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Josh Tan: Export NZ executive director on Red Sea tensions driving up costs for Kiwi exporters · Best of Business

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  Speaker 2: Okay, now here's I won't call it doom and gloom,
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  Speaker 2: but it is certainly a concern. Shipping costs are going
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  Speaker 2: up again just as we just as we start turning
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  Speaker 2: the corner and the fight against inflation, one of those
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  Speaker 2: supply costs starts going up again. According to m FAT,
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  Speaker 2: global shipping rates have nearly doubled since April. Hootie attacks
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  Speaker 2: in the Red Sea are cited as a major problem.
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  Speaker 2: Shipping traffic in the Suez Canal is down fifty percent,
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  Speaker 2: and there's been what a drought in the Panama Canal
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  Speaker 2: as well. Awesome. Joshua tan As executive director for Export
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  Speaker 2: New Zealand and joins me. Now, hello, Joshua, Hey Andrew.
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  Speaker 2: Is this bad for our exporters like it was last time?
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  Speaker 1: Yeah?
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  Speaker 3: Look, I think it's not as bad as last time. Obviously,
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  Speaker 3: As you said, shipping rates have doubled nearly the BOOD
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  Speaker 3: since April. Intonacosts in cred the sense of at the moment,
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  Speaker 3: you know, and reacting to events around the world in
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  Speaker 3: real time. But what we've seen is that it's possibly,
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  Speaker 3: it's probably unlikely that costs increase to the same level
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  Speaker 3: that we saw during the pandemic, but it's not impossible.
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  Speaker 2: Is it bad for importers and is it bad for
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  Speaker 2: domestic inflation?
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  Speaker 3: Certainly? You know, in terms of domestic inflation, importers face
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  Speaker 3: the same issues as exporters do when it comes to shipping.
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  Speaker 3: You know, it's things like shipping delays, cost at a
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  Speaker 3: sorry time, delays at different ports, and also things like
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  Speaker 3: in insurance as well, which really drive up those those
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  Speaker 3: costs for importans and exporters.
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  Speaker 2: Whenever people talk about inflation getting better and better, they say,
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  Speaker 2: you know that is as long as there were no
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  Speaker 2: external shocks. Would this qualify as an external shock?
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  Speaker 3: Absolutely, Look, you know we're impacted by what is happening
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  Speaker 3: around the world, so certainly qualify us.
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  Speaker 2: So how much longer could the shot go on and
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  Speaker 2: or more importantly could it it worse?
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  Speaker 3: Look, it's really hard to tell at this point obviously.
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  Speaker 3: You know, as I said before, it's impacted by what
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  Speaker 3: is happening in a major shipping route, and it really
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  Speaker 3: depends on how long those issues an potentially last.
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  Speaker 2: For It's amazing how dependent. The world is on a
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  Speaker 2: couple of canals. We've got the siue As and then
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  Speaker 2: between North America and South America we've got the Panama,
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  Speaker 2: and the Panama is having problems as well. Are they
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  Speaker 2: free of problems right now?
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  Speaker 1: Yeah?
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  Speaker 3: Look, some finding some good news. So an updated on
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  Speaker 3: the Panama Canal is that the drought has ease there
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  Speaker 3: and that there are ancreased traffic was compared to earlier
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  Speaker 3: this year. So what we understand is that route is
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  Speaker 3: actually back to normal.
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  Speaker 2: Are there any other alternatives when these routes, particularly the
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  Speaker 2: Suez which is in a hot spot, do we have
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  Speaker 2: any other alternatives that we can explore? Could there be
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  Speaker 2: other ways of doing this? Because we are being held
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  Speaker 2: hostage by some who some hooties.
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  Speaker 3: Look, that's a really good question. At the moment, there
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  Speaker 3: is a workaround to this issue. Instead of ships going
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  Speaker 3: through the red seat in the Sewerz Canal, they're instead
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  Speaker 3: re routing cargo ships around the Cape of Good Hope
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  Speaker 3: in South Africa. Now, this as typically around ten to
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  Speaker 3: twelve days to tripspoet Singapore in Europe. But look, at
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  Speaker 3: least you're getting ships visiting different ports, all right.
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  Speaker 2: Josh Chan I think you for your time today, Export
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  Speaker 2: New Zealand executive director. How is this affecting business? I'll
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  Speaker 2: tell you. Sara McCormick is the chief executive of a
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  Speaker 2: fresh fruit exported by the name of Tomato Exports, and
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  Speaker 2: she says getting apples to Europe is very difficult. They
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  Speaker 2: have to ship around Africa to get it there. It's
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  Speaker 2: a very long transit time for apples and more expensive
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  Speaker 2: as well. It's been a bit challenging. We've got Sirma
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  Speaker 2: Karapeva from the Meat Industry Association saying that ship and costs,
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  Speaker 2: we're hitting meat companies in the pocket. It's the geopolitical uncertainty,
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  Speaker 2: the Panama now the Suez Canal. It's just additional complexity
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  Speaker 2: and cost. He says. It's not anything we can control directly,
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  Speaker 2: but it's certainly something that the companies are very mindful of.
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  Speaker 2: It's taking the bite off the profit line. It's making
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  Speaker 2: imports and exports more expensive.
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