Goods being shipped from the UK and Europe to New Zealand may face delays of up to five weeks as freight ships are re-routed in the Red Sea.
Several container ships have been attacked by Iran-backed Houthi rebels in recent weeks while travelling through the busy route.
The attacks have intensified since Israel declared war on Hamas in Gaza on October 7 last year.
Because of this, shipping companies have been forced to take the longer route – around Cape of Good Hope. This adds extra time to the trip.
Around 12% of trade travels through the Suez Canal into the Red Sea, the Ministry of Foreign Affairs and Trade says.
“As a result of this re-routing, there will likely be some delays in the shipment of goods where products are sourced from Europe and Great Britain,” Retail New Zealand chief executive Carolyn Young said.
She said the delays could impact seasonal products, for things such as Easter.
“Retail NZ has had indications of delays of between three to five weeks and some increases in freight costs,” she said.
“Impacted retailers are working pro-actively on their supply chain to ensure that any gaps will be for short delays and in most cases on a small range of products.”
The danger of passing through the Red Sea has meant insurance costs for companies have also increased.
It’s not just having an effect on how long goods take to arrive in New Zealand, but also how much they cost.
Massey University supply chain lecturer Carel Beuidenhout told RNZ that the conflict will influence several industries. The kiwifruit industry may be hit particularly hard.
"When we start harvesting kiwifruit, and we want to get those fruit to Europe as fast as possible, then it is going to become problematic for us to add another two weeks to get around the Cape of Good Hope."
"I wouldn't be surprised if the shipping companies want to up their freight rates," Maritime Union national secretary Craig Harrison told RNZ.
Last week, New Zealand joined a group of 112 other countries, calling for the attacks in the Red Sea to cease.
"We've certainly seen a comment by shipping companies that what is happening in the Red Sea is adding massively to cost, and we've certainly seen [comment] in the media by people involved in the logistics business that the cost of shipping containers has gone through the roof,” defence minister Judith Collins said.
"Obviously, New Zealanders are having to pay for that, so it is important that this gets sorted."
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