New Zealand companies lose $1.7 billion per year to shipping delays

13 April 2023 2 min. read

Supply chain issues cost New Zealand companies an average of around $1.7 billion in lost sales each year, according to a study. While supply chains are currently more balanced after the chaos caused by Covid-19, geopolitical issues could cause more difficulties going forward.

New Zealand is more vulnerable to supply chain issues than other developed countries. With an economy worth about $360 billion, the country exports premium products like wine, lumber, produce, meat, and dairy products. However, being an island nation, New Zealand also relies heavily on imports.

According to supply chain consulting firm TMX Global, unreliability in the supply chain costs Kiwi companies an average of 0.47% in lost revenue, or a total of around $1.69 billion lost every year. The war in Ukraine, climate change, and remaining Covid-19 limitations are all factors that are impacting supply chain costs.

New Zealand companies lose $1.7 billion per year to shipping delays

“We import a large proportion of our vehicles and machinery as well as retail goods, making us particularly vulnerable to higher transportation costs and longer delays when there are supply chain bottlenecks in our source markets,” said TMX Global New Zealand general manager Caleb Nicolson in an interview with

Nicolson noted that New Zealand also faces a shortage of workers, with negative net migration flows, all factors that put pressure on prices. Inflation has also been forecasted to increase.

Congestion at both ports of origin and destination has contributed to the port delays. During the pandemic, New Zealanders saw shortages of some products like orange juice and frozen foods.

Ships waited for weeks to access the Ports of Auckland when the bottleneck was at its worst in 2021. Though the shipping and logistics chaos mostly subsided last year, costs remained high, with shipping prices having increased 600% in some cases.

“The other narrative I think that is coming our way is the climate reality. We’ve all had that on our radar, but we need to take the microscope and completely apply it with the recent weather pattern we have had,” Nicolson said.

New Zealand’s Ministry for the Environment found that climate change had cost the country’s economy $840 million in the decade between 2007 and 2017. That number is according to the researchers expected to be significantly higher in the next decade being studied.