Government officials have been asked to ensure the ships keep sailing, as container shortages, port congestion, price gouging and unforeseen disruptions like Suez Canal intensify.
Businesses warn they will no longer be able to absorb the rising costs of shipping as supply chain disruptions continue to worsen while demand from consumers also increases.
Megan Anderson, the owner of small Auckland business Tuti, says the logistics costs of having to manage three to four month-long shipping delays for goods from overseas for her business are growing day by day.
Anderson sells cloth nappies, and says it has been difficult to not increase margins proportionately when shipping costs have increased by 400 percent on the same time last year.
"We put up our prices by about 7 percent to cover the shipping costs, but we'll have to put them up by at least 10 percent," Anderson says.
"Logistics costs have increased because of the delays. We are ordering more products even though we run the risk of over stocking and having to then sell it at a discount. There is also the tax implications of ordering more products, as well as the storage costs."
BusinessNZ has been surveying the 80,000 businesses in its network, revealing logistics and supply chain disruptions were business' biggest concerns at the moment, followed by the rising Kiwi dollar. The organisation has met with Government officials, pleading for them to help keep the shipping channels open.
Statistics NZ's latest data shows trade remained at historically high levels in the first quarter of the year, edging up 0.1 percent.
"The jump in the demand for, well everything, has led to a surge in global shipping costs." – Kiwibank chief economist Jarrod Kerr
Kiwibank chief economist Jarrod Kerr said the bank was forecasting inflation to jump above the Reserve Bank's 2 percent target for this quarter, as consumer demand amid the supply chain disruptions rises unexpectedly higher.
"Increased consumer demand in online shopping has come as a surprise," he said. "We've seen a huge lift in online activity consumers who were unable to travel or have been spending more on consumable goods.
"In addition, the jump in the demand for, well everything, has led to a surge in global shipping costs. Locally, clogged ports over the summer added long delays for goods and materials that were in high demand. In response firms are having to pass rising costs onto consumers."
Kerr said the price of containers had gone up from $1600 to $2000 in recent months.
ExportNZ executive director Catherine Beard said businesses had been trying their best to absorb these rising costs, but they wouldn't be able to for long.
"Supply chain issues have put pressure on businesses for sometime but the issue has become acute over the past month," she said.
Cool storage facilities across the country were at full capacity, and it had been an increasingly difficult to find containers for importers and exporters.
"We've heard farmers say they're better off leaving the onions in the ground, because there are no cool storage space available," Beard said.
"Businesses have been able to absorb these rising costs, but it's hard to imagine prices won't go up for consumers." – Catherine Beard, ExportNZ
Due to the backlog of disruptions from Covid-19, ships had been bypassing ports to stay on schedule as much as possible. "Ships are skipping Auckland and going straight to Tauranga. Then goods have to be shipped back to Auckland via rail."
To add fuel to the fire, Beard said shipping companies had been accused of price gouging, and taking advantage of increased demand.
"Businesses have been quite resilient so far, but they're working twice as hard. And they have been able to absorb these rising costs, but it's hard to imagine prices won't go up for consumers."
"We're competing with global companies more than ever as demand for online shopping grows and compared to last year, we're not seeing as much 'shop local' campaigning. I think we need to remind people that Kiwi businesses are still struggling." – Megan Anderson, Tuti
Business NZ chief executive Kirk Hope said there was strong demand for commodities, which was great. "But the trouble is actually getting into the market."
Larger businesses like Fonterra and Zespri could afford to ship directly, he said, but smaller exporters had fewer options.
Reserve Bank chief executive Yuong Ha agreed that rising commodity prices and the prospect of an interest rate hike in the second half of next year, signaled in last week's Monetary Policy Statement, had caused a surge in the Kiwi dollar.
"It was really important that we gave the message that we are a bit more confident around the nature of the recovery we're seeing. It is time to talk about normalising to some degree." – Yuong Ha, Reserve Bank
"We were certain conscious of the market reaction on the day, and potential further reaction," he told Newsroom. "From our point of view, it was really important that we gave the message that we are a bit more confident around the nature of the recovery we're seeing. It is time to talk about normalising to some degree."
The last 12 months had been extraordinary, he said, and stimulul through OCR cuts and the large-scale assets purchase programme had reflected that. "But we think we're beginning to see the light at the end of the tunnel, so it makes sense to start talking about what the new normal will look like.
"It makes sense to start talking about the time the interest rate rises might be needed. Twelve months is still a very long time away and we're talking about very small increases."
Anderson expected shipping issues to continue for the rest of the year.
Businesses needed to revisit discussions about manufacturing locally to survive the fallout from the pandemic, she said.
"We're competing with global companies more than ever as demand for online shopping grows and compared to last year, we're not seeing as much 'shop local' campaigning. I think we need to remind people that Kiwi businesses are still struggling."
