Page 14

Opinion: Kevin Jenkins

Stories from the frontline: One year on, supply chain issues still persist in New Zealand Kevin Jenkins, Founder of MartinJenkins talks to people on the ground about their supply chain issues. He speaks to business owners and leaders about supply shock and whether supply chains are still messy and disorganised. We’ve all been impressed at how fast a range of Covid-19 vaccines have been developed. It’s shown that while regulatory checks and balances are critical to good science and consumer wellbeing, they don’t have to involve long development times if a sense of urgency drives the work and enough money is made available. But distributing the vaccines may be another matter. It’s going to be vital that vaccine supply-chain problems are resolved quickly.

Broken links in global supply chains

bookings less than eight weeks out. There’s lots of uncertainty, with bookings changing regularly, and no guarantees they’ll be rolled over to the next sailing. Several months ago Rosemarie Dawson, CEO of the Customs Brokers and Freight Forwarders Federation (CBAFF), described how shipping companies had reduced capacity when China shut down due to Covid19 but were then hit by a surge in consumer demand (CBAFF release, 29 October 2020). Capacity was squeezed and some shippers began bypassing New Zealand.

materials. Another friend employs several hundred people in Auckland manufacturing products for the building industry, and they rely on imported materials like polished stone. He told me the following story – which he said was typical: “A ship arrived at the Port of Auckland where Covid-related issues are exacerbated by the port’s automation project. The ship sat in the Gulf for a week then decided to sail to Tauranga, where our materials were unloaded. However, they took another week to arrive at our factory back in Auckland. Meantime our customers are angry because their product is late, and even worse we haven’t been able to give them any updates.”

The shipping companies are also charging him detention Supply-chain problems have More recently, Rosemarie was fees, adding more costs to his become high-profile recently – quoted saying firms are being operation. Meanwhile he says his appliances taking months to arrive charged “detention fees” – $8,000 export business to Australia is for example. in one example – when they failed “dead” because freight rates have to return empty containers on time, doubled or tripled and are no longer I wrote about some early supplydespite there being no room for them economic. chain issues in the NZ Herald nearly a year ago (“Feed the backs”, 26 April to be dropped off at the shippers’ At the other end of the supply 2020), sharing stories from a group of storage facilities (Radio NZ, 23 chain is the product my Auckland us in business who banded together February). manufacturing mate has in Sweden for mutual support in the depths of Sometimes these extra costs waiting to be shipped here: the the Level 4 Lockdown. I checked in will be passed on to consumers suppliers can’t get containers for a with some of my mates recently to in higher prices, while sometimes few more weeks, holding up work see what has changed. they will put firms at risk by in his factory. He told me: “This is a global phenomenon where you They told me things have gotten forcing them to absorb ruinous loss of margins. Firms are also can’t get containers going in the right worse in some areas. For example, incurring extra costs from having to directions anymore. Global freight in-bound freight into Tauranga has arrangements are messed up.” ramped up, creating congestion, and hold backup stock, manage multiple suppliers, or manufacture inputs longer delays in getting containers It’s frustrating for him: railed to Auckland’s inland MetroPort. onshore. there’s high demand from the The uplift of containers from construction industry, but supply MetroPort is also taking longer – 14 Stories from the frontline side problems prevent him days isn’t unusual. A property developer mate of meeting it. He sees this driving mine in Auckland recently grumbled a slowdown across the economy As for exports, rail transit times to me about how it’s getting harder this year. have increased significantly. Some and harder to source stainless shipping lines now won’t take steel screws and other key building 14 | KiaOra India | Mar 2021INZBC.ORG

Profile for INZBC

KIA ORA INDIA | VOL 3 ISSUE 01 | MAR 2021  

KiaOra India is a quarterly trade magazine, published by the India New Zealand Business Council. This magazine is published every quarter an...

KIA ORA INDIA | VOL 3 ISSUE 01 | MAR 2021  

KiaOra India is a quarterly trade magazine, published by the India New Zealand Business Council. This magazine is published every quarter an...

Profile for inzbc
Advertisement

Recommendations could not be loaded

Recommendations could not be loaded

Recommendations could not be loaded

Recommendations could not be loaded