14 July 2022

Supply Chain Disruptions: They Disrupt

We are in the middle of a surge in the arrival of new stock. We are also in the middle of a second Covid wave. Not every container can be unpacked immediately on arrival. That is annoying but maybe not quite as bad as being held in a leaking tent, awaiting a turn to enter the emergency department of a hospital in our largest city.

Our staff do their best to give priority to genuine urgencies. When everything is urgent, nothing is. Containers that unload from ships in Tauranga take about three weeks to reach Auckland, a three-hour drive away.

We continue to be subject to Covid-related absenteeism and have difficulty finding new staff. There is a waiting list of several months for us to get delivery of goods-handling equipment. Most warehouses, ours included, are full to the rafters and few are being built. Yet, this too will pass. The large inventories accumulated by some importers will have to move out, sooner or later.

We have adopted several measures to mitigate the current difficulties. We leased a fourth warehouse that acts as a processing centre for the other three. That will enable us to convert the processing areas in those warehouses to high racking, substantially increasing our storage capacity. We bought two additional trucks to cover the movements to the processing centre. Our immediate expenditure on those measures was about $900k, including an additional recurring annual rent of $300k.

We will continue to provide updates on local conditions, so that they are visible to you. We ask you to work cooperatively with our warehouse managers to increase communication for both parties, so we can do the best we can during this period of disruption.

Daniel Silva