Global freight chaos costing horticultural exporters dearly

COVID-19 has caused a significant amount of congestion for shipping around the world.
COVID-19 has caused a significant amount of congestion for shipping around the world. Photo credit: Getty

By Eric Frykberg of RNZ

The freight chaos that has plagued Northland is often replicated overseas, according to exporters.

This brings huge costs to New Zealand producers, and some horticultural exports have been ruined by delay.

The problem in New Zealand stemmed from the diversion of a ship from the crowded Auckland port to Whangārei, which required a convoy of trucks to get containers back south.

This caused delay and expense.

But exporters said the same thing often happened overseas.

For example, a ship heading for Australia could be diverted between Sydney, Melbourne and Brisbane, requiring slow and costly land transit of goods back to their original destination.

Horticulture Export Authority chief executive Simon Hegarty said the problem was even more widespread than that.

"There is a significant amount of congestion for shipping around the world," he said.

"In New Zealand, Australia and Asia, vessels are not able to berth and unload their cargo because of a traffic jam at ports.

"The whole thing has dominoed into a major disruption of cargo flows around the world."

Hegarty said the problem began with Covid, which disrupted shipping schedules to such an extent, that skippers could no longer give ports any assurance of when they would arrive.

As a result, ports stopped allocating ships a pre-booked berth - instead it became a case of first-come-first-served.

Subsequently, skippers arriving at a port with too many other ships ahead of them in the queue would unilaterally divert elsewhere to unload their cargo.

This left exporters forced to expensively and sometimes unsuccessfully retrieve cargo from a distant location.

Martin Napper is export market manager for Avoco - which handles 65 percent of avocado exports.

He said this was the worst shipping crisis he had ever seen.

"We have had port omissions in our Asian service," he said.

"A vessel sailing to Korea (with avocados) is suddenly diverted to Shanghai and that fruit is subsequently shipped back to Korea 14 days later, and it is unsaleable because of the condition of the fruit."

Napper said at least four containers of avocados had been ruined so far, at a cost of about $100,000 per container.

He expected the problem to persist until at least the middle of next year.

An extra problem was the difficulty in getting hold of shipping containers.

Some companies appear to have been able to overcome these problems.

One of them is Fonterra, which told investors at a quarterly briefing last week that it had not been seriously harmed by this problem.

But all companies in the export trade have had to have Plans B and C in their back pocket, in case of unexpected bad news.

Entire countries have been adversely affected by this chaos, even China, whose world-beating economic recovery from Covid has been dented by problems with shipping.

"We have so many orders but just cannot ship things," said a salesman in Zhejiang province.

"Boxes are piling up at our factory and we don't have much space left. It's just hard to book containers, and everyone is bidding for them with high prices."