CILT Friday Factsheet 1
Background
It is evident that uncertainty exists in the supply chain during this current crisis. This can be reduced by information flowing between the links, providing warning and reassurance.
When we hear some relevant supply – chain information, we will produce a Friday Factsheet for members.
| Air NZ – a great comment from Jacinda Ardern | It was great to hear a comment from Jacinda Ardern today that gave me the impression that she is listening to someone from our sector …. She said that “ …part of the reason for making a loan available to keep Air NZ alive is to maintain a level of air freight capability. As China and the rest of the world recovers, this will be critical to us”. |
| Mainfreight – offices in China | As we understand it, all 17 Mainfreight offices in China have re-opened and are available for business. |
| Sea-going transport | Ports Ports remain open and at regular capacity for containers. Ship visits are projected to fall away. The loss of cruise ships has had an impact, when these were halted last week in an effort to limit the spread of the virus in New Zealand. The log trade has also slowed, with decreased demand from China and an increase in competition from forests in Russia and the US. Shipping Companies The transportation of export goods is being maintained both domestically and internationally at near-normal levels of service for now. However, import bookings have dropped sharply. Cars have not been impacted yet. Outward bookings are projected to be normal for the next two months, however, the situation remains fluid on the import side. Log bookings have also dropped. Container Parks Container Parks remain open and at regular capacity. However empty containers are currently in short supply. The first factor is holds placed on ships returning to China, which were delayed when the outbreak there was at its peak. This has continued into this month. The second factor is the slow-down in the production of new containers coming out of China. This has corresponded with an increase in demand from exporters. |
| Road-based carriers | Heavy Transport Heavy transport has challenges. Log transport has seen redundancies alongside its associated businesses. Transporters report falls in luxury goods like wine, but cars still moving for now. Some redundancies in the general freight sector have eased the driver shortage. Retail Currently, the domestic supply chain is coping with the surge in demand caused by heavy short-term purchasing (‘panic buying’) however significant effort is being expended in re-stocking especially supermarkets. Retailers are attempting to cover short term staff issues from surplus labour from the hospitality sector. |
| Air-based carriers | Airlines Airlines have seen major, public impacts from COVID-19. Airline travel internationally has been cut significantly. This has had a flow-on impact on domestic travel, which has also fallen sharply. Roughly 30% of Air New Zealand’s staff is projected to be made redundant. This is already having a flow-on effect on workers in affiliated support services. Airports Airports are currently also suffering major impacts from COVID-19. Foot traffic has plummeted, reducing the retail take in terminals. Airfreight continues but demand is falling. |
| Government responses | Biosecurity NZ has withdrawn from Japan. All visa processing centers have been closed. International borders have been closed. A major economic stimulus package has been announced, but is unlikely to halt the onset of a recession. The OCR has been cut to .25% for the next 12 months in an attempt to stimulate the market and inspire confidence. |
More information please…
Most of this information was provided to CILT through speaking to our members; if you have anything to add or corrections, please contact Margaret Harris CILT NZ Vice President. Margaret.harris@containerco.co.nz. Please provide any relevant information for circulation that you can.
Our friends at Massey University want our help with a survey for which they will share the results….. must be completed by this Sunday please: https://massey.au1.qualtrics.com/jfe/form/SV_d0Tvsdnwyrtu8jH
Stay safe.
Keith Robinson CILT NZ President 20th March 2020