Chris Edwards: Former President of Customs Brokers and Freight Forwarders Federation on the spike in global shipping prices

There's claims continued Houthi strikes in the Red Sea are to blame for high shipping costs in this country. 

Another vessel sank last week after being struck, killing three people in the shipping channel and putting strain on the global supply chain. 

It's caused shipping costs in New Zealand to rise by three times last year's levels. 

Customs Brokers and Freight Forwarders Federation former president Chris Edwards told Mike Hosking that geopolitics play a huge role in international shipping. 

He says that now, shipping vessels need to travel further to avoid the Red Sea which increases costs. 

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Episode Transcript

Speaker 1 (00:01):
Before men to building in the Science which had one
with the update for you shortly from the States, here
we go again back home. We'll all a round the
world really bit. It affects us back home. Shipping costs
have seen a spike. They sit at triple what they
were at the end of last year. That of course
puts pressure on the plants have imported good which goods
which you guessed it means it fuels inflation. Now the
custom breakers and freight forward as Federation former president Chris

(00:21):
Edwards is with us on this. Chris, very good morning
to you.

Speaker 2 (00:25):
Morning Mike.

Speaker 1 (00:25):
What have we got at play here apart from the
Red Sea or is it the Red Sea? And is
it the Panama Canal or all of these things?

Speaker 2 (00:31):
Part of that It reminds you when we were speaking
during the COVID crisis. We've got a global disruptor, which
is the Red Sea. We've got an American market that
once again is on the rise. During COVID they had
a sharp increase in consumer spending and that was global.
But this time the American market is a bit different
to hours and we're seeing a lot more volume go
through ports. That's causing congestion and inventry managers in the

(00:52):
States are concerned about potential strike action on the East
Coast Ladder in the years, they're ordering early. That's creating
a peak season as well. All of this crets unity
for the shipping companies to raise prices, and they've taken
the opportunity.

Speaker 1 (01:03):
I don't know your expertise and geopolitical matters, but why
is the Red Sea still a thing? Why didn't they
work out that this is a problem and fix it,
nix it, shoot, somebody bomb, somebody get to Yemen.

Speaker 2 (01:13):
Well, I think, yeah, it's what we've learned at the
last out of twelve months. Geopolitics takes a huge part
in the supply chain. So with the ships now going
via South Africa or under the Capus over it's a
lot longer journey. Now there's a lot more capacity in
the supply chain, and that we built a lot of
ships during COVID and that capacity is kind of needed
right now as we take a longer journey to get
to now case New Zealand. I think the schedule reliability

(01:34):
is thirty percent at the moment, so it's not great.
But once that Red Sea situation is fixed, when it
gets fixed, you can come back through the sewers canal
and a lot of those problems dissipate, and I suspect
with all these new vessels on online, capacity increases, demand
stantly lower and our part of the world downcome the crisis.

Speaker 1 (01:51):
And then the other thing is you bring it offsetting.
This is the fact we're importing list because we're in
a cost of living crisis. Can they costs get pasted on?
Read the inflation re debate. If you bring something in
your paid more, can you then pass it on and
people aren't going to buy it anyway?

Speaker 2 (02:03):
Well, Inflation is an interesting thing in the supply chain,
right because you've got the portabalk and putting their prices
up and seeing they're going to do their annually. Customs
are putting their fees up on the first of July
as well, and then you've got these ocean rate rises.
It's kind of hard to see how inflation gets under
control in the supply chain for the next sort of
six to eight months. I suspect, so passing costs on
with is not much demand, it's pretty difficult to do,

(02:24):
right if you're an importer.

Speaker 1 (02:26):
Exactly good insight, Chris appreciated as always Chris Edwards, who's
the customer breakers for Right Porters, former Federation president.

Speaker 2 (02:33):
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Speaker 1 (02:36):
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