Shortage of refrigerated shipping containers causes havoc for NZ food exporters

Pressures on the international supply chain resulting in fewer shipping liners coming to New Zealand has caused a critical shortage of refrigerated shipping containers.

Exporters say the situation is in dire straits territory and is having a series of knock-on effects making sending goods to overseas clients a logistical nightmare.

Seafood exporter Intersea says the shortage of containers began in January as shipping liners decided to reroute and skip New Zealand or Ports of Auckland amid unloading delays, but the situation was continually getting worse.

With no end to disruption in sight, founder Gary Monk said it was a worry what the long-term impacts would be for Kiwi exports.

Monk told the Herald he was concerned that the container shortage could lead to bidding wars between companies, with limited containers auctioned off to the highest bidder.

Intersea purchased frozen fish in January to send to a client based in China, which was expected to arrive in February, but it has been unable to be shipped and still sitting in cold stores due to a shortage of refrigerated containers.

Monk was unsure of when his customer of over 30 years will get that product. He said if it was shipped now, it would not arrive until May. Intersea won’t get paid for the order until it arrives at its final destination.

“The shipping companies cannot give us New Zealand primary exporters of frozen products enough containers to meet the demand,” said Monk.

“Consequently, we’re put in this position where we are unable to satisfy the contracts that exist that we entered into in January when the market conditions were at a certain level. Now, we’ve still got product, the market conditions have changed somewhat including the shipping companies unable to help themselves with demand and freight rates have gone up to whoever can pay the highest, might get the container.

“[This situation] is the worst I have seen in 40 years, and it is a disaster.”

Monk said the shipping companies have warned the shortage of containers is a problem that will not get better any time soon.

“The shipping lines aren’t guaranteeing us any containers at all. We might not get any until May or June, so when that fish that we sold in January finally arrives in the market the international price of that fish could be anything.”

In addition to delays in outgoing orders, Intersea like other exporters had been slapped with rising and additional costs, paired with shrinking cashflow.

“There are huge financial implications and huge compounding effects.”

While customers were generally understanding of the situation, Monk said he worried that international customers would turn to alternative markets to source the same goods.

Few exporters were making a profit as a result of current market conditions, he said.

“We need more empty containers arriving in New Zealand so we can fill them up.”

Kent Ritchie, general manager of freight-forwarder and logistics provider Scales Logistics, said seafood, pet food, meat and fruit exporters – food exporters across all categories – were facing the same issues with shortages and delays to incoming and outgoing shipments.

Exporters of non-perishable goods were also being affected. The current wait time for an empty container was up to four weeks, he said.

He too said there was no end in sight for the issues, and with the peak fruit export season fast approaching it would likely get worse in the weeks ahead.

Slowing shipping liner schedules were causing great problems. This week, ships on the same service were delayed causing container supply issues, Ritchie said.

“There’s huge global issues at ports, look at Los Angeles, there are bottlenecks everywhere.”

Source: Read Full Article