Port of Tauranga is in its peak export season at the moment. Photo / NZME
Skyrocketing shipping costs that have jumped by up to 350 per cent in two years have not dampened demand for imported goods as New Zealand and Australian ports deal with rising container volumes.
But the boss of a Rotorua manufacturing company says, in spite of record sales, he is losing customers due to supply chain disruptions he described as "soul-destroying".
In spite of the demand, ports are reporting a drop in container ship visits. At the Port of Auckland, "tight trucking capacity" and "near overflowing" external container depots are causing issues.
Port of Tauranga will announce its six months to December 2021 results tomorrow and a spokeswoman said there was still widespread disruption throughout the supply chain.
''We are in peak export season at the moment, as well as accommodating some diverted vessels and import cargoes ... we are processing vessels as they arrive, so they may have to wait at anchor for a short time until a berth becomes available.''
There were 502 container vessel visits between September 2020 and June, 106 fewer than the year before.
Ports of Auckland spokesman Matt Ball said the number of container ships visiting had dropped from 583 in 2020 to 440 last year.
The ports handled 821,840 TEU [20-foot container] in 2020 compared to 846,593 TEU in 2021.
There were more containers in 2021 but over fewer ships, continuing a "long-term trend" as ships get bigger, he said.
''There is congestion right across the land-side supply chain in Auckland. There is tight trucking capacity, a shortage of labour within warehouses and distribution centres, and external container depots in the Auckland region are near overflowing," said Ball.
''This off-port congestion means containers aren't moved off port as quickly as usual, which leads to congestion on the port.''
Operational staff numbers had increased 17 per cent in 12 months and it expected to employ the same this year to keep up with demand.
A Port of Melbourne spokeswoman said manufacturing had been disrupted overseas from factories shutting down due to Covid cases, particularly in Asia and the US.
Now there was a backlog in the production of items including components needed for certain markets like the automotive and electronics industries.
There had been a surge in demand for certain goods including medical equipment, PPE, computer products, accessories, chairs and printers.
Another issue was Covid cases in the supply chain and container terminals, which meant staff have needed to be furloughed', while truck drivers and distribution centre workers were also impacted.
Fewer staff available meant it took longer to load and unload ships.
Since the start of 2020, southbound ocean freight rates from its trading partner [China] had increased about 350 per cent, excluding surcharges.
This month those costs were US$4250 (NZ$6283) a container.
Last year 3.29 million TEUs went through the port, which was a 14.6 per cent year-on-year increase.
A Port of Brisbane spokeswoman said there had been a 2.8 per cent decline in container vessels in the 2021 financial year.
Overall container volumes increased last year when the port handled a record 1.49m TEUs; a jump of 1.3m TEUs on 2020.
''Port of Brisbane's container volumes have surged over the last 12 months.
"This demand has been fuelled by a combination of government stimulus and travel restrictions, with consumers' discretionary income redirected towards building products, electrical goods and general household items.''
A Ports of Fremantle spokeswoman said it had seen a continuing decline in container ship visits and shipping delays were a global phenomenon.
''Global delays have had some impact with major shipping lines moving some of their larger vessels to bigger ports as they shift backlog of cargo from major ports. Covid has had a long tail in global logistics terms.''
However, she said bigger vessels were visiting so there had been no decline in trade as they could hold more containers.
''Total containers entering Fremantle Ports has grown each quarter since 2019. We have also seen increased trade volumes in non-containerised cargo like cars and parts.''
Figures for Ports of Fremantle show in 2020/21 there were 357 container ship visits compared to 413 in 2019/20. Container trade was measured in TEU. Total container imports and exports were 807,061 in 2020/21 compared to 783,437 in 2019/20.
''Soul destroying'' is how Hayes International general manager Nick Looijen described the supply chain problems and shipping logistics.
The global export manufacturing company, which has its New Zealand factory in Rotorua, was experiencing record sales despite Covid.
However, lead-in times for equipment had blown out to 18 months compared to five months prior and there was no easy way to pull back those timeframes.
''So then you start losing customers. Fortunately, everyone is in the same position and it's really crazy at the moment trying to mitigate all the potential roadblocks.''
Looijen said now it was buying 12 months' worth of parts in advance to try to counter growing lead-times and price increases.
Retail NZ chief executive Greg Harford said there were problems accessing and getting product to New Zealand, as well as getting cargoes offloaded, which retailers needed to sell to meet consumer demand.
''The delays are frustrating ... and retailers have needed to work really hard to keep shelves stocked. It's also meaning there is, in some cases, less choice of product.''
Many businesses were paying up to three times more for shipping than they were before Covid and there continued to be significant issues across supply chains.
Rod Duke, chief executive of the Briscoe Group, which owns Rebel Sport, said road freight and shipping costs had increased but the company was a substantial importer.
''We rely very heavily on shipping and as a consequence of that we have some long term contract rates.''
He said people who were not big shippers often relied on spot rates and they were different.
But business was still buoyant and sales were strong across the board, he said.
Tauranga Chamber of Commerce chief executive Matt Cowley said lengthy supply chain disruptions could put the trades or construction sector under financial stress if they couldn't reach project payment milestones.
There were rising costs and uncertainties of delivery dates particularly if goods required multiple transfers at overseas ports.
''People are not only shopping around for the cheapest price but also delivery times.''
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