Global shipping expert warns higher prices, disruptions to continue for next year

By Kim Moodie of RNZ

A global shipping expert is warning exporters to expect higher prices and ongoing shipping disruptions to continue for the next year at least, and says it is likely things will not return to how they were pre-COVID-19.

The pandemic and China's COVID-zero policy resulted in major backlogs at the Port of Shanghai, the biggest in the world, and while things have eased since the height of the outbreak, delays and high prices are still causing headaches for exporters.

Charles Finny, a partner at government relations consultancy Saunders Unsworth and the independent chair of the Port Company CEO Group, said some pressures had eased, but shipping prices were still higher than they were in 2019.

And he said New Zealand was not out of the woods yet - with the war in Ukraine and China's COVID-19 policies likely to cause global uncertainty in the years ahead.

"There's a lot of uncertainties. What is the state of the global economy going to be? Are we going to be seeing recession in certain key markets, and what will that impact be on global shipping?"

In some ways, a reduction in demand in the short term might be a good thing for shipping, Finny said.

"It won't be terribly good for many economies, including our own, but that could mean an easing of congestion."

He expected global shipping capacity would increase over the next two years on international shipping lines.

But major players would have to balance that with attempts to curb their carbon emissions, he said, which could result in longer travel times.

Finny expected the industry would look very different post-pandemic.

"I don't think that people should be expecting a return to the world we were in in 2019," he said.

"I would, personally, anticipate higher prices."

He also thought people would be running their businesses in different ways.

"The 'just in time' model is probably something people are reconsidering, and as a result of COVID, there's been a whole lot of off-shoring and investment decisions to move factories from where they were to new destinations, so that we're not all dependent on one or two production centres around the world."