How are global shipping issues affecting exporters?Export & Market Access
Fast facts: The major issues facing Australian exporters
- Lack of equipment
- Frequently changing shipping schedules
- Increase in freight rate
- Port closures due to Covid cases
- Impact of delays on fruit quality
From the ongoing container issues and delays at the port of Auckland to the highly publicised Ever Given and port closures due to Covid or political unrest, the past 18 months has seen dramatic impacts on the global shipping network.
The Australian fresh produce export industry has not been immune. Although apples and pears currently make up a small export group, Justin Smith, APAL’s Industry Services and Export Manager, said the industry should be paying attention.
“Ongoing issues in this area could impact our ability to expand into overseas markets, which we know is important for industry growth,” Justin said.
“To maximise the chance of export success, forward planning into 2022 is going to be critical.”
Tim Nethersole, Sales Manager at Jeftomson, one of Australia’s pomefruit exporters, says the global impacts to the supply chain have continued throughout Covid-19, with no clear end in sight.
“Shipping companies have been saying it should settle down for the past 8 months now, but it has become increasingly difficult,” Tim said.
“Even once they solve the problem at one port, it happens at another, or a different shipping line has a different issue. Every single supply line is affected, and freight rates have risen across the board.”
Ongoing issues and a constantly evolving situation require even more management and follow-up on the part of exporters – but delays and uncertainties make planning difficult.
“Lack of containers and global repositioning of empty containers mean there are delays in being able to export after harvest,” Tim said.
“Frequently changing schedules lead to longer shipping times and increased quality issues, then some ports might be virtually shut due to Covid cases – for example, the port at Jakarta, one of our export destinations. One delay adds to another and it snowballs.”
Jeftomson have used Harvista™ and SmartFresh™ to help improve the longevity and freshness of produce over the past season.
“They’re tools, but they don’t fix the problem,” Tim said. “It’s a global problem, and there’s a lot of uncertainty right now.”
Australian exporters such as Jeftomson are directly impacted by problems facing Auckland.
“We’re having enormous difficulty getting shipping containers for NZ,” Tim said. “We’ve had a lot of delays in Auckland over the last 12 months – it’s a major destination for some of our exports, and it is en route to the US, where we trade quite a lot.”
An ongoing trend?
Andrew Hooke, APAL’s Chief Operating Officer, said this experience is indicative of the broader situation with shipping lines at present.
“This started very soon after the pandemic and was initially a result of ships been held due to crew members having Covid,” Andrew said.
“It was exacerbated by stockpiling containers, further worsened by the Suez crisis. Mid last year the commentary coming from shipping lines was that this would be corrected soon after Chinese New Year. At that point, the Jakarta to UK route was from US$2,000 to $3,200. In November 2020, the expectation was that it would increase to US$5,000 in December. Then, prices rose in February and hit a high of US$16,500 first week of July.
“If this is the ‘new normal’, then it will be challenging for many exporters. In some transport lanes, airfreight is now a better option.”