Ports of Auckland: ‘The global supply chain is stuffed’

Major supply chain issues caused by delays at ports nationally and globally are hampering retailers’ efforts to stock up as consumers pick up their spending.

Retail NZ said the issues were affecting most products that come in from overseas, including hardware, homeware, fashion, footwear and appliances – and customers are starting to notice gaps on shelves which could drive up prices.

The situation is also hitting the trades sector with some materials in short supply as bottlenecks at ports around the world intensify with a Ports of Auckland spokesman saying the “global supply chain is stuffed”.

Ports of Auckland has come under fire again over its operational issues as ships continue to wait at anchorage for up to two weeks.

But the Port responded by saying even if it fixed those problems tomorrow, Covid had congested ports worldwide and shipping company MSC had just announced a US$1500 surcharge on refrigerated containers being carried from New Zealand and Australia to Dalian, China – which would impact exporters.

Retail NZ chief executive Greg Harford said from a consumer point of view, some products were not available, and there were delays in getting other products.

”Retailers are needing to work hard to keep shelves stocked, but people are starting to see gaps in some stores.”

Harford said he had heard reports of ships waiting up to two weeks to be unloaded in Auckland which was leading to increased costs.

”We need to get goods moving quickly through the ports as an urgent priority.”

But the retail sector has been more resilient than expected.

”We think that total spending since March 2020 has been about 5.7 per cent ahead of the same period since March 2019.”

Master Plumbers chief executive Greg Wallace said he was aware of suppliers who had containers on the wharf ”but all of that stock is sold”.

He said post-Covid there was a lot of doom and gloom so suppliers reduced orders due to the predicted decline.

But consequently ”the construction industry continued to thrive” and while he believed stock would not run out customers might have to compromise on their choices.

”Potentially they are going to have to change their selections for things like tapware and basins. Meanwhile, plumbers and tradesmen are having to change pipe systems until the stock arrives.”

Most of the goods came in from Asia, and Wallace said another hurdle was the Chinese New Year closedown that would make catching up difficult.

These issues compounded with ongoing problems at Ports of Auckland could drive prices up for customers, he said.

Master Builders Association Tauranga president Todd Grey said the building industry had come out of Covid busier than ever.

He was aware of delays in whiteware in new builds and said people were booking goods well in advance which could clog the system.

”My plumbing merchant is ordering a lot of our gear early and I know others are doing the same.”

PlaceMakers said in a written statement it recommended customers plan ahead for their building product requirements, as supply chain challenges combined with high demand is putting pressure on the availability of some products.

Fletcher Building chief executive Brian McEwen said many industries in New Zealand were experiencing supply chain and freight issues due to shortages and delays in shipping capacity, container availability and port space.

High demand has also put pressure on some products which have imported elements like bathroom vanities.

”We are communicating with our customers, encouraging them to plan their product requirements ahead of time and we are working closely with suppliers to increase inventory levels or find appropriate product substitutes.”

Fonterra Global Supply Chain director Gordon Carlyle said the vast majority of its products made in the North Island leaves through the Port of Tauranga.

”That’s about 1.4 million metric tonnes every year.”

Fonterra’s relationship with freight and logistics company Kotahi and Maersk Lines wasproving hugely valuable in managing this disruption.

He said it was hard yards but they had been managing the current situation for a number of months and continue to operate at close to 99 per cent container availability with good access to vessel space.

Port of Tauranga chief executive Mark Cairns acknowledged Covid had presented overseas challenges but, in his view, Ports of Auckland ”need to resolve their operational issues”.

Cairns said he understood more than half of the eight cranes at Ports of Auckland were not being utilised which had major impacts on other ports around New Zealand.

”They need to own it and do their part and get those eight cranes working or else the New Zealand supply chain is not going to sort itself out,” he said, expressing his view.

He said although the Port of Tauranga would continue to do its bit it could not accept every ship that wanted to bypass Auckland because of delays.

”We don’t want to say yes to all these vessels and congest our own terminal so we can’t handle our own export clients.We are coming into our peak export season and those exporters need to get their goods to market.”

Dairy and agriculture was just one example of its major exporters, he said.

By Cairns’ estimation, about 15,000 extra containers had been discharged in Tauranga and railed through to Auckland in the past six months.

Ports of Auckland general manager of communications Matt Ball said it had made progress with recruiting new staff and that was starting to help ”but the global supply chain is stuffed”.

”We are working on our staffing shortage and have recruited an extra crane crew. We are training more staff and we are working to bring in skilled crane operators from overseas in March.”

He said the Auckland port acknowledged its issues and ”we have always acknowledged that” and up to four cranes at a time were working.

”People are having trouble getting goods because of problems right around the world in both the freight supply chain and in manufacturing and their supply chains, not just because of problems in Auckland.

”We can fix our own problems, not the problems globally.”

There was still a shortage of truck drivers and off-port empty container depots are full.

”The NZ supply chain downstream from ports is at capacity. Post-Christmas our terminal is full because the supply chain downstream from the port can’t get containers off quickly enough.”

He said there were delays inSingapore/Pelepas and Asia, USA and Australia -which was dealing with strike action – ranging from two days to two weeks.

”No one can accurately forecast how long this situation is going to last. It depends on how long it takes for the world to vaccinate and recover from Covid.”

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