TL;DR:
- The shipping crisis, exacerbated by Houthi rebel attacks in the Red Sea and water shortages in the Panama Canal, is forcing ships to reroute, significantly delaying New Zealand exports to Europe.
- Silver Fern Farms reports substantial disruptions and additional costs, with no immediate solution in sight, as the crisis could persist for months or even years.
- The crisis has led to increased supply-chain costs and logistical challenges, including longer land and sea journeys for refrigerated containers.
The global shipping crisis, already strained by Houthi rebel activities in the Red Sea and water scarcity in the Panama Canal, is worsening, posing significant challenges for New Zealand exporters. The situation has compelled many vessels, laden with New Zealand produce destined for European markets, to opt for the longer journey around the Cape of Good Hope.
This detour adds approximately two weeks to the delivery schedules, impacting timely access to some of New Zealand’s key trading partners.
Silver Fern Farms, a major player affected by this crisis, has voiced its concerns through its GM of sales, Peter Robinson. The company has been informed that the disruptions, particularly in the Red Sea, could linger for an extended period, potentially spanning months or even years. This prolonged uncertainty is causing a ripple effect across the supply chain, with shipping companies passing on the costs of rerouting to exporters like Silver Fern Farms.
The crisis has also severely impacted the Middle East, with the primary port of entry into Saudi Arabia, Jeddah, becoming virtually inaccessible. As a result, ships are diverting to Dammam Port in the Persian Gulf, necessitating an additional inland journey of 1600 km to reach their final destinations. This not only increases the logistical burden but also adds significant costs for importers, who must then return the empty containers to Dammam Port.
In response to these challenges, Silver Fern Farms is closely monitoring the situation, particularly the timeliness and availability of refrigerated containers, which are critical for maintaining the quality of their exports during extended journeys. Despite managing container availability successfully so far, the company remains vigilant, given the ongoing disruptions.
Silver Fern Farms is committed to working with its global freight partner, Kotahi, to navigate through these turbulent times. The aim is to ensure that their products, produced with great care and effort, reach customers in the UK, Europe, and the Middle East without compromise.
This shipping crisis underscores the vulnerability of global trade routes to geopolitical tensions and environmental challenges. It highlights the need for robust contingency planning and the importance of international cooperation to mitigate the impacts on global supply chains.
