International shipping woes linger over Southland
Container ships are sitting off the west coast of the United States for 20 to 30 days, slowing down industries in Southland that are waiting on goods.
360 Logistics Invercargill manager David McAllister said shipping delays had lingered for three years, and it was getting worse, affecting most industries.
That’s compounded by the fact that certain containers that came into NZ from September needed to be fumigated for brown marmorated stink bugs, slowing everything down again, he said.
The Drewry World Container index, which tracks prices per 40-foot container, shows a decline since late-February, but the price is still 22% higher than a year ago.
The index price was US$9477 on February 24, and has dipped $7635 as at May 26.
McAllister believed a real sticking point was US products made with Chinese components.
The Drewry index says Shanghai to Los Angeles freight rates have gone up 52% (to $8720) year-on-year.
The Los Angeles to Shanghai price has gone up 68% since this time in 2021, to $1250.
Twenty to 30 days waiting to get into a US port meant a ship did three to four fewer voyages a year, McAllister said.
SouthPort chief executive Nigel Gear said he was waiting on a large forklift for the port, where the delivery time had gone from 30 months to 80 months.
Covid-19 created increased demand for imported goods into the US by 20%, which created congestion at ports and in the internal supply chain, specifically road, rail and warehouse space, Gear said.
Retail NZ’s Aimee Hines and Ia Ara Aotearoa Transporting NZ’s Nick Leggett said retailers were under enormous pressure from more people shopping online.
In turn a large volume of empty containers were stranded in the US and difficult to reposition back into Asia, he said.
SouthPort’s cargo mix was 85% bulk and 15% containers, and the bulk volume had not been impacted to any great extent, but the main impact had been the regularity of ship calls at the port, Gear said.
Power Farming Gore manager Pete Shaw said because the company paid for equipment as-landed in New Zealand, international suppliers were holding on to products waiting for cheaper shipping prices.
“And needless to say we’re still waiting.”
For example, a tractor Shaw ordered was supposed to come in December, “then it was January, February, and it came in March”.
“It is frustrating, but you just need to understand we live in a different world,” Shaw said.
Pre-pandemic, Shaw could get a control valve for front-end suspension on a tractor flown from Germany to New Zealand overnight. Overnight was out of the question now, shipping would take too long, so Shaw did order it by air two weeks ago, and that part was still not here.
New Zealand is one of 29 countries which the US is not posting items to, because of fewer passenger flights to carry cargo and a lack of general airfreight availability.
As at of October 2021, the Government had given Air NZ $321m in subsidies to continue to support airfreight.
MPI says risk of the stink bugs come from new and used target vehicles, machinery, and parts exported from brown marmorated stink bug-risk countries during the high-risk season, generally October to December, as well as sea containers exported from Italy.