13 Nov 2020

Covid-19, high demand, slow ports behind delivery delays - freight boss

From Checkpoint, 5:43 pm on 13 November 2020

Retailers are grappling with huge demand ahead of Christmas, but Covid-19 has slowed down the arrival of many goods heading for New Zealand.

Nearly 50 percent of retailers are expecting stock shortages ahead of the holiday season. 

Checkpoint approached a few retailers asking for one or two items people had been struggling to get their hands on.

First on the list was a 55 inch Nano Cell LG TV. Harvey Norman did not have any available when Checkpoint visited. A lot of the new stock is already pre-sold.

When looking for 32gb Kindle, Harvey Norman only had one left in store. Some were available online at Noel Leeming, but not on the shelf. 

For Briscoes and Rebel Sport, demand has been high since they returned to normal trading post lockdown, but owner Rob Duke said that pace was not matched in shipping times. 

Home and lifestyle retailer Redcurrent was having similar issues. Their sales usually peak around mid-November. 

While the business orders six months in advance for most of its stock, owner Rebecca Kain said many homeware items were still missing.  

The store's main supplier for cotton, accessories, cushions and nightwear had been unreachable all year, she said. 

Mainfreight managing director Don Braid told Checkpoint the domestic freight network "is finite".

"There's only a certain number of trucks, trains and coastal shipping containers that you can have. So, what we are asking our customers to do is to order earlier, and have less expectation on quick delivery."

Braid said there were no problems with transit times of vessels to New Zealand from somewhere like China, where a shipment usually took 15 to 20 days. 

"The problem is how long it has to wait in the stream outside either the port of Auckland or the port of Tauranga, and to be worked, and that sometimes can be eight to 10 days. 

"Then once the vessel has worked… say it's worked in Tauranga, then you've got a delay of at the moment between seven and 10 days for that container to be railed from Tauranga to Auckland, if it's an Auckland importer. 

"If it's a Tauranga importer it can be taken off the wharf, worked and distributed throughout the country. 

"Those are some of the things that we're trying to do for customers is negate that movement from Tauranga to Auckland. 

"If it's Auckland-bound and it finally gets a slot on the Port of Auckland, you've got that wait time of eight to 10 days. Once that comes off the wharf, then it's unpacked, into the warehouse, ordered and out for distribution. 

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Photo: RNZ / Samuel Rillstone

"Normally, transit time - for, say, from Auckland or Christchurch - is two to three days. At the moment that's four to five days because of the congestion and the availability of equipment," Braid said. 

Normally in Auckland a freight vessel should arrive on time and have a slot available at the wharf, he said. 

"Unfortunately with the problems that the Ports of Auckland have been having of late, and they will, I'm sure, have lots of reasons behind that ... unfortunately they are finding it a struggle to get these slots on time when they arrive here in Auckland.

"It's frustrating. I get it, it's not an easy time and this unusual demand perhaps wasn't expected. The consumer demand that we've got in New Zealand is strong.

"Anyone that thought that the New Zealand economy wasn't going take off either during or after Covid was really wrong. 

"I wouldn't call it a hot economy but it is definitely on the up, and that demand is hard to satisfy right now when you've got problems getting the freight from offshore into New Zealand.

"[Ports of Auckland] they've had problems and you have to say, yes, they are underperforming. 

"The lower productivity levels at this time of the year, this is peak time, is just not good enough, and I'm sure that they'll have all the excuses in the world but the reality is, the country requires that port to actually perform as best as they can to satisfy the demands of the retailers and importers of the country."

One thing Ports of Auckland did very well, Braid said, was communication with distributors like Mainfreight. 

"They communicate with our teams every day, letting us know what stocks, what containers are available and what's not available. Their communication is fantastic. We'd just like them to work faster and harder, and to provide a slicker service across the port for those ships that are arriving."

Mainfreight handles a lot of food, beverages and DIY products - all high demand products - but Braid said demand was high for all sorts of consumables. 

"Go and try buy a bike from a retailer at the moment, they'll ask you to wait till February or March to get that bike. I think the same for a car. I think if you wanted to pick a brand new car off the lot they might tell you to come back in March. 

"So it's across the board across all sorts of products and it's a combination of the effects of Covid, the manufacturing supply chain, the shipping and air freight supply chain, and the demand that we've got here.

"It's not just New Zealand, this is happening in all of the regions that we're in. In America, they've got a shortage of equipment trying to get the containers off the wharf.

"We'll be doing our utmost to make sure that all our customers get the products to store and ultimately the consumer gets what they've ordered. But of course you do have this pre-Christmas peak... and I think if there's a little bit of patience in terms of that supply chain the products are going to be available in the new year. And that patience might well help everybody to get their fair share. 

"I think there's no doubt that pre-Christmas it's been jammed into a smaller, shorter period. Normally we would build into Christmas from September through to December. But I think that this will definitely be congested up to and including Christmas. 

"After that, I think there's likely to be a good economy, consumer demand seems to be there for the new year. But it just won't be as congested and it won't be as urgent," he said. 

"I think one of the other things that's occurring, one of the trends we've seen is that there's more local product being bought versus imported product and that's got to be good for the New Zealand economy, and good food for New Zealand companies.

"We need you to have some demand and so do those retailers, it just might not be the exact product that you wanted."