New Zealand could get left behind as shipping disruptions worldwide could see companies prioritising who to ship to - expert

  • 05/08/2022

An expert is warning the nightmare of months-long shipping delays could return, as just when it looked like the ports were catching up, the signs are pointing to significant disruptions hitting again.

With China's zero COVID-19 policy closing shipping ports and Russia's invasion of Ukraine causing logistical disruptions in Europe, shipping delays are expected worldwide. 

However, an expert is warning as countries prioritise their logistics systems, New Zealand could get left behind.

Massey University supply chain researcher Dr Carel Bezuidenhout conducted a survey with over 100 supply chain practitioners in the country on the major risks they are facing in the next six months to one year.

Dr Bezuidenhout told Melissa Chan-Green on AM that the upcoming northern hemisphere winter, December to February, may cause a dilemma for some of our supply chains.

"It has been getting better… But in the upcoming northern hemisphere winter, we expected COVID perhaps in China creating a little bit more turmoil," he said. "In that, there could be possible ports and possible production sites closing up."

Dr Bezuidenhout said at the same time, the Russia-Ukraine war could disrupt logistical systems in Europe as well.

One of the main risks for New Zealand as a smaller economy is overseas companies could prioritise where they are shipping to and leave out New Zealand.

"Some businesses may say 'let's restructure and let's look at where our core customers [are]' and try to service those ones," Dr Bezuidenhout said. 

"New Zealand can often not be one of those core customers and because of that there could be changes in terms of their strategy and how they actually service New Zealand's economy."

Not only does this cause an issue for imports but for exports as well.

Fewer containers coming into New Zealand could cause pain for exporters this summer, as a container deficit could hit during New Zealand's prime time for exporting, late summer and autumn.

"We are not seeing as many containers coming in now compares to previous years and that may create a bit of a deficit on the export side," Dr Bezuidenhout said.

He said some exports are seeing this "blip" on the radar and are monitoring the risk and trying to counteract it.

"They will all try to counteract that risk and they will all be doing the same thing, and in a way almost bring the problem forward," Dr Bezuidenhout said.

"In the same way we all went to buy toilet paper when COVID broke out."