Mainfreight volumes plunge after lockdown, warns of shipping container crunch

Wednesday, 8 April 2020

Mainfreight expects its upcoming profit to be ahead of last year's but the lockdown could have an impact on its next result.

Transport company Mainfreight has repeated a warning from trucking operators that a shortage of shipping containers for export could be developing.

The company has told the NZX that volumes of inward shipments had varied because only essential supplies were able to be delivered,

'This may pose medium-term equipment supply issues for the shipping industry for important exports'.

The Road Transport Forum has also warned that leaving non-essentials unpacked in shipping containers could create a lack of containers for exports.

Mainfreight chief executive Bruce Plested. The company's New Zealand situation has been shielded somewhat by its overseas business.

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Despite a major drop in volumes this month due to the lockdown, Mainfreight said its full year profit had been largely unaffected by Covid-19.

The New Zealand-based company, which operates in Europe, the United States, Australia and Asia, said it expected its full year to March 31 to be ahead of the previous year's profit, which was a record $141 million.

Mainfreight told shareholders that volumes had been relatively stable going into the lockdown, but sales had fallen 40 per cent in New Zealand in the first full week of April, and the month's trading was expected to be 'significantly impacted'.

Even though it was an essential business all over the world, 'differences in Covid-19 response levels, and in customer profiles, are providing varying financial results by region'.

In New Zealand, the freeze on non-essential goods had hit its transport revenue hard, but as the definition of essential products broadened, it was 'well positioned for post-lockdown developments'.

Normal air freight had been replaced with air charters and the majority of these were taken up with important exports into China and imports of PPE, the company said.

Globally, Mainfreight's sales in the first week of April shank 7 per cent on the previous year, but exposure to other countries was helping to offset the impact.

China was easing its restrictions but the state of lockdown in south-east Asian countries varied. Australia's partial lockdown had been surprisingly good for the company, with high volumes of supermarket and hardware deliveries.

The situation in Europe differed from country to country, although borders remained open to freight.

The US' gradual move to full lockdown meant transport volumes were now down by a fifth, but the company's outlook for the next two months there was 'not as bad as expected'.