Kiwi Exporters Confident About Survival, Despite Covid-19 Barriers - ExportNZ-DHL Export Barometer

Key findings:

- 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

The 2021 ExportNZ-DHL Export Barometer has found that as NZ continues to move through the pandemic, Kiwi exporters remain confident and optimistic about their survival. However, there are still major concerns around Covid-related barriers, which are ultimately affecting the exporting industry and how Kiwi businesses are operating.

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 with the global exporting industry. Businesses are increasingly concerned that while the rest of the world is getting back to business, NZ 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 and development, it may still take time for these changes to pay off."

According to the 319 NZ exporters surveyed, Covid-19 has brought new barriers to the forefront. 78% of Kiwi exporters cite 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 congestion at ports, lack of space on underbellies due to 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, reflected by NZ’s increased minimum wage, low unemployment rate, and the lack of ability to get talent domestically and into New Zealand due to an immigration reset.

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 some substantial changes in the way that NZ 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 is how they manage supply chain disruption and transform their traditional supply chain models.

COVID-19 IMPACTS ON LOGISTICS AND THE CLOSED BORDER / MIQ RULES

The effects of global freight congestion on Kiwi businesses are 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, highlighting the need for the government to step in.

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 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 a lack of trust in supply chains among Kiwi exporters, they now hold surplus stock onsite or are reassessing their export markets due to increased logistics 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 NZ has adapted. 44% of Kiwi exporters implemented online initiatives such as zoom calls, delivering online sales and automation, but the majority of 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 of our customers tap into online sales and benefits for their business. DHL continues to be prepared to support this exponential growth."

-The results of the 2021 ExportNZ DHL Export Barometer were compiled before the current Delta outbreak in NZ.

ABOUT THE EXPORTNZ-DHL EXPORT BAROMETER

A joint initiative between ExportNZ and DHL, a total of 319 New Zealand exporters were surveyed for the ExportNZ-DHL Export Barometer 2021. The ExportNZ-DHL Export Barometer is an initiative aimed at analysing export confidence in NZ and identifying export trends. It is based on nationwide research, examining the business outlook of Kiwi exporters, highlighting changes in overseas market demand, and providing insights into the factors impacting on NZ’s export trade.

The research was conducted between 5 August and 2 September 2021. Respondents included representatives from all areas of the country, with Auckland representing 33%, Wellington 10%, Rest of the North Island 36%, Canterbury 15%, and Rest of South Island 6%. They comprise a range of business sizes with 33% having 1-4 employees, 28% classed as small businesses (5-19 people), 24% medium (20-99 people) and 15% as large organisations (100+ employees).

The key industry segments targeted are: Manufacturing (42%), Agriculture, Forestry or Fishing (15%), Online Retail (12%), ICT services, commercial services, consulting (5%) and Professional Scientific & Technical Equipment (4%).

While the majority of respondents comprise businesses that have been exporting for more than 20 years (39%), 22% have been exporting for five years or less. Just under one quarter (23%) have been exporting for 11-20 years and 16% have been exporting for 6-10 years.

DHL THE LOGISTICS COMPANY FOR THE WORLD

DHL is the leading global brand in the logistics industry. Our DHL divisions offer an unrivalled portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, road, air, and ocean transport to industrial supply chain management. With around 400,000 employees in more than 220 countries and territories worldwide, DHL connects people and businesses securely and reliably, enabling global sustainable trade flows. With specialised solutions for growth markets and industries including technology, life sciences and healthcare, engineering, manufacturing and energy, auto-mobility and retail, DHL is decisively positioned as "The logistics company for the world."

DHL is part of Deutsche Post DHL Group. The Group generated revenues of more than 66 billion euros in 2020. With sustainable business practices and a commitment to society and the environment, the Group makes a positive contribution to the world. Deutsche Post DHL Group aims to achieve zero-emissions logistics by 2050.

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