been cautious about the risks from global supply channels this season.
“There is incredibly strong demand there for kiwifruit, but where the challenges are is in getting fruit to consumers. We are 25% up on delivered fruit compared to last year, in a very challenging set of circumstances, we have done very well,” Mathieson said.
He says two-thirds of Zespri’s crop is shipped using chartered vessels and these vessels supply the early season crop. But with the remainder of this season’s fruit to be shipped using containers, delays, lack of ships and port congestion both here and overseas are presenting real challenges.
Te Mata Exports executive director Murray Tait says apple packhouses are working shorter hours due to insufficient storage for finished product.
The three main apple export ports of Napier, Nelson and Port Chalmers are all impacted, but Nelson growers are hardest hit due to fewer shipping lines calling at that port.
Tait estimated about 60% of this year’s crop has been shipped and 70% packed, but at an estimated 18.5 million trays, the crop could be four million trays down on last year due to storms hitting Nelson and a lack of labour during harvest.
“If it was a full crop, I doubt we would have been able to handle it,” Tait said.
Shipping disruption and rising prices is not only affecting exports.
Rabobank’s senior agricultural analyst Wes Lefroy says ocean freight prices are at record highs, which on some routes is adding up to 5% extra to the farm gate cost of products such as fertiliser.
“We don’t expect this situation easing any time soon with vessel fleet growth at a record low and shipping demand very high,” Lefroy wrote in Rabobank’s NZ Agribusiness monthly.
Data from international freight logistics company Freightos reveals costs on the Europe-North America route have risen 90% since the start of the year, while rates on the Asia US-East Coast rates are 173% higher, and from Asia to the US-West Coast are 218% higher compared to the same stage last year.
Defying early covid-19 predictions of a retail slump, Freightos says “non-stop demand for ocean freight from Asia to the US” is causing a lack of capacity and forcing up shipping rates.
Sixty percent of all global goods are shipped by container.
