Iran War: Business once again staring down supply woes, rising costs
Friday, 13 March 2026
Businesses are grappling with logistics and freight concerns and re-routing, along with a swathe of rising costs, including insurance and fuel costs, but most remain “calm” amid the escalating Middle East tensions.
“We're very confident this is just another challenge for exporters, but not one that's going to be too concerning,” BusinessNZ chief executive Katherine Rich told The Post, when asked about the impacts of the US-Israel war on Iran, and disruption from the closure of the Strait of Hormuz.
“Exporters are so good at dealing with whatever the challenge is and meeting it. We have some of the most resilient exporters on the planet, and they're used to dealing with all sorts of things that crop up. This is not the first concern, and it certainly won't be the last.”
Disruptions BusinessNZ members were facing currently included higher shipping and related costs, longer routes, and concerns about congestion and alternate ports and transport shipping hubs, said Rich.
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Despite this, most exporters were “calm” about the outlook ahead, she said.
“With the ships going elsewhere, they're going to other ports, some have been working on contingency plans, some dependent on either sending goods to the Middle East or getting products back from the Middle East, have already had contingency plans.
“One firm, who I won't name, has stock of their products here in New Zealand right through until spring, so they feel confident there's a certain amount of time to see how things go in the Iran situation before they're going to worry.”
Insurance premiums in this country have already ready risen, and are expected to continue to rise, and some increased costs have filtered through to higher prices and the potential for wider inflationary pressures across the economy, Rich said.
“It remains to be seen what level that will be. But, New Zealand exporters are so used to bouncing around and looking for alternate ways to get our products where they need to be.”
Supply disruption is a given, along with a rise in general price inflation, but Rich said she did not expect it to be at the levels seen post Covid.
“What we're facing is just another exporting challenge. I don't see it as a shock, and I don't agree with comparisons that have been made with what occurred in the 1970s particularly for oil, because the market and the whole provision of oils are set up in a different way than the 1970s, when it was absolutely a shock,” she said.
“We know there will be some cost impacts and some timing impacts, but because of the resilience of our supply chains, both in and out, I don't foresee that there's anything that we can’t deal.”
Rich said the chief executives and senior business leaders of large organisations that BusinessNZ had spoken to over the past week were “calm” and “relatively relaxed” about the evolving situation.
“They're not playing down the significance of this challenge, but they're used to dealing with supply chain issues all the time, and New Zealand exporters are incredibly resilient. They will find a way around every challenge to make sure that our products end up where they need to be, on the other side of the world, and do what they need to do to make sure that New Zealand imports all the products that we rely on.”
Many “held reasonable stock levels” in New Zealand to counter situations like this. That was one of the lessons to have come from the pandemic, Rich said.
“Covid reminded everybody that taking a just-in-time approach was risky, and so people have changed their ways, and they forecast stock for a lot longer and delays, and they have backup plans.
“The largest businesses in New Zealand, they hedge their risks. They plan for challenges, and even though the Iran situation was not completely predictable, they are always thinking about other supply chains, rerouting product, and looking for alternate sources.”
Retail commentator Chris Wilkinson, managing director of First Retail Group, said disruption stemming from the escalating conflict in the Middle East cut across all parts of the economy ‒ and it could have the ability to stunt the predicted economic turnaround expected this year.
“This is going to start to influence interest rate changes. It's going to impact people's investments. The big question is, how long will this last? There is no certainty around how long it will last, and that is the key decider, because things can potentially bounce back quickly, if it's not sustained for a long period of time, but right now people will be seeing the impacts on their KiwiSavers and the likes of interest rates.”
Because energy was a central part of all inputs, whether manufacturing here or bringing it in from overseas, that had a major impact across the board.
The impact was already being seen in rising petrol prices in New Zealand, but it would also become more apparent across the cost of grocery prices and insurance premiums too, Wilkinson said.
“There’s the potential for a ripple effect across the economy, even such as holding up building projects or having out of stocks in certain type of products.”
For how long, and to what extent it would impact the economy, was currently unknown and would depend on how long disruption across the Middle East, and the closing the Strait of Hormuz, continued for, he said.
The Strait of Hormuz is a critical sea route, responsible for the transportation of about 20% of global oil consumption.
While a lot of New Zealand goods do not pass through the Strait of Hormuz, if oil shortages and price inflation is prolonged, it could mean that big ships are less likely to come to our part of the world, constraining supply.
“If there are shortages and priorities are having to be made on a global scale, then it's highly likely that suppliers will favour those markets that are the largest and most lucrative,” Wilkinson said.
Currently, there was no material impact on supply to New Zealand, he said.
“In business and the economy, it seems that people have been feeling much better about things. Generally, when you talk to businesses or the property sector, there's a lot of activity going on in New Zealand.
“The Government's been spending on infrastructure, and it's been a positive trajectory in general terms, so [to have this disruption happen], it's incredibly disappointing.”