Postage drops but not expected to return to pre-Covid levels

Congestion is still a very big problem in ports such as Singapore, Kuala Lumpur and Hong Kong, says Lisa Coleman, director of Rocket Freight. (file picture)
Photo: RNZ / Nate McKinnon

Shipping costs are down, but freight owners still have to rack up a lot more than pre-Covid levels.

Kiwibank says major indices that track freight costs have fallen sharply in recent months, with pressure on supply chains also easing.

Cargo shipping company Rocket Freight said shipping a 20ft container from China to New Zealand now costs around $5,000 ($8,315) to $6,000, down from $800 before Covid -19 and $12,000 to $15,000 at its peak.

Its director, Lisa Coleman, thought the panic around shipping was coming to an end.

“The space is sort of stabilizing and many companies have unfortunately gone bankrupt and ceased operations. While this is terrible on the one hand, on the other hand it means there is less competition for this space,” Coleman said.

“People are also looking for other ways around the problem rather than having to rely so much on the import process.”

This freed up space, allowing her to be more flexible on pricing, she said.

Prices could fall further, but they did not expect them to return to pre-Covid levels as shipping lines made record profits, she said.

“I don’t think shipping companies are going to turn around and say ‘no, we want to get back into balance,'” she said.

“Congestion is still a very big problem in ports such as Singapore, Kuala Lumpur and Hong Kong.”

It was the same on the West Coast of the United States which was “phenomenaly poor” with wait times of five months, Coleman said.

“It’s going to make a lot of money because they’re just paying their crews to sit on the water and do nothing.

“Until this congestion is really relieved, there is no point in lowering all these tariffs for the shipping companies.”

One positive aspect of recent times has been that Auckland Ports have improved efficiency after their automation project was halted, Coleman said.