New Zealand’s deepening supply chain crisis

The Mari­time Uni­on says New Zea­l­and is facing a deep­en­ing crisis in our mari­time sup­ply chain, which requires bold think­ing and speedy action to fix.

Mari­time Uni­on of New Zea­l­and Nation­al Sec­ret­ary Craig Har­ris­on says the glob­al COVID-19 pan­dem­ic exposed pre-exist­ing weak­nesses in our logist­ics sec­tor, and cre­ated enorm­ous prob­lems.

He says with a new wave of COVID-19 caus­ing major prob­lems over­seas, the out­look is not good.

Glob­al con­ges­tion has been com­plic­ated for New Zea­l­and due to our over-depend­ence on glob­al ship­ping oper­at­ors, he says.

Inter­na­tion­al ship­ping ser­vices were cur­rently dis­rup­ted, some port calls were being missed, freight costs had ris­en by unpre­ced­en­ted levels, and ship­pers could get more profits from con­cen­trat­ing on oth­er lar­ger mar­kets.

These issues would con­tin­ue into next year and bey­ond, says Mr Har­ris­on.

“A change in our approach is required and the time for change is now.”

Mr Har­ris­on says New Zea­l­and trans­port policy has been dom­in­ated by ‘leave it to the mar­ket’ ideo­logy, but the industry was abandon­ing those failed ideas in favour of more co-ordin­ated approach that pri­or­it­ized resi­li­ence and reli­ab­il­ity.

Chief exec­ut­ive of inter­na­tion­al ship­ping con­sultancy Sea Intel­li­gence Alan Murphy recently told media one “reas­on­able option” might be the con­sid­er­a­tion of a state owned New Zea­l­and ship­ping line to ensure sup­ply chain secur­ity.

In anoth­er new devel­op­ment, New Zea­l­and logist­ics oper­at­or Main­freight has been char­ter­ing ves­sels to move cargo inter­na­tion­ally, and Man­aging Dir­ect­or Don Braid has cri­ti­cised prof­it­eer­ing by glob­al ship­ping oper­at­ors.

Pres­id­ent of the Cus­toms Brokers and Freight For­ward­ers Fed­er­a­tion Chris Edwards has recently argued New Zea­l­and flagged coastal ship­ping has to be a “big part of the plan” to solve sup­ply chain prob­lems (NZ Ship­ping Gaz­ette, 22 May 2021).

Mr Har­ris­on says this con­ver­gence of views shows how New Zea­l­and needs to quickly rebuild our ship­ping cap­ab­il­ity.

He says New Zea­l­and flagged coastal ship­ping could assist by ensur­ing region­al ports had a reli­able ser­vice, which at the moment they lacked.

Coastal ship­ping could be built on by expand­ing New Zea­l­and flagged ship­ping ser­vices to Aus­tralia and the Pacific.

He says this would require changes to the Mari­time Trans­port Act, which cur­rently provided an unfair advant­age to glob­al ship­ping oper­at­ors.

“The key issue here is resi­li­ence. The threat to our exports and imports is due to being com­pletely reli­ant on glob­al oper­at­ors for whom New Zea­l­and is not a pri­or­ity.”

Mr Har­ris­on says oth­er bene­fits of New Zea­l­and ship­ping would include low car­bon emis­sions and secur­ity of our sup­ply chain in the event of nat­ur­al dis­asters such as flood­ing or earth­quakes, which put land trans­port out of action.