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Fewer air freight flights has had an impact on QP Sports, which exports 95 per cent of its product, managing director Richard Shearer said.
A Taranaki sports bra exporter is slowly climbing out of a sales drought that left it without a single order during the first two stages of coronavirus lockdown.
“We had zero orders from mid-March to late May after gyms and dojos were closed, and sports events and training schedules were cancelled,” QP Sports managing director Richard Shearer said.
QP Sports is among a number of small-to-medium-sized Taranaki exporters that have weathered the Covid 19 lockdown, juggling global sales and freight costs in anticipation to a return to business as normal.
Options to export have dropped dramatically as the number of flights has been reduced by 90 per cent, and air freight costs – unable to be subsidised by passenger fares – have increased by nearly 75 per cent.
Mainfreight Air and Ocean New Plymouth manager Ed Gafney said local exporters faced limited options on how to get their product to suppliers.
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Sea freight was not as affected as air freight, he said.
“We are working on finding the right solution, whether it be delivering product using a combination of air and sea freight, or using charter flights out of Auckland or Christchurch.”
QP Sports manufactures protective sports bras for athletes and sportsmen and women.
Export orders made up to 95 per cent of the business, supplying product to 150 distributors around the world, Shearer said.
European countries that locked down early as the coronavirus spread had a strong impact on sales, he said.
“Germany, in particular, is a major market for us.”
Shearer did not expect business to return to pre-coronavirus sales until late 2020.
The impact could have been worse if the company was reliant on air freight and had to bear the increased costs.
“We were lucky the global sports scene is reacting slowly to getting back to normal so we can afford to use sea freight for a slower delivery than using air freight,” Shearer said.
“We had one shipment paid for and ready to go just before lockdown but which is still sitting in New Zealand, and the freight costs have now doubled.”
Simon O’Connor/Stuff
Egmont Honey chief executive James Annabell said a global postal backlog was slowing deliveries to online customers.
Egmont Honey chief executive James Annabell said the company used sea freight to export 97 per cent of its product, so it was not impacted significantly by changes to air freight costs.
The company exported to Australia, Japan, China, United Kingdom and Singapore.
“We used air freight to import packaging from China, so we were affected to a small extent,” he said.
“We also arranged a shipment of 300,000 protective masks from a supplier in China to a supermarket customer in Australia where we paid US$11/kg so that was pretty horrendous.”
Annabell said the backlog of mail at NZ Post was causing delivery delays for customers who had ordered online.
“We’ve also had distribution problems in the UK, so the supply logistics had been frustrating.”
Other Taranaki exporters, such as Waitara maple tree nursery Acer Unlimited, and Port Taranaki crayfisher Allan MacKay will not begin fully exporting and have yet to feel the full brunt of costs and potential delays.
“The Covid 19 has affected our European market and I expect the pressure will come on for us in July,” Acer Unlimited production manager Jim Hadlow said.
MacKay said the export price of crayfish had dropped 50 per cent while freight costs were up 75 per cent.
“It will impact on our day-to-day operation when we start again,” he said.
“We will just work through it, the market will eventually pick up again.”
Venture Taranaki chief executive Justine Gilliland said air freight was an important channel for Taranaki exporters, making up 33 per cent of total local export market.
Port Taranaki was operating well but there may be some backlogs at other New Zealand ports resulting from the lockdown period, and at destination ports overseas, causing delays, she said.
