September/October 2021 - Bay of Plenty Business News

September/October 2021 BAY OF PLENTY BUSINESS NEWS 5
No end in sight for shipping delays
The head of Port of
Tauranga is cautioning
that shipping delays
and problems are likely
to linger for many more
months as the global
struggle with covid
continues.
By RICHARD RENNIE
Leonard Sampson, Port of Tauranga
CEO said the greatest
impediment to smooth cargo
handling at the port in past months
has been the increase in ships failing
to keep to arrival schedules.
“Typically, we would have three
company services a week on the
Asia-Australia-New Zealand route,
and so that service required about six
vessels over a 49-day rotation.
“But at present that rotation is 63
days, with no more vessels coming
on. This equates to eight-to-nine less
sailings a year – over three companies
that is 24 less a year.”
Less container vessels
docking
But he said Port of Tauranga has
had 106 less container vessels dock
between October last year and July
this year, due to delays and scheduling
changes. “So capacity is down,
but the demand is still there.”
This has been accompanied by
a “very strong” July for container
demand, despite July typically being
the low point of the exporting season.
Globally shipping schedules have
reportedly fallen to all-time lows for
reliability, with New Zealand schedules
for most ports reported at only
five-to-six percent accuracy, compared
to historical averages of 80-90
percent.
POA delays
Sampson said limitations at the Port
of Auckland had also hampered Tauranga’s
ability to maintain container
flow, with some ships only partially
discharging cargo there, instead delivering
it to Tauranga and requiring it to
be trucked back to Auckland.
The particularly high number of
containers deposited on Port of Tauranga
land at present is due to lack of
storage space in Auckland.
Marty Verry, chief executive of
Rotorua timber processor Red Stag,
which exports to Asia, Africa, Australia,
Europe, and the US, said exporting
has been particularly problematic
in recent months.
“And it seems to be getting worse.
Maersk vessel: Working with Maersk, Kotahi has managed to
reduce congestion by adding additional capacity. Photo/Supplied.
The supply lines never got a chance
to disentangle and run smoothly last
year when Covid hit before the world
starting booming and demanding
more products, leading to a massive
increase in demand. This was led by
the United States.”
Major increases in the pipeline
While still on a contracted rate for
shipping, he anticipated some major
increases once the contract ended.
David Ross of Kotahi: high
levels of port congestion.
Photo/supplied.
The Baltic Dry Index, an indicator
of global shipping costs, has just hit
its highest level in a decade and more
than double what it was a year ago.
Shipments to Australia have
been particularly problematic, either
delayed, “bumped” or interrupted.
The delays were making filling
orders difficult, with customers often
forced to accept only partially complete
orders in a country also struggling
to source sufficient timber for
construction.
David Ross, chief executive of
freight company Kotahi said the
majority of American and European
ports are suffering from prolonged
berth delays and high levels of port
congestion.
Many ports throughout China are
also heavily congested and gridlock
every time Covid resurfaces there.
He said New Zealand’s shipping
schedules are lower than the global
average reliability of 39.1 percent.
“The Port of Auckland’s challenges
with port congestion and shipping
schedule reliability continues to
disrupt shipping schedules for New
Zealand ports.
“Their automation project has
been paused to try get ahead of these
challenges, however these conditions
are expected to last until mid-to-late
next year.”
He anticipated New Zealand
The world’s largest shipbuilder, China State
Shipbuilding Corp hit its 2021 annual target in
only six months this year, while demand for bulk
freighters has jumped 140 percent.”
would continue to see pinch points
on capacity to some regions over the
coming 12 months.
Working with Maersk, Kotahi has
managed to reduce congestion by
adding additional capacity.
Challenges in the system
Ross acknowledged that for exporters
of chilled products the current supply
chain conditions are a challenge.
“We work with our strategic partners
to ensure our customers’ chilled
products aren’t further delayed, by
focusing on what we can control such
as equipment supply, capacity availability
and ensuring their product gets
off the port and onto a vessel.
“Through the strength of our collaboration
with partners, we have
been able to keep our customers’
product moving, however it’s been
hard yards.”
Leonard Sampson said he did
not believe the congestion and delay
issues were a “this year, next year”
issue, something Marty Verry agreed
with.
“This may be something that is
likely to continue to be with us for the
next two to three years,” said Verry.
Sampson said capacity balance
was unlikely to be achieved until
either more ships were commissioned,
or the world returned to a
point where consumers spent more
on services like tourism, rather than
goods that require freight capacity.
The world’s largest shipbuilder,
China State Shipbuilding Corp hit its
2021 annual target in only six months
this year, while demand for bulk
freighters has jumped 140 percent.
Sampson said this came after
a record number of vessels were
reported anchored and idle only 14
months ago.
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