Supply chain pressure adds to Christmas stress

4 MinutesBy NZ Trucking magazineNovember 19, 2020

It may not matter if you were naughty or nice this year – though the opportunities to be naughty would have been limited – as Santa may not be able to fulfil your Christmas present wishes.

Even those well-organised people who have already started Christmas shopping might find they can‘t source the presents they want for under the tree if those products are coming from overseas.

The impacts of Covid-19 are wreaking havoc on global supply chains and New Zealand, being a long way from anywhere else and without the buying might of the bigger markets like Europe and the USA, is in danger of being left out in the cold.

I have been reading for weeks commentaries about global supply chains being near breaking point and containers being in short supply, and hearing in New Zealand that there are serious issues as shipping lines cancel sailings here to service more lucrative routes.

The nature of our export driven economy is if nothing is coming in, it‘s going to make it hard for those wanting to send out the primary products and goods we sell around the world. While some companies can charter their own ships, not all our exporters are in that position.

Imports and exports come and go by sea and air, but with our border closed by the government, there are only about one-sixth of the previous international flights servicing New Zealand.

Paying passengers are a trickle, and they used to subsidise the cost of freight on planes – the perishable goods like our seafood, flowers, and fruit. Air freight is significantly reduced and considerably more expensive. It is currently heavily subsidised by the government, but that can‘t go on forever.

Road freight is a critical part of the global supply chain, and for our part, if imports and exports can‘t come into the country or get out, our industry will take a hit.

We believe there are solutions and that those in the supply chain are better to find them than government, which doesn‘t seem to have a good grasp on the urgency of this issue, or how it will impact the country.

The government can talk all they like about New Zealanders taking jobs and making things here, but that just isn‘t going to happen at the pace required to meet market demands.

Also, much of our trading arrangements require that we take imported goods so that we can export goods – give and take.

We have asked the government to urgently turn its attention to the supply chain, but we are not holding our breath. We have real concerns that without that understanding of the supply chain, we will be in the same position with any potential Covid-19 vaccines that we were with distribution of the flu vaccines earlier this year. Government pushed for people to get vaccinated but then found its own distribution network couldn‘t match the demand. It is estimated flu kills about 500 people a year in New Zealand, which is about two percent of all deaths.

We suggest you be patient and creative with your Christmas shopping, and expect prices to reflect the stress on the supply chain. And don‘t bank on Santa making it here – our border is closed after all.

By Nick Leggett, CEO, Road Transport Forum