2020 ExportNZ DHL Export Barometer: High costs and lower frequency of transport options, number one barrier for the NZ
export industryFocus shift to individual business margins with the level of the NZ dollar no longer the running for the top barrierDespite a 35% decrease in orders for some businesses, 66% of respondents didn’t feel a negative impact on their export
business in 2020Australia dominates NZ exports with 82% of respondents sending goods across the ditchOver 51% of exporters have changed and adapted business models amidst a global pandemic
The 2020 ExportNZ DHL Export Barometer released today, finds the number one barrier to exporting is the high cost and
lower frequency of transport options to get products to market, which is largely due to the impact of Covid-19 on supply
chains around the world. The dramatic reduction in commercial air passenger travel has increased the cost of airfreight
and forced more exports onto ships, ultimately impacting supply chains globally.
According to the research conducted among more than 270 New Zealand exporters, top barriers to doing business have
changed substantially from previous years, with the costs of logistics and transport shooting into the top spot,
followed closely by Covid-19 and the general costs of doing business. What is promising, is after being in the top three
major barriers for the last five years running, Kiwi exporters' concern around the ‘level of the NZ dollar’ has dropped
significantly to the 7th major barrier. This probably says less about the level of the dollar and more about the
increase in other barriers such as transport costs.
When looking into the impact that Covid-19 has had on NZ exporters, most were on the positive side of the ledger, with
two thirds (66%) of respondents surveyed noting that they didn’t feel a negative impact on their export opportunities as
a result of Covid-19 and furthermore, whilst NZ exporters are cautious, over 84% of respondents are not expecting a
decrease in business orders in 2021. However, there was no denying a dip in export orders compared with 2019, as it was
about double the normal amount that experienced a decrease in export orders (35% vs 15% in 2019). Whilst Kiwi exporters
are still more cautious than ever before, it’s promising to see in spite of it all, they continue to remain relatively
optimistic for the year ahead.
This year’s ExportNZ DHL Export Barometer results also highlight that there have been some substantial changes in the
way that New Zealand businesses work. Kiwi businesses are thinking hard about their supply chain reliability with 33% of
respondents saying they were trying to reduce their reliance on other markets by creating more products locally. In
spite of this, exporters are being careful to maintain their competitiveness and not invest too heavily on business
costs when they are already struggling with increased transportation and other Covid related costs.
Selina Deadman, Vice President Commercial, DHL Express NZ, says, “We are not out of the woods just yet, and this year’s
ExportNZ DHL Export Barometer results highlight that, but it is great to see that Kiwi exporters remain optimistic for
the coming year. Within an ever-changing global marketplace, Kiwi businesses will continue to create, innovate and adapt
at a substantial rate, to continue to bring great Kiwi products fueled by ingenuity, to the world.”
Catherine Beard, Executive Director of ExportNZ, says, “It’s positive to see that Kiwi exporters are adapting to an ever
changing world, and it is good to see the Government continues to focus on securing new Free Trade Agreements and more
help from NZTE in overseas markets, as this is what exporters are telling us they want right now.Challenges ahead and what is next for exportersDriving Digital Change
Pre-Covid, only three-quarters (71%) of businesses surveyed had a digital presence, however like many businesses around
the world, Covid-19 forced many Kiwi businesses into the digital world to keep sales going. For the first time in five
years, increasing and enhancing an online presence for NZ Exporters, has overtaken product development.Having more faith in social media to drive sales
Of those that do generate orders from online platforms, over half of respondents (61%) said they had an increase in
online orders this year, and they also confirmed that leads and sales from Facebook had grown substantially with only
6.6% of respondents in 2019 seeing it as a strong sales channel, versus 30.9% in 2020.
While there is an increase in the number of NZ exporters enhancing their online presence and taking advantage of the
internet to general orders, the 2020 ExportNZ DHL Export Barometer indicates that some businesses are still yet to catch
onto the digital trend, with 35% of respondents saying they spend 0% of their marketing budget online.
Leaning on the government for their support, more than ever before
Despite slight increases in exporting to the top four global destinations, Kiwis are relying on the government to
support their businesses even more. While NZ exporters agreed in 2019 that attending trade shows would have been a key
way the NZ Government could assist business growth, over half of the respondents (51%) agree that travel restrictions
have stopped them going to trade shows for new business opportunities. Regarding long-term government support, 30% noted
‘more free trade agreements’ and 29% noted ‘more help from NZTE in overseas markets’; both initiatives seeing a 7%
increase in importance when compared to 2019 results. It’s positive to see that exporters are seeing the value of good
market access where their goods and services can enter on a competitive basis with other imports.
Australia will continue to be our ally
There were no changes to the positions of the top four exporting destinations, with Australia once again securing it’s
number one position, followed by North America (USA, Canada, Mexico), Europe and the UK. The report highlighted that in
2021 Kiwi exporters expect little change within the top ten favoured destinations with Australia continuing to dominate
NZ exports with 82% of survey respondents sending goods across the ditch, a 4% increase from 78% in 2019. While some of
the top products remain consistent each year - fruit, seafood, honey - there is a wide variety of niche products being
exported to Australia, such as weaving looms, possum insoles and electric unicycle parts. Other new, but not so
surprising, additions for 2020 include hand sanitizer, healthcare supplements and medical devices.