Relocating household effects is an important task for most expats and returning Kiwis moving to New Zealand. It’s a complex and costly exercise in normal times, but COVID has significantly disrupted international shipping.
Extra charges and delays are now frequent occurrences for our clients, so we asked shipping expert, Matthew Woodley from NZ Vanlines to explain what’s happening and we’ve pulled together some tips to make the best of the situation.
Why is international shipping so disrupted and delayed?
In simple terms, this comes down to demand for shipping services outstripping supply.
This has been further compounded by the global shortage of containers (consumer goods producers have been given priority) which has made securing bookings incredibly difficult and requiring much longer lead times. There are more than 17 million containers currently in circulation globally but only 6 million are made available for cargo despite 70% of all cargo shipping being containerized.
The pandemic has further compounded this by creating an unexpected export decline subsequently followed by a large export rush putting further pressure on the supply.
Shipping lines also haven’t helped by reducing, and outright cancelling, sailings (known as a “blank” sailing) on the wrong assumption that demand would decline.
Subsequently, port congestion and delays were created from this surge which has placed immense strain on ports already suffering from labour shortages as a result of the pandemic.
What makes it so expensive to ship my personal effects to New Zealand?
The huge demand for shipping relative to supply has resulted in significant freight rate hikes by the container shipping lines that moving companies depend on to transport your household goods - the global average price has increased 3.5 times in the last year.
These factors have combined to essentially create a perfect storm. Container shipping lines are currently on track for annual profit of US$80 billion and are really the only winners from this crisis.
Unfortunately, freight rates are forecasted to remain high for at least the next two years too, so it could be sometime before it’s smooth sailing again.
Why is it worse for New Zealand?
Locally we’re seeing the full effects of the global shipping crisis play out with severe port congestion creating major supply chain disruptions. There are currently around 19 container vessels anchored outside Tauranga Harbour and KiwiRail has had to put on additional services to transport containers from Tauranga up to Auckland.
Ports of Auckland isn’t faring much better with significant congestion levels and reduced capacity. Auckland has imposed a US$200 per TEU (Twenty-foot Equivalent Unit) congestion surcharge which has prompted some shippers to ship via Tauranga but there is currently a delay of 28 days for containers to be railed up to Auckland.
Some shipping lines are now omitting Auckland completely. Hapag-Lloyd, Maersk, Hamburg Süd and MSC have removed Auckland from their US East Coast service offering.
What can I do?
Here are tips from the Mobile team, based on the experience of our clients, coping with shipping in the COVID era.
Adjust your expectations about shipping delays. Realistically your shipment will probably not arrive on its target date due to factors beyond anyone’s control. Accept this, and then focus on the management strategies outlined below.
Prioritise where it is most important to have your possessions - your country of departure or your destination. Then time your shipment accordingly. For example, some canny Mobile clients packed up their house and got their shipment on the water 2 months before leaving the US as they wanted to get their home set up in NZ as soon as possible.
Build flexibility into your budget for shipping cost overruns. And be ruthless in sorting out what you need, rather than want, to ship to minimise the initial cost. If your employer is paying, negotiate an all-inclusive shipping budget rather than a fixed sum of money.
Consider whether purchasing furniture and household effects in New Zealand may be more cost and time-effective than shipping. We work with our clients to help them obtain pricing to evaluate this option.
Make contingency plans for furniture etc. To minimise disruption many of our clients want to secure long-term rental properties so we’ve worked with them on temporary solutions while shipping arrives - from furniture rental to ‘camping’ with air mattresses and camp tables (useful for future holidays!) to thrift store and TradeMe finds.
Concentrate on what you can control, rather than tracking your ship minute by minute as it crawls across the ocean to NZ! Once your container is packed it’s in the hands of the shipper. Let them do their job as you can’t influence shipping delays caused by COVID-closed ports, ship diversions etc. Know that it will eventually get to you and try to focus on the excitement of arriving in New Zealand.
Mobile Relocation connects you with what you need to thrive in New Zealand. Contact us today to talk about how we can carry your relocation burden.
Bridget is a New Zealander who has lived and worked as a diplomat in Singapore and India. After experiencing all facets of the relocation experience, she founded Mobile to work with private individuals moving to NZ and leading local and international businesses bringing in offshore talent. bridget@mobile-relocation.com
Ready to move to New Zealand? Get our FREE Move to NZ Checklist here.