Burnard Bulletin - April

Port Check

We have been advised that blank sailings may become more frequent in the coming weeks, driven by a potential equipment shortage linked to ongoing developments in the Middle East. Equipment repositioning efforts are being disrupted, with a number of containers delayed or held at ports across the region.

In addition, last-minute routing changes and extended transit times resulting from strait closures are further impacting the balance and availability of equipment across major trade lanes.

Europe and Asia. We are experiencing some delays in Europe due to the Iran-US lead war, transit times are being impacted accordingly. We encourage you to contact your Customer Care representative and place orders as early as possible to help anticipate and mitigate these delays.

Transhipment ports of Singapore and Port Klang. Transhipments are experiencing some delays, with Singapore having delays of 2-3 weeks. Vessels are being delayed with arrival into Singapore, which impacts the connection to New Zealand. Conversely, New Zealand export vessels are being delayed due to weather, which it is having an impact on arriving time and berthing in Singapore.

Keep an eye on your order tracking reports as we will always have the latest updated departure dates.

New Zealand Exports. We’re in the middle of peak export season now, with slim space available on most trade lanes until the middle of May. We can book the odd slot here and there, but nothing with significant volumes and no current space for out-of-gauge cargo.

Lyttelton Port continues to operate under capacity constraints, with shipping lines offering limited space from the southern hub. The port is actively prioritising key operational initiatives to address staffing challenges and maintain service levels.

The Middle East.

Cargo to and from the Middle East region, please talk with our Export or Sales teams for advice for alternative ports if applicable/available and pricing.

Tensions in the Middle East Impacting Global Supply Chains

As you may have guessed, the importing and exporting news this month is dominated by the situation in Iran and the surrounding impacts of it. The situation continues to shift, with periods of apparent de-escalation through proposed negotiations and ceasefires, followed by conflicting statements that create ongoing uncertainty. Followed yet again by more threats. At present, it remains difficult to predict with any confidence how events will unfold or end.

What is clear, however, is that during periods of instability shipping lines and airlines are actively factoring in heightened risk to their pricing structures, using every loophole in contracts to apply additional surcharges. Likewise, software companies (many we use are based in USA and Australia) are on elevated alert seeing increased targeted attacks against critical infrastructure, supply chains and enterprise environments.

Airfreight:

Most airlines have announced additional and/or increased fuel surcharges. In some instances, these have more than doubled. Qatar Airways still has an embargo with all cargo departing Auckland, Brisbane and Sydney and are not taking bookings until further notice. Hopefully once normality resumes with Middle Eastern carriers i.e. Emirates and Qatar, they will have capacity to move regular freight in and out of New Zealand again. Unfortunately, there is no indication of when “normal” operations will resume.

Airlines have introduced revised tariff structures, including the separation or addition of fuel surcharges that remain highly variable. In addition, increases to security and war risk surcharges are being implemented.

There is some congestion in the traditional hubs for long haul freight, for example, Singapore, Vancouver, Los Angeles. These are all reporting backlogs. Potentially taking a day or two to obtain space and booking acceptance.

From 1st April we expect to see the usual change of routes as the carriers prioritise the coming northern summer which may result in reduced service levels into New Zealand.

Ocean Carriers:

Carriers remain in the peak export season for the next couple of months. Maersk, Cosco and ONE have experienced delays and rolled bookings over the past month due to poor weather and Lyttelton Port being closed for several days.

In regard to importing, carriers are mitigating their risk by introducing a split in charges with an increased base tariff rate and floating component of BAF or FAF that is subject to change. In some cases, the FAF is higher than the actual freight rate.

We are starting to see announcements of Rate Restoration notifications come through with a quantum of USD$300-350/TEU from OOCL and MSC. Whether this increase sticks is to be seen.

Emergency Risk Surcharges (ERS) have already been introduced to offset rising fuel and operational costs and are likely to remain in place for the foreseeable future.

To top it off, we have seen delays and rolled bookings from various Chinese ports with the justifications being “capacity issues or overbooking”.

Meanwhile, any anticipated return to traditional routing via the Suez Canal and Red Sea has once again been deferred, as security concerns persist. Carriers from Europe are continuing to divert vessels via the longer route around the Cape of Good Hope, continuing to contribute to extended transit times.

Domestic Trucking:

With the disruption to the flow of refined fuel into New Zealand, petrol stations have been steadily increasing the price at the pump, with some stations reportedly charging over $4.00 per litre for 95 octane. Diesel prices have also surged, surpassing the price of 91 octane petrol to around $3.40 - $3.50 per litre.

The sudden spike has forced trucking companies across the board to urgently adjust their fuel factor percentage, with reviews maintained on a weekly basis. To date we have seen the fuel prices jump to as much as 40% on top of the usual transport prices. Inevitably this will have an impact on the cost of goods.

While the government remains optimistic about the current fuel supply pipeline, many industry commentators have expressed concern regarding the medium-term reliability of maintaining timely fuel supply should the Middle East conflict persist.

Jet Fuel:

The International Air Transport Association (IATA) warns jet fuel could take months to recover despite a potential Strait of Hormuz reopening. Speaking in Singapore, IATA Director General Willie Walsh said the bottleneck is no longer crude availability alone, but damage to refining capacity across the Middle East.

Walsh advised “If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be.”

He advised, while crude oil prices have eased on expectations of a ceasefire and the reopening of Hormuz, he cautioned that downstream fuel markets will take longer to stabilise due to structural constraints in refining.

The impact is uneven, with import dependant markets in Asia and Oceania among the most exposed.

Oriental Fruit Fly Zone Removed

The Oriental fruit fly, identified last month in the Auckland suburb of Papatoetoe increased to 4 specimens. In response, quarantine zones were extended, with increased trapping and inspection efforts placed underway to determine if other flies were present in the area.

The additional fruit flies were tested and were deemed to be genetically related to the original fly located on 25 Feb. Since 2nd March no new oriental fruit flies have been found and from 30 March, all movement controls were lifted and the response closed.

These events highlight the ongoing importance of robust biosecurity practices required across New Zealand businesses. Burnard International remains firmly committed to playing its part in protecting New Zealand’s pristine environment through strict compliance, proactive action, and continued vigilance.