A container ship manoeuvring around Auckland harbour (Getty Images)

Christmas crunch coming for retailers as ports experience massive backlogs

Critical capacity issues at ports around New Zealand are making retailers worried that they won’t be able to import stock ahead of the Christmas rush. Alex Braae reports. 

Traffic jams of container ships are building up around Auckland’s port, and retailers are concerned they won’t get imported stock in time to sell it for Christmas. 

The issues causing the delay are a perfect storm, including Covid-19, an automation project that had to be halted partway through due to lockdown, and a massive backlog in demand which shows no signs of abating. Many retailers held off on ordering new stock during lockdown because of uncertain conditions, but then retail boomed immediately after the restrictions were lifted. 

Simon Sheterline, the director of mattress retailer Winkl, said getting space on shipping lines out of China is at a premium right now, pushing prices up. But the congestion at the ports is also making him worried that his mattresses won’t arrive in time for “the most important part of the year” for sales. 

“Boats are currently sitting off Whangapāraoa with containers on them, waiting to get through Auckland Port.” Sheterline said there are rumours currently circulating in the furniture import industry that boats might get turned back to China, “because the boats need to be utilised, and can’t be sitting in New Zealand waters for a long period of time.” 

There’s no clear way for stock to be redirected, said Sheterline. “All of our stock is currently tied up on those boats sitting off Whangapāraoa, so we’re just fingers crossed that the boat doesn’t decide to go back to China because it can’t unload.” 

“But at the same time we’re being told there’s no way to redirect our stock through any other ports around the country, because Tauranga and Christchurch are refusing to take bookings on ships direct to those ports until after Christmas, because they’re also congested. 

“So it’s really leaving us in a position where if that stock does go back to China, we won’t be able to book another boat to bring it back, and we won’t be able to airfreight it, because there’s no space on airfreight at the moment.” 

Ports of Auckland head of communications Matt Ball poured cold water on the idea that ships would be turned around, but conceded that many vessels are sitting at anchor for much longer at the moment than they normally would be. 

“We have had ships that have been at anchor for up to six days, maybe in a couple of days longer than that, but no, not turning back to China, I haven’t heard that.” He said that length of time was “highly unusual”, but other ports were also seeing ships sitting and waiting offshore. 

Ports of Auckland was part of the way through rolling out an automation process when Covid hit, and work on it had to stop. The development had been planned to coincide with the quietest part of the year, but that fell right in the middle of lockdown. The terminal is now split in half, with one half running automated systems, and the other manual.

“We had deliberately chosen the quietest time of year to do that switch, so we could really test things out, so that if something went wrong we could use the manual part of the terminal,” said Ball.  

“By the time we got everything going again, levels of imports had picked up again, and we were under the hammer. So that meant we’re actually going to be running with a split terminal for much longer than we initially hoped.” 

The two-terminal setup is just one of the issues slowing down the port right now. New processes around staff safety relating to Covid have also cut into work hours. The port is currently looking to hire dozens of new stevedores to increase capacity. 

And shipping is more generally an industry that is always subject to forced changes in plans. That can be as simple as the weather playing havoc with schedules. Ball estimated that in a normal year, about half of all ships would arrive in port late, but this year various factors in the global supply chain meant it was more like 70%. 

In terms of New Zealand’s overall capacity, Auckland doesn’t currently have the ability to manage delayed schedules like it normally would. 

“In past years, ships have come in here, dropped everything that they’re meant to be taking to Lyttelton for example, then leave it here for another ship to pick up, and they’d be able to leave early and catch up on their schedule. This year they haven’t been able to do it.”  

Rosemarie Dawson, CEO of the Customs Brokers and Freight Forwarders Federation, said the problems are global, and that limitations would be at a critical level for the rest of the year.

“There has been a worldwide surge in consumer demand. Shipping companies did not anticipate this and significantly restricted capacity due to the fall in demand when China effectively shut down due to Covid-19. Lines are now at capacity, so it is very difficult to get space on ships coming out of China.”

Simon Sheterline said he understands how difficult and disrupted the situation is right now, and that the ports have ended up under the pump. “But the communication is not there. The only communication you get as a business owner is that your shipment has been delayed, and then the ports will give you a time for its release, and then they’re pushing that out again.” 

“There’s not a lot of information coming out, when I’d think they would have seen this coming, and what information that is coming out is very unreliable, which makes it very difficult from a business perspective.” 

Ball said daily updates are being provided to all stakeholders about the progress of cargo, noting that it’s important that the port is honest with importers about how tough things are right now.

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