It’s cherry harvesting time in Australia. Cherry Growers Australia claims that about 20,000 tons are being harvested across all six states. Some 50% of that volume will be heading to export markets. China is the largest customer, where the locals are stocking up for Chinese New Year on February 01. Still, getting perishable produce like cherries to the Chinese right now is a challenge for insurance companies that manage transport and logistics insurance.
As the harvest gets into full swing for many fruit and vegetable farmers, including cherry producers, the recent floods across NSW and Queensland have only added to logistical and cost problems.
Since September, when companies traditionally rush to fill their stores with stock for Christmas, there’s been an extreme shortage of space on ships and a lack of containers. COVID-19 impacts had already pushed the cost of freight to extreme levels. NTI’s logistics risk engineer, Kurt Herron told Insurance Business that the cost of a 40-foot container from China to Australia was costing between $5,000 to $7,000. Pre-COVID the cost was closer to $2,000.
According to the container shipping research website Sea-Intelligence, only 30% to 40% of shipping vessels are delivering their goods on time compared to twice that percentage pre-COVID. Delays are worse too, averaging about seven days compared to about four days before the pandemic.