TODAY |

Kiwis could face paying more for consumer goods amid fallout from cargo backlogs

Empty shipping containers are piling up in depots, as the fallout from global cargo backlogs continue to disrupt the supply of goods. 

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The ongoing issues mean empty containers are piling up in depots. Source: 1 NEWS

By Corazon Miller

The unused containers are contributing to a global shortage of containers; and compounding the global supply chain which has all but ground to a halt since the start of the pandemic. 

The problem is reaching a critical stage and those working across the logistics network in New Zealand warn it will prove costly - for small businesses and for the consumer. 

As importers face higher charges to get their goods on shelves; smaller companies are at risk. 

Meanwhile, the cost for those working to stay afloat could see Kiwis paying more for goods in ships. 

At a yard in the South Auckland suburb of Wiri the backlog is sky high. ContainerCo. Managing director Ken Harris says the company is beyond capacity across the country. 

“We were certainly having to hold bookings down to a trickle last week,” he said. “We were having to delay the receipt of some containers by two to three weeks.” 

While things have improved, Harris says the yards are still working beyond their technical capacity. 

The containers are empty and ready for their next job. But, he says the logistics network is so clogged they are not being picked up. 

“What I think has caught everyone by surprise to start with, is the fact that everyone was expecting, due to Covid, that world trade would diminish,” he said. 

“But in fact, we have seen a big surge, and we haven’t been able to get them out, because the ports are somewhat overwhelmed.” 

Ships that already face lengthy delays as a result of congestion at port have little time, so they prioritise picking up containers ready for export over empties.  

The issue further fuelling congestion along the line. 

Ports of Auckland spokesperson Matt Ball said the build up at the empty depots were in turn having a knock-on effect at the ports. 

“I think no one really knows when things are going to go back to normal,” he said.

“Normally this time of year, things would start to quieten down. 

“But people are saying we could have high imports until Chinese New Year, and perhaps even April. Some are even saying through to the middle of the year. No one knows.” 

The Ports of Auckland has also had a staffing shortage, and a delayed automation projection adding to the backlog. 

It has hired locally and is working on bringing skilled operators from overseas to help - but says it takes time to train new staff.  

“We should have another crew on by February, but then it is a process of training our people,” he said. 

At the time of 1 NEWS’ visit to the port, there were four cranes working but Ball says they would have around six working at any given time. 

Meanwhile, competition for spots on ships is fierce. President of the Customs Brokers and Freight Forwarders Federation, Chris Edwards, said importers were having to pay a lot of money to get their goods on shore. 

“At the moment it is like an auction system on the vessels,” he said. “The ships are so full you are paying top dollar to get a slot on a ship to bring your container down.” 

The cost, he said, is hitting importers hard. 

“Anecdotally, for something from China they were charging $300 at the start of 2020. That finished at nearly $5000 at the end of last year. 

“There will be some importers thinking if it is worth still being an importer?” 

Edwards says it’s Kiwis who could end up meeting the cost.  

“You and I will be paying more at stores, at shelves, anything that is coming in containers. That price will increase naturally and that will increase inflation.” 

Experts are warning the backlog could continue for months.