MFAT Report: International Supply Chains

Last update: 13 October 2020

To ensure that New Zealand’s global supply chain linkages continue to function throughout the COVID-19 pandemic, MFAT’s network of Posts is monitoring the operation of international sea and air ports and domestic logistics. This report provides a snapshot of how international supply chains are functioning, significant international actions supporting supply chains, and other issues of interest to New Zealand firms engaged in trade.

This Report will be updated on a monthly basis. 

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International Developments

  • Statistics New Zealand reported that a fall in imports of nearly $1 billion in August led to the largest annual trade surplus since 2014. The $1.3 billion annual goods trade surplus was the result of a rise in exports, particularly of kiwifruit and dairy products, and a decline in imports during the national lockdown, notably of crude oil, cars and other vehicles.
  • The Australian Government has announced a $107 million Supply Chain Resilience Initiative to support Australian manufacturers to invest in capabilities that address areas of identified acute domestic vulnerability.
  • Ministers from Japan, Australia and India met in September to discuss supply chain resilience. They issued a trilateral statement that outlines their intention to work collaboratively on supply chain resilience in the Indo-Pacific region.
  • The European Commission has released an Action Plan to secure a sustainable supply in critical raw materials. The development of this action plan was identified as one of the work streams under the Industrial Strategy released in March as a means to reinforce Europe’s industrial and strategic autonomy. The Action Plan also aims to increase the use of secondary raw materials, improving resource efficiency and circularity while promoting responsible sourcing worldwide.
  • The Competitiveness and Business Facilitation Committee for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) held a workshop on supply chains in late September. New Zealand participated in this workshop, and gave a presentation on our response to supply chains disruptions caused by the COVID-19 pandemic.  The aim is to use this Committee to monitor how regional supply chains may change as a response to COVID-19 disruptions and ensure New Zealand is well placed to address any resulting risks or opportunities. 

Availability of Air Freight

  • Air freight continues to be significantly disrupted by the COVID-19 pandemic, with reduced flights and elevated freight costs. The Government has extended the operation of the International Air Freight Capacity Scheme (IAFC), which had been scheduled to expire on 30 November 2020, to the end of March 2021.
  • Airfreight capacity has increased within the EU, with a growing number of internal flights and external arriving flights (though this marks an increase from a low base). This increased capacity includes flights operating into major air cargo hubs connected to New Zealand, such as Hong Kong and Singapore.
  • The New Zealand Embassy in Dili is reporting persistent delays, with air freight cargo continuing to be held up in Darwin.

Availability of Sea Freight

Data points are shown where there are reductions and where data is available.

  • While COVID-19 has disrupted global sea freight to a lesser extent than air freight, some sea freight supply chain pressures have emerged recently. 
  • Several industry stakeholders, have reported sea freight import and export delays with vessels arriving five to seven days late to New Zealand. This may have flow on delays for exporters to move goods offshore. The delays have been attributed to multiple causes including deferred import activity from earlier in the year due to COVID-19 shutdowns in trading partners, the death of a worker at the Port of Auckland, and industrial action in Australian ports delaying vessel flows. These developments are occurring at a time when New Zealand typically enters peak import and export season and an inter-governmental group of officials led by the Ministry of Transport is following developments closely.
  • In the Republic of Ireland, maritime passenger movements have fallen by 95% and freight volumes are down by approximately 40%. Shipping services are continuing and Irish ports are open for business with continuity plans in place.

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This information released in this report aligns with the provisions of the Official Information Act 1982. The opinions and analysis expressed in this report are the author’s own and do not necessarily reflect the views or official policy position of the New Zealand Government. The Ministry of Foreign Affairs and Trade and the New Zealand Government take no responsibility for the accuracy of this report. 


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