21 Feb 2022

Cargo delays force New Zealand exporters to charter private ships

12:46 pm on 21 February 2022

Lengthy cargo delays have forced New Zealand's key exporters to charter private ships to ferry meat and produce to foreign markets.

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Photo: Mark De Lautour

Meat company AFFCO has chartered its third ship to get exports valued at $120 million to overseas ports.

Half the space in the first export vessel chartered was taken up by pip fruit exporters.

AFFCO head of sales and marketing Mark de Lautour told Nine to Noon he expects the cargo disruptions will continue for three more years.

"Certainly that's the period of time we're planning for and even should container services start improving and availability of space improve and cost come down, likewise we would probably see the bulk carrier charter rates come down proportionately."

He said about a year ago demand on the shipping lines started to increase with volumes going up every month.

"The first problem we saw was demand on the shipping lines was increasing, but at the same time we were also starting to see the first creaks and groans in the key logistics areas like ports, trucking, warehousing, like a lot of the labour shortages around those areas."

De Lautour said chartering private cargo ships is not a cost saving but ensures produce gets to market.

Turners and Growers logistics manager Simon Beale, who also chairs the council of cargo owners, told Nine to Noon the situation has been quite tough.

"Since Covid hit, well in that year we decided to start getting back into charters because we'd out of them for about five or six years," he said.

"Two years ago when Covid hit and we saw ports around the world tightening up and closing down and restricted with staff and trucking we got a vessel in for Europe and last year we jumped in as well and got four vessels arranged."

Beale said cooperating with AFFCO to share a shipping vessel worked out well since it allowed them both to utilise space to markets where they exported limited volumes.

He said it is very difficult to get chartered container ships these days because many had been scrapped and only a few new builds have come on board.

Beale said because of the increased demand pricing for charter ships has increased.

The worst market to get to is currently the west coast of the United States with ships sitting off Long Beach for up to 40 days before they can get a berth, Beale said.

He said that means what used to be a two week transit now takes about 60 days.

De Lautour said China's ports have generally held up well because they have reacted very quickly to any Covid outbreaks.

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