News & Thinking
An update: Exports and imports to/from key markets
New Zealand Trade and Enterprise (NZTE) has set up an excellent website gathering the latest updates from its international teams on COVID-19 in key markets and other information for exporters. The site was focussed on China, but now includes data on many other export destinations and says:
“While the Government is not aware of any formal restrictions on market access for goods exports and imports as a result of COVID-19, the pandemic is disrupting trade flows and the wider international economy. Proactive and daily communication with your logistic and insurance providers is essential as the situation is changing quickly.”
Our understanding is that China is recovering and is open for business again, but issues remain:
- Ports (sea and air) are open, but there are operational delays affecting imports in and exports out of China due to ongoing staff shortages.
- Trucking is severely disrupted due to driver shortages and restrictions on both vehicle movements (the highways in some parts of China are closed) and labour movements. Where transport is available, the cost has increased significantly.
- There are no changes to the regulatory settings for trade with China. No additional sanitary or phytosanitary requirements have been imposed due to Covid-19 and MPI says officials in China have confirmed that there are no changes to their customs and import clearance procedures.
- The backlog created by China’s shutdown and ongoing road transport disruptions are having a particularly severe impact on the movement of refrigerated containers (reefers) because ports only have a finite number of reefer plug in points and low availability of cold storage facilities.
We understand that reefers in transit to China may be re-routed for transhipment, discharged at alternative ports or returned to port of origin – in each case possibly without notice. Some shipping companies have introduced a congestion tax for reefer transport to China of between US$1,000 and US$1,250 per box. We expect similar issues to be encountered in other countries now experiencing severe quarantine or lockdown measures.
ExportNZ executive director Catherine Beard notes reports of:
- some freight-forwarders having their cargoes “bumped”;
- a global imbalance having developed in container flows; and
- in at least one instance, an airfreighted consignment of health products apparently costing a locally-based shipper four-times the normal rate.
“As [the virus] has spread to the United States, Europe and other countries, I guess what you are seeing are the same problems we initially saw with China – they’ve just gone elsewhere.”
New Zealand Council of Cargo Owners chairperson Simon Beale was quoted in this week’s Shipping Gazette shippers as being concerned about the potential for continued blank sailings as other countries locked down their borders and therefore reduced exports to New Zealand.
We recommend checking NZTE’s website for updates and talking to your forwarder and for forwarders to keep abreast of the latest shipping line press releases and keep their customers informed of costs and workaround options.