Shipping Delays Hitting NZ Hard.
Stuck in traffic the other day and listening to Mike Hosking on ZM Newstalk, I heard Shippers’ Council chairman Simon Beale talk about the difficult times faced by our ports and those importing goods into NZ.
It echoed the situation that we at Fero have been dealing with over the past few months. And the situation is certainly not improving any time soon! Supply and Delivery lead times are coming under increasing pressure – worse than at any time I can remember.
Simon talks about the importance of companies planning ahead, forecasting more effectively and placing orders early. Here’s a link to that interview and I encourage you to take a few minutes to listen to it:
China is very busy with internal demand as a result of them re-emerging from COVID. Production lead times are being pushed out further and further as they put their domestic needs before their export needs.
Chinese New Year
Next year Chinese New Year falls in mid-February and therefore we need to plan for this disruption now. In previous years this has not been an issue until 6-8 weeks from the holiday. Increased demand internally, the need to quarantine for inter-regional travel and shipping disruptions are all contributing to potential disruption.
Without a doubt, orders need to be placed by mid-November to avoid any CNY disruption.
Here’s an example of the struggle we face. We have received communication from our shipping agents today explaining a delay on a shipment from China.
● The ship is scheduled to arrive in Auckland on 8 Nov and is required to anchor until 15 Nov, when a berth has been secured for it at the port.
● In addition to this, recent heath and safety measures introduced at all ports means it is taking approximately 4 days for the container to be offloaded from the vessel.
● Processing and delivery to site can then take another two days!! So for a ship that is arriving on the 8th Nov, we are not expecting to see the goods until two weeks later!!!
Not just China
There are also huge delays at overseas ports throughout the World, but particularly in Australia. This means we are seeing delays in on-shipping to NZ which is also having a knock-on effect with a significant impact on airfreight.
Working Hard to Maintain Supply
We are working hard to mitigate these issues and ensure a secure supply chain for our raw materials. This is hugely helped by those customers that can accurately forecast into next year and work with us to ensure that we can mitigate the impact of COVID on shipping and production around the world.
For more commentary, take a look at this recent article on NewsHub where Matt Ball, Ports of Auckland General Manager had this to say
“2020 has been the year when everything that could go wrong did go wrong. “
Our processes and planning have given us the ability to buffer against some of the delays that we are seeing and we are proud to continue to deliver, mostly as normal. I feel that over the coming months we are going to have to work even harder on this and more collaboratively with our customers to ensure that we can continue to deliver in full on time.
Over the next few weeks, the Fero team will be proactively reaching out to all our customers in an effort to get your requirements forecasting. This isn’t to try to up-sell you or create sales opportunities. More, to secure consistent supply and work with you effectively so you can continue unhindered production.
In the meantime, if you would like to discuss the shipping situation in NZ, please contact me.