With the freight industry significantly impacted by the pandemic, many expats moving to New Zealand find escalating costs and ongoing delays a major headache as they organise getting personal effects shipped here.
To help us understand the situation, we asked the experts from NZ Vanlines to provide an update. Import Sales Manager Matthew Woodley explains what is happening, the reasons for increased costs and timeframes, as well as an outlook for the next 12 months.
1. Can you lay out the reasons why shipping is taking so much longer to get to NZ than it did prior to COVID?
We continue to face headwinds as the global shipping and supply chain crisis continues to play out with little sign of improvement in the vessel capacity and frequency. Increased freight volumes due to higher consumer demand for goods, significant port wait times, container and labour shortages along with substantial backlog of containers to either be emptied or transported have culminated in creating a “perfect storm” so to speak.
We have unprecedented demand for consumer goods and record e-commerce sales whilst on the supply side, the pandemic has resulted in an operational slow down throughout the entire supply chain.
Fundamentally the supply chain crisis was caused by backlogs across the major supply chain hubs. Unfortunately, the crisis is actually forecasted to get worse with many black swan events now in play too i.e. the war in Ukraine and the resurgence of Covid in China, with the Shanghai Port closure further impacting the delays.
The global supply chain crisis continues to plague the international moving industry and there are three primary contributing factors that remain an issue for international shipping, these are:
Container shortages: Of the 17 million containers currently in global circulation only around 6 million are available despite the fact that 70% of all cargo shipping freight is containerised.
Container imbalances: The pandemic has added further to the already existing imbalance.
Port Congestion and delays: Prior to the pandemic the ports were already under considerable strain due to the container shortages and imbalances. When combined with a surge in import/export volumes along with labour shortages this is a recipe for severe congestion and delays.
These three core issues are all intertwined and there is no “silver bullet” for the problems either. Other major factors at play which are further complicating issues include fluctuating freight rates, equipment shortages, hauler issues and driver shortages. As the global shipping industry works towards adjusting for these unprecedented issues, NZ Van Lines continues to work alongside our clients to navigate these issues to reduce their impact on our customers moving to New Zealand.
2. Why is it so much more expensive, and what is the average price increase compared to 2020?
Due to the global pandemic the freight rate increases over the past two years are unparalleled. We have never seen anything like this with some container freight rates as much as ten times higher than pre-pandemic rates. It really just boils down to supply and demand, with demand exceeding supply the shipping lines have been quick to seize the opportunity and, in the process, have produced record breaking profits. Most of the shipping lines servicing New Zealand have tripled the freight cost.
The issues outlined above are translating into further costs and delays for our clients. With the container shortages and limited vessel space, the major implication for our clients is that more often than not consignments are having to be cross loaded via our partners warehouse until we have been successful in securing a booking with the shipping lines.
Due to NZ Van Lines being a long-standing member of FIDI we have a large network of global partners available and can access the most competitive rates for our clients.
3. Why are we seeing prices increase after the initial quote, sometimes even when the shipment is en route to NZ?
The main issue is that container freight rates are based on the date when the container is actually shipped. With the vast majority of shipping lines no longer providing contract rates we have to rely on what is known as spot rates which is a one-time quote based on a particular sailing.
It’s also important to understand that spot rates come with no guarantees and can be the first to be rolled or dropped by the shipping lines depending on market conditions at the time of shipment. The shipping lines really are a law unto themselves!
NZ Van Lines leaves no stone unturned when it comes to navigating these freight rate increases and additional costs. We work closely alongside our clients to find the best solutions whilst trying to keep any unforeseen additional costs to a minimum.
4. How do you see the cost/time issues changing over the next 12 months and why?
We don’t see any signs of the freight costs reducing in the coming months as there remains a significant amount of uncertainty, delays, and disruption throughout the supply chain. Container freight prices are forecast to remain at around their current levels until at least 2023.
We remain hopeful that things will improve in the near future, and we return to a smoother sailing sooner rather than later, however the volume of customers moving to New Zealand is strong.
5. What's your advice for people needing to send household effects to NZ in the current environment?
The best advice for anyone looking to move to New Zealand is to start planning your move early, at least two months’ prior, and factor in potential delays. Maximise your carry-on luggage with the airlines to ensure you have the essentials you need when you arrive in New Zealand. You will also want to budget for potential freight rate increases and storage-in-transit costs whilst your consignment is awaiting a booking with the shipping line.
If you are awaiting a Visa it is critical to ensure careful timing for your move to minimise the time without your household goods.
6. What else do people need to know?
When planning an international removal, we recommend that you keep in mind the following tips:
Book in your move dates as early as possible – ideally two months in advance
Try to avoid changing dates and cancellations
The summer months are traditionally the busiest
Ensure you will be physically present in New Zealand when your shipment arrives
Budget for potential freight rate increases and additional costs
To find out more about moving to New Zealand visit: https://movingtonewzealand.com/
Mobile Relocation delivers resettlement and relocation programmes for businesses employing offshore talent. Our goal is to get your expat and migrant talent up and running in NZ as quickly as possible - reducing their time to effectiveness in their new role, and enabling them to deliver their skills and expertise to your the benefit of your business.
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
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