EXPORT

Exporters struggling to get container space

Wednesday 17 March 2010, 11:17AM
By Business NZ
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Exporters are struggling to get their goods away due to a reduction in global shipping capacity and a seasonal bulge in production according to Export NZ, a division of Business NZ.

Executive Director of Export NZ, Catherine Beard says exporters are reporting difficulty securing container space, particularly in Hawkes Bay (Port of Napier), Christchurch (Port of Lyttelton) and Otago (Port Otago).

“Some exporters are having problems getting container space despite having firm bookings. They are getting bumped at the last minute and their goods are not going a day or two later, but they are experiencing delays of a month to 6 weeks to get their products away.”

“This is not desirable for a country that is pinning its hopes on an export led recovery and not good for exporters’ relationships with overseas customers.”

“Part of the problem is that the peak season puts pressure on every year with a bulge of seasonal and perishable goods, but added to this is the fact that the shipping lines have rationalised their operations (there was an oversupply previously) and taken capacity out of the market in order to boost up their profitability.”

“Some shipping companies are also slow steaming to reduce cost. This slow steaming results in longer delivery times for exports, has shelf life implications and could require greater inventory levels.”

“Exporters who are exporting higher value cargo in higher value containers (refrigerated) and are regular contractual customers will get priority over those with lower value cargo or those that are sporadic exporters.”

“So new exporters or smaller exporters are not best placed in the queue. In terms of a solution, there is no easy answer since New Zealand is a small player in the international scheme of things, and the rationalisation of capacity has been a global move rather than a NZ specific move.”

Export NZ recommends that exporters’ shipping strategy needs to be part of their total business strategy.

“Occasional exporters should investigate teaming up with regular exporters or higher value exporters, so as to get the benefit of stronger contractual relationships.”