2021 EXPORTNZ DHL EXPORT BAROMETER:

• The Covid-19 pandemic continues to impact the way we work; 46% of Kiwi exporters have developed new products/services
• NZ exporters are still mostly optimistic; 62% expect international orders to increase, indicating a strong year ahead in 2022
• 78% cited increased costs and the unpredictability of transport options as the main barriers to exporting
• Closed border and MIQ restrictions have caused further headaches, with 51% of Kiwi exporters struggling to get in front of customers or find the talents they need

Kiwi exporters have done well to adapt to the new normal, but the impact of Covid-19 has undoubtedly changed the course of the industry's future and created an unsettling year. While many businesses are prepared, having introduced work-from-home procedures and online integration, there are still resounding implications from the pandemic that can’t be resolved by ‘hand sanitising’ and ‘physical distancing’ measures.

Catherine Beard, Executive Director of ExportNZ, said, “Kiwi exporters are working hard to maintain their indispensable relationship to the global exporting industry. Businesses are increasingly concerned that while the rest of the world is getting back to business, New Zealand exporters risk losing business to competitors and/or gaining a reputation of being unreliable, expensive and potentially slow to deliver. While it is positive to see ingenuity from Kiwi exporters and the increasing value of greater investment in Research & Development – it may still take time for these changes to pay off.”

According to the 319 New Zealand exporters surveyed, Covid-19 has brought new barriers to the forefront. 78% of Kiwi exporters cite the increased costs and unpredictable transport options as the number one barrier to exporting. This is followed by 51% who stressed the inability to travel due to border / MIQ restrictions.

With the congestion at Ports, lack of space on underbellies due to the reduced passenger flights by commercial airlines and a border system that has been dubbed “broken”, the ability for New Zealand businesses to operate is heavily impacted and Kiwi exporters are desperate for government assistance.

Furthermore, concerns were raised around the increasingly high cost of doing business in NZ and the cost of labour, which are both reflected by the increased minimum wage, the low unemployment rate and the lack of ability to get talents domestically and into New Zealand due to an immigration re-set.

As experienced exporters looked beyond previous assumptions that supported years of stable, predictable growth, they instead searched for opportunities and developed new products and services to increase export sales. Because of this, just over half of Kiwi exporters (51%) saw an increase in their sales and 62% have indicated the potential for a strong year ahead in 2022.

Selina Deadman, Vice President, Commercial, DHL Express New Zealand, said “While this year’s ExportNZ DHL Export Barometer results highlighted another tough year for our Kiwi exporters, it is pleasing to see that 51% experienced an increase in their international export orders; a statistic that is reflected in the strong export shipment growth that we have seen through our network. The pandemic has once again put the spotlight on Kiwi exporters investing in innovation, new product development and sustainable initiatives to reach international audiences. With our fleet of owned aircraft, DHL is committed and will continue to play a key role in delivering these great Kiwi products to the world.”

This year’s ExportNZ DHL Export Barometer results highlight that there have been some substantial changes in the way that New Zealand businesses work, with NZ exporters thinking hard about their supply chain reliability and the markets they operate in. One of the biggest challenges Kiwi exporters will be facing from now and into the future is how they manage the supply chain disruption and how they transform their traditional supply chain models.

Covid-19 impacts on logistics and the closed border / MIQ rules 

The effects that the global freight congestion is having on Kiwi businesses is staggering. 88% of Kiwi exporters experienced an increase in logistics costs, 86% experienced delayed transport times and 57% are unable to even get shipping space, prompting the need for the government to monitor the situation closely.

Furthermore, 44% of Kiwi exporters want to see government assistance in a border system that prioritises exporters for vaccinations and safe travel, with no MIQ being necessary. Kiwi exporters have stressed that the closed borders are heavily impacting their business; forcing them to make staff cuts, shut down or relocate offshore until the border closure rules offer a solution.

Kiwi exporters forced to future proof business processes

66% of Kiwi exporters have had to change the way they work due to Covid-19. The pandemic has fundamentally shifted the way Kiwi businesses work, with many forced to plan for the long term until they see some stability. With the lack of trust in supply chains among Kiwi exporters, they now hold surplus stock onsite, increased product costs or re-looked at their export markets due to the increased logistic costs.

Digital world needed to keep businesses running

Throughout 2021, we have seen a greater reliance on the digital world to keep businesses running and New Zealand has adapted. 44% of Kiwi exporters implemented online initiatives such as zoom calls, delivering online sales and automation, but the majority of our manufacturing exporters are still reluctant to invest in online channels to generate sales. Deadman added, “We expect the boom in e-commerce to continue to grow and adapt with the market, as more and more of our customers tap into online sales and benefits for their business. DHL continues to be prepared to support this exponential growth.”