The Impact of COVID-19 on Perishable Export Supply Chains in New Zealand: Strategies and Adaptations

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The Impact of COVID-19 On Perishable Export Supply Chains in New Zealand: Strategies and Adaptations

A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Commerce and Management

at Lincoln University by Benjamin Michael Bowie

Lincoln University 2021

Abstract

The COVID-19 pandemic has proven to be a unique and challenging disruption globally, with many supply chains facing ongoing disruptions as a result. As such, 94% of the Fortune 1,000 companies have reported disruptions within their supply chains as a result of the pandemic (Ivanov, 2020). For perishable export supply chains in New Zealand, this is no different, with many impacts resulting from the pandemic, thus testing the resilience of these specific supply chains. These impacts include capacity, labour and equipment shortages, but also severe port congestion globally. New Zealand is highly dependent on its perishable exports that have grown in quantity and value exponentially in the last two decades, both via sea and air freight. Global Logistics Businesses (GLBs) act as the critical link between the point of production and consumption within many perishable export supply chains. Thus, a key research question is to determine the resilience of GLBs and how they have managed to mitigate and reduce the impacts of a large scale disruption such as COVID-19. To investigate this question, multiple case studies were conducted on both GLBs and Carriers in New Zealand to identify the resilience plans and adaptations used during the preparation, response and recovery phases of the COVID-19 pandemic. A useful conceptual framework to help frame disruptions and plan for future events is the Haddon Matrix. This matrix acts as the primary interpretative framework to categorise distinct factors and strategies used within each phase of the disruption. The result of this research is a revised Haddon Matrix offered as a planning tool for managers and researchers that can be utilised when facing further waves of COVID-19, or new pandemics in the future. The findings of this research suggest that the majority of GLBs and Carriers coped well despite the lack of specific pandemic planning. It found that flexibility and communication were key to resilience, as well as favourable exogenous factors such as the New Zealand Government’s influence and fiscal support during the pandemic. Together with the unique experiences that each GLB and carrier has faced during the COVID-19 disruption, it is hoped that the revised Haddon Matrix will provide a roadmap to aid and improve resilience during each phase within the disaster management cycle, including the preparation, response and recovery phases.

Keywords: Supply chain disruptions, perishable, response, pandemic, COVID-19, coronavirus, resilience, New Zealand, exports, Haddon Matrix

Acknowledgements

I would firstly like to express my gratitude to both my supervisor, Dr Mark Wilson and associate supervisor Dr Muhammad Umar for providing support and guidance, but also sharing their vast and invaluable knowledge and experience with me over the course of my studies. Without them this research would not have been possible.

I am also hugely grateful to my parents Sue and Mike Bowie for their endless support and care they have shown in my time studying at Lincoln. It has played a huge part in my success and determination to complete my studies.

I would like to recognise all of the respondents who participated in this research. As demonstrated by this study, the impacts of COVID-19 have been challenging for the industry, so for them to take time out of their busy working schedules to share their experiences and knowledge is highly valued and appreciated.

Finally, I would show my appreciation towards Lincoln University and in particular all of those involved in the sports scholarship programme. During my time at Lincoln, I have been fortunate to be on the Basketball Scholarship and it has been a vital in providing me with not only the funding to complete my studies, but it has also provided the necessary balance to my university experience. A huge thanks must go to Hoani Smith, as well as the other staff involved in the programme.

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Table of Contents

Abstract...... Error! Bookmark not defined.ii Acknowledgements ...... iii Table of Contents ...... iv List of Abbreviations ...... viii List of Tables ...... ix List of Figures ...... x

Chapter 1 Introduction ...... 1 1.1 Background Information ...... 1 1.1.1 Coronavirus (COVID-19) ...... 1 1.1.2 Supply Chain Disruptions ...... 2 1.1.3 Perishable Commodity Exports...... 4 1.1.4 Supply Chain Resilience ...... 6 1.2 Importance of this Research ...... 7 1.3 Research Objectives ...... 9

Chapter 2 Literature review ...... 11 2.1 Disaster Management ...... 11 2.2 Supply Chain Resilience ...... 13 2.3 The Haddon Matrix Concept ...... 16 2.4 Categorising Disruptions ...... 17 2.4.1 Disruption Onset ...... 17 2.4.2 Risk and Vulnerability Assessment ...... 18 2.4.3 Outbreak Disruptions (Epidemics/Pandemics) ...... 19 2.5 Perishable Supply Chain Disruptions ...... 20 2.6 Preparation and Response ...... 21 2.7 Impact of Supply Chain Disruptions ...... 25 2.8 Gaps in Literature ...... 26

Chapter 3 Methodology ...... 29 3.1 Research Design ...... 29 3.2 Scope of Research ...... 29 3.3 Data Collection ...... 30 3.3.1 The Haddon Matrix ...... 31 3.3.2 Interview Protocol ...... 33 3.4 Data analysis ...... 34 3.4.1 NVivo 12 Analysis ...... 34 3.5 Methodological Issues ...... 35 3.5.1 Research Bias ...... 35 3.5.2 Research Validity, Reliability and Objectivity ...... 36

Chapter 4 Results ...... 38 iv

4.1 Chapter Introduction ...... 38 4.2 Case Study 1 (GLB1) ...... 38 4.2.1 Case Introduction ...... 38 4.2.2 Case Results ...... 39 4.2.2.1 Pre-event ...... 39 4.2.2.2 Event ...... 42 4.2.2.3 Post-event ...... 53 4.3 Case Study 2 (GLB2) ...... 58 4.3.1 Case Introduction ...... 58 4.3.2 Case Results ...... 58 4.3.2.1 Pre-event ...... 58 4.3.2.2 Event ...... 59 4.3.2.3 Post-event ...... 61 4.4 Case Study 3 (GLB3) ...... 63 4.4.1 Case Introduction ...... 63 4.4.2 Case Results ...... 63 4.4.2.1 Pre-event ...... 63 4.4.2.2 Event ...... 65 4.4.2.3 Post-event ...... 67 4.5 Case Study 4 (GLB4) ...... 68 4.5.1 Case Introduction ...... 70 4.5.2 Case Results ...... 70 4.5.2.1 Pre-event ...... 70 4.5.2.2 Event ...... 71 4.5.2.3 Post-event ...... 74 4.6 Case Study 5 (GLB5) ...... 77 4.6.1 Case Introduction ...... 77 4.6.2 Case Results ...... 77 4.6.2.1 Pre-event ...... 77 4.6.2.2 Event ...... 78 4.6.2.3 Post-event ...... 83 4.7 Case Study 6 (GLB6) ...... 85 4.7.1 Case Introduction ...... 85 4.7.2 Case Results ...... 85 4.7.2.1 Pre-event ...... 85 4.7.2.2 Event ...... 86 4.7.2.3 Post-event ...... 89 4.8 Case Study 7 (GLB7) ...... 90 4.8.1 Case Introduction ...... 90 4.8.2 Case Results ...... 90 4.8.2.1 Pre-event ...... 90 4.8.2.2 Event ...... 91 4.8.2.3 Post-event ...... 93 4.9 Case Study 8 (Shipping Line 1 – SL1) ...... 96

4.9.1 Case Introduction ...... 96 4.9.2 Case Results ...... 96 4.9.2.1 Pre-event ...... 96 4.9.2.2 Event ...... 97 4.9.2.3 Post-event ...... 99 4.10 Case Study 9 (Shipping Line 2 – SL2) ...... 100 4.10.1 Case Introduction ...... 100 4.10.2 Case Results ...... 100 4.10.2.1 Pre-event ...... 100 4.10.2.2 Event ...... 101 4.10.2.3 Post-event ...... 102 4.11 Case Study 10 (Airline 1 – AIR1) ...... 103 4.11.1 Case Introduction ...... 103 4.11.2 Case Results ...... 103 4.11.2.1 Pre-event ...... 103 4.11.2.2 Event ...... 105 4.11.2.3 Post-event ...... 107

Chapter 5 Cross Case Analysis and Discussion ...... 109 5.1 Impact of COVID-19 on Perishable Export Supply Chains in New Zealand ...... 109 5.1.1 Sea Freight ...... 109 5.1.1.1 Blank Sailings ...... 110 5.1.1.2 Equipment Shortages ...... 111 5.1.1.3 Service Changes by Exporters ...... 111 5.1.1.4 Market Collapses and Re-routing of Products ...... 112 5.1.2 Air Freight ...... 112 5.1.2.1 Rapid Halt to Aircraft Operations ...... 113 5.1.2.2 Support via Government Subsidies a Mitigating Factor ...... 115 5.1.3 Other Impacts ...... 115 5.1.3.1 Global-scale Disruption ...... 116 5.1.3.2 Food Service/Retail Commodity Impacts ...... 116 5.1.3.3 Volatility of Product Demands ...... 117 5.1.3.4 Impact of Social Distancing and Hygiene Protocols ...... 117 5.1.3.5 Recognised Seasonal Employers and Labout Shortages ...... 118 5.1.3.6 Supply Chain Relationships ...... 118 5.1.4 Future Outlook ...... 119 5.2 Timeline of COVID-19 Events and Impacts ...... 120 5.3 Resilience Plans and Adaptations Utilised by GLBs During COVID-19 Response ...... 123 5.3.1 Preparation Phase ...... 123 5.3.1.1 Host Factors in Preparation Phase ...... 124 5.3.1.2 Agent Factors in Preparation Phase ...... 127 5.3.1.3 Physical Environment Factors in Preparation Phase ...... 128 5.3.1.4 Socio-Culutral Environment Factors in Preparation Phase ...... 129 5.3.2 Response Phase ...... 132

5.3.2.1 Host Factors in Response Phase...... 132 5.3.2.2 Agent Factors in Response Phase ...... 135 5.3.2.3 Physical Environment Factors in Response Phase ...... 135 5.3.2.4 Socio-Culutral Environment Factors in Response Phase ...... 137 5.3.3 Recovery Phase ...... 140 5.3.3.1 Host Factors in Recovery Phase ...... 141 5.3.3.2 Agent Factors in Recovery Phase ...... 142 5.3.3.3 Physical Environment Factors in Recovery Phase ...... 142 5.3.3.4 Socio-Culutral Environment Factors in Recovery Phase ...... 143 5.4 Analysis Summary ...... 144 5.5 Revised Haddon Matrix ...... 145 5.5.1 Importance and Relevance of Approach ...... 148 5.5.2 Model Critique ...... 151

Chapter 6 Conclusions ...... 153 6.1 Summary ...... 153 6.2 Theoretical Implications/Contributions ...... 154 6.3 Managerial Implications/Contributions ...... 156 6.4 Limitations ...... 158 6.5 Future Research ...... 158 6.5 Final Remarks ...... 159

Chapter 7 References ...... 160

Appendix A – Interview Protocol ...... 167

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List of Abbreviations

A&O – Air and Ocean LCL – Less than container load

AIR – Airline MPI – Ministry of Primary Industries

BCI – Business Continuity Institute NZD – New Zealand Dollar

BCP – Business continuity plan NZTE – New Zealand Trade and Enterprise

CAA – Civil Aviation Authority PPE – Personal protective equipment

GLB – Global logistics business RACA – Regulated air cargo agent

CAA – Civil Aviation Authority of New Zealand RMP – Risk management plan

FDA – Food and drug administration RORP – Risk organism response plan

GDP – Gross domestic product RSE – Recognised seasonal employer

HFMD – Hand, food and mouth Disease SL – Shipping line

HR – Human resources TAPA – Transported Asset Protection Association IAFC – International air freight capacity TEU – 20-foot equivalent units IP – Internet protocol WFH – Work from home IT – Information technology WHO – World Health Organisation JIT – Just-in-time

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List of Tables

Table 1 Timeline of pandemics with death tolls and intervals ...... 2 Table 2 Resilience models ...... 16 Table 3 The Haddon Matrix template ...... 17 Table 4 Literature on preparation and response actions for supply chain disrupions ...... 22 Table 5 A hypothesised Haddon Matrix applied to COVID-19 disruption response ...... 32 Table 6 Measures for research validity, reliability and objectivity ...... 37 Table 7 GLB1 respondent information ...... 39 Table 8 GLB2 respondent information ...... 58 Table 9 GLB3 respondent information ...... 63 Table 10 GLB4 respondent information ...... 70 Table 11 GLB5 respondent information ...... 77 Table 12 GLB6 respondent information ...... 85 Table 13 GLB7 respondent information ...... 90 Table 14 SL1 respondent information ...... 96 Table 15 SL2 respondent information ...... 100 Table 16 AIR1 respondent information...... 103 Table 17 Impacts of COVID-19 on sea freight operations ...... 109 Table 18 Impacts of COVID-19 on air freight operations ...... 113 Table 19 Prepardness of GLBs for the COVID-19 disruption ...... 127 Table 20 Revised Haddon Matrix applied to the COVID-19 disruption response ...... 146 Table 21 Comparison between the hypothesised and revised Haddon Matrices ...... 150

List of Figures

Figure 1 The disruptive profile ...... 4 Figure 2 Vulnerability of disruption impacts for different commodity products ...... 5 Figure 3 Value of New Zealand perishable exports by commodity per year ...... 6 Figure 4 Total cumulative values of exports between January 27th to February 23rd ...... 8 Figure 5 Disaster management cycle ...... 12 Figure 6 Creating effective disaster management ...... 13 Figure 7 Measurement of resilience ...... 14 Figure 8 The ten factors that affect food system resilience ...... 15 Figure 9 Drivers of resource allocation during supply shortfalls in a disruption ...... 25 Figure 10 A timeline of COVID-19 events in New Zealand ...... 121 Figure 11 A timeline of COVID-19 impacts on perishable export supply chains in New Zealand 122 Figure 12 Key themes from the pre-event phase of COVID-19 ...... 124 Figure 13 Key themes from the event phase of COVID-19 ...... 132 Figure 14 Key themes from the post-event phase of COVID-19 ...... 141

1 Introduction

1.1 Background Information

1.1.1 Coronavirus (COVID-19)

On the 12th of December 2019, the first known patient was hospitalised with a new Coronavirus (COVID-19) in Wuhan, in the Hubei province of China. The origin of this deadly respiratory disease is still unknown, but early suggestions believe it was associated with the Huanan Seafood Wholesale Market in Wuhan where the initial patients were suspected to have been workers, handlers and frequent visitors (Lam et al., 2020). The disease is subject to calls for an international enquiry in order to establish the actual chronology of events. COVID- 19 is a zoonotic virus meaning that the disease originated from non-human sources (World Health Organisation, 2020) with cases showing that the virus is highly transmittable from person to person (Wu & McGoogan, 2020). The disease has spread rapidly around the world, with the World Health Organisation (WHO) officially declaring it as a pandemic on the 12th of March 2020 (World Health Organisation, 2020). As of the 29th of April 2021, there have been over 150 million cases of the disease globally, with more than 3.1 million fatalities as a result.

Many countries across the world, including New Zealand, initially provided guidelines concerning hygiene and sanitation to combat the spread, but soon after, implemented some of the strictest entry and exit restrictions in history, as well as social distancing and nationwide lockdowns. The COVID-19 outbreak has been deemed one of the most significant disruptions in the last few decades and is causing problems for most global supply chains (Business Continuity Institute, 2020). In one recent study, 94% of the Fortune 1,000 companies have reported disruptions within their supply chains as a result of COVID-19 (Ivanov, 2020). Initially the outbreak disrupted New Zealand’s supply chains that were exporting into or through China due to restrictions around travel and workplaces being closed in that country (Wu & McGoogan, 2020). However, as the virus began to spread globally, it significantly impacted export operations globally out of New Zealand. Another recent study conducted by the Business Continuity Institute or BCI (2020) featured 787 respondents in different industries, located in 93 different countries across the world. They found that organisations are experiencing and coping with COVID-19 differently, with some being able to respond quickly and efficiently by detecting the threats early when the virus was emerging, while other organisations have not been as well prepared for a disruption of this magnitude. The global 1 nature of COVID-19 has caught many organisations by surprise, with some having plans in place that were not thorough enough for a pandemic of this speed and scale. Assuming that organisations with a pandemic plan in place are more prepared for COVID-19 is logical, however, this is not always the case. The BCI survey showed that approximately 64% of those organisations who had plan in place, regarded it as being successful, while almost 14% claimed it was not. The remaining 22% were still unsure as to whether their plans had resulted in success yet. COVID-19 is defined by BCI as being a ‘Grey Swan’ disruption, predictable yet highly disruptive, but its rare occurrence means that organisations tend to overlook it and are not prepared for the impacts it may have on their operations.

In general, the severity of disruptions such as pandemics are increasing and are also occurring with shorter intervals between each (see Table 1). Prior to the early 2000s, pandemics occurred on average every three decades, while in the span of the last 17 years (between 2002 and 2019), five pandemics have been declared. This growing occurrence adds risk for businesses and their supply chain operations, especially those with the added characteristic of perishable commodities.

Table 1 - Timeline of pandemics with death tolls and intervals (LePan, 2020)

Year Name Death toll Interval since last pandemic 1889 ‘Russian’ flu 1 million 40+ years 1918 - 1919 ‘Spanish’ flu 40-50 million 29 years 1957 - 1958 ‘Asian’ flu 1.1 million 39 years 1968 - 1970 ‘Hong Kong’ flu 1 million 11 years 2002 - 2003 SARS 770 34 years 2009 - 2010 Swine Flu 200,000 7 years 2014 - 2016 Ebola 11,000 5 years 2015 - present MERS 870* (ongoing) 1 year 2019 - present COVID-19 3.1 million* (ongoing) 4 years

Whilst notable, pandemics are just one of many types of disruptions that impact global supply chains.

1.1.2 Supply Chain Disruptions

Supply chain disruptions can be defined as events that cause major breakdowns in certain parts of the supply chain, therefore impacting connections and other stages of the specific

2 supply chain (Elkins, Craighead, Blackhurst & Handfield, 2007). Where a disruption flows to other members in the supply chain, it is known as a cascading failure where stages downstream are impacted as a result of disruptions upstream in the supply chain. Atan & Rousseau (2015) make the point that even well managed supply chains are susceptible and can suffer from the events resulting from disruptions. One example of this is the Japanese earthquake in 2011 and resulting tsunami that had a profound impact on several automotive supply chains, including the highly agile supply chain of Toyota who were forced to cease their operations. Others were also impacted including Honda, Suzuki and Mitsubishi (Olson & Wu, 2017). The flow on affects were that automotive suppliers and production lines around the world stopped for significant periods of time. The supply chain disruptions can be caused by several different factors or events; however, they are generally characterized by a high level of uncertainty and will interrupt the regular flow of goods and services within the specific supply chain (Yu, Jacobs, Chavez & Yang, 2019). Disruptions can be classified in a few alternative ways. The three most common being rapid vs slow onset disruptions (Ivanov & Wendler, 2017; Van Wassenhove, 2006), natural vs manmade disruptions (Wagner & Neshat, 2010), and lastly, disruptions that are either internal to the firm or supply chain or external issues (Bode, Kemmerling & Wagner, 2013). Such disruptions can expose businesses to both operational and financial risks (Craighead et al., 2007; Yavari & Zaker, 2020).

Sheffi and Rice (2005) illustrate a disruption profile diagram that plots the eight distinct phases (see Figure 1). The length of the preparation phase can differ depending on the type of disruption, but regardless, it is the time prior to the event where a business can plan and prepare for disruptions. The disruption event itself is the second phase and it can range from several alternative disruptions with differing impacts. The initial impact of the disruption then occurs and in many cases this will either be the full impact immediately (rapid onset), or it may have delayed impacts (slow onset). Phase four is the reaction to the disruption with an initial response to control the situation and prevent any further losses where possible. Following this, the full impact then takes place and can affect the performance of a firm considerably. The sixth phase is preparation for recovery and is the transition from response to recovery. It can involve such actions as; using alternative suppliers, redirecting resources, establishing alternative transportation methods and utilising available resources to continue business processes. The recovery phase is about rebuilding or adapting. Here altered processes that have been operating for an extended period are replaced or changed back to somewhat

3 normal operations. Finally, long term impacts are common following severe disruptions, especially throughout the extended supply chain and can take some time to eventually overcome and return to a new normal.

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Figure 1 - The disruptive profile (Sheffi & Rice, 2005)

Each supply chain possesses different resources, product characteristics and resilience profiles and will respond differently to different disruptions.

1.1.3 Perishable Commodity Exports

Specific product characteristics such as perishability and necessity can increase the vulnerability during supply chain disruptions. Because perishable products require shorter lead times in optimal conditions, including temperature control and specialist handling, any disruption or delay will likely result in product deterioration and/or loss in part or whole (Yavari & Zaker, 2020). Also, products that are more essential to consumers such as water, milk, fresh produce and meat can increase the vulnerability during disruptions due to a surge in demand (see Figure 2).

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Figure 2 - Vulnerability of disruption impacts for different commodity products (Apte, 2010)

New Zealand is highly dependent on its perishable exports and quantities have grown exponentially in the last two decades, both via sea and air freight. The growth in commodity values over the past two decades show strong increasing trends across a wide range of exported perishable products (see Figure 3). Dairy and egg products have had a large increase in the twenty-year span, with a total value just under NZD$4.6b in 2000, to a total of over NZD$16b in 2019. Meat and offal products have also experienced considerable growth, increasing from NZD$3.7b in 2000, to just over NZD$8b in 2019. Other perishable products with steady increasing trends include fruit and nut products, fish and seafood products, vegetables and other miscellaneous perishable products (StatsNZ, 2019). The nation’s dependence on this sector partly relies heavily on the resilience of the GLB supply chains who are the critical links between point of production and point of consumption.

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Figure 3 - Value of New Zealand perishable exports by commodity per year ($NZD), data gathered from StatsNZ (2019).

1.1.4 Supply Chain Resilience

In response to various disruptions, the concept of supply chain resilience has recently emerged as a dominant theme and is now commonly discussed by researchers, businesses and Government organisations in response to an increased degree of uncertainty and risk surrounding both natural and man-made disruptions (Hosseini & Barker, 2016). The volatility within the current business environment for supply chain operations is high, meaning firms must build resilient supply chains to prepare, resist and recover from unexpected disruptions (Yu et al., 2019; Ali, Nagalingam & Gurd, 2018). Christopher & Peck (2004) define resilience as “…the ability of a system to return to its original state, or move to a new, more desirable state after being disturbed”. The implementation of resilience plans may be a critical factor in determining the ability for each GLB to mitigate losses and return to a normal state as soon as possible following a disruption. They can also assist in distinguishing the different ways that supply chains adapt and prepare for future disruptions. A recent BCI report (BCI, 2020) states that the COVID-19 pandemic has further raised the profile of organisational resilience and business continuity disciplines and demonstrated the importance it has on the success or survivability of a business. Two thirds of their respondents plan on increasing their investments on resilience within the organisation at all levels after experiencing the impacts of COVID-19.

1.2 Importance of this Research

As the COVID-19 virus continues to spread across the world, a growing concern and pressure builds on the current supply chain operations in New Zealand, but also questions the preparedness of supply chains for future disruptions similar to COVID-19. Climate and environmental changes, limitations to natural resources, geopolitical risks and rapidly growing populations are all key challenges that add to the likelihood of future pandemics, resulting in further supply chain disruptions (Pimentel et al., 2010). The increasing nature of food, water, air and soil pollution caused by chemicals and disease is resulting in a higher rate of the spread of diseases. Huff et al., 2015 also discuss that as the climate and environmental changes occur, interactions with ecology will differ, likely leading to new zoonotic diseases like COVID-19 emerging. These diseases have however been emerging for a long period of time, so it is hard to pinpoint the exact causes to being just climate and environmental changes (Huff et. al., 2015).

In terms of the current pandemic, a recent Institute for Supply Management (ISM, 2020) poll showed that 75% of businesses have reported supply chain disruptions related to COVID-19, with almost half of those admitting that they did not have plans in place to address such disruptions. In several cases, lead times for supply chains have doubled, many of those are caused by the shortages of air and sea freight options to transport product to the market. For several weeks following the outbreak, supply chains operating out of China came to a rapid halt, resulting in overflows of the capacity of ports and storage facilities. A large backlog of shipments were either redirected or held until active restrictions were removed. Sea freight transports approximately 80% of the worlds trade by volume and according to the United Nations, and China operates seven of the world’s 10 busiest container ports, with South Korea and Singapore also operating one each (UNCTAD, 2018). With Asia accounting for nearly two thirds of the global container trade, it leaves a rather large dependence on the region. Conversely, businesses that export products to these Chinese ports have also experienced issues during this disruption due to many workers in the industry being temporarily prevented from working to avoid the spread of the disease or through absenteeism (Paris, 2020). Shipments arriving at the ports were either not officially cleared by the Chinese Government, or alternatively, pick-up options were not available due to a shortage of labour (Paris, 2020). As population densities grow exponentially and globalisation becomes easier and more achievable, the intensity of outbreaks and disease cycles may also increase (Alirol, Getaz, Stoll, 7

Chappuis & Loutan, 2011). The increasing length and complexity of contemporary supply chains makes them difficult to regulate and manage, especially with Lean sourcing and JIT methods being commonplace among supply chains (Garnett, Doherty & Heron, 2020). It can often lead to a certain negligence towards the risks caused by external shocks or disruptions to the supply chain. Recent events have seen a growing awareness of the risks associated with extended global supply chains, a concentration of all manufacturing in one or two countries, the intractability politically of some trading partners, the growing need for a degree of self- sufficiency, a retreat to more regional trading arrangements and more traditional trading partners. Supply chains may soon see a significant shift towards near-shoring, local sourcing of goods, greater due-diligence and JIT supply chain models (Business Continuity Institute, 2020).

Statistics New Zealand provided a first glimpse at the initial impact on New Zealand exports by releasing provisional daily export trade data to China and other parts of the world (see Figure 4). Between 27th January 2020 and 23rd February 2020, they compared data of previous years to gather an understanding of the impact on New Zealand exports (StatsNZ, 2020). When categorising the losses within that period, meat exports were down approximately $110 NZD million (40% decrease), with export volumes also falling 20,000 tonnes compared to the prior year. The seafood exports to China also took a hit during this period, experiencing a 57% decrease, falling from $70 NZD million in 2019, to $30 NZD million in 2020 (StatsNZ, 2020). New Zealand currently exports around a quarter of their total exports into China, compared to only 5% back in 2003, showing how the dependence on these markets has drastically increased (Finance New Zealand, 2020).

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Figure 4 - Total cumulative values of exports between January 27th to February 23rd, (StatsNZ, 2020) 8

The increasing value and quantity of perishable exports contribute greatly to the New Zealand economy (see Figure 3). There is significant reliance on the flow and continuation of these supply chains in order for the economy to succeed. Prior outbreaks such as Ebola, SARS and now COVID-19 have had varying scales of disruption on these perishable supply chains within New Zealand. Because these pandemics are increasing in occurrence, it is crucial to understand, firstly, how these specific supply chains have suffered as a result, but also what resilience plans and adaptations they have utilised in order to reduce or overcome the disruptions impact on their supply chains.

1.3 Research Objectives

Given the context and the rationale outlined above, this research proposes to examine the impact of COVID-19 on perishable export supply chains in New Zealand. Hence, the key research objectives that will guide this thesis are:

1. Determine the extent of the impact of the COVID-19 pandemic on perishable export supply chains in New Zealand.

2. Identify the resilience plans and adaptations that Global Logistics Businesses (GLBs) and Carriers have implemented in order to overcome supply chain disruptions during the preparation, response and recovery phases of the disaster cycle.

3. Evaluate the initial effectiveness of these resilience plans and adaptations in the evolving crisis.

This research is structured as follows. Chapter 1 introduces the problem and the key research questions that guides this research. Chapter 2 will address the current literature drawn from the disaster management and supply chain resilience disciplines. Next, the Haddon Matrix will be introduced as the primary interpretative framework when examining perishable export supply chains. Chapter 3 will outline the methodology to be used within a case study approach. This approach supported with observations will be used as the primary data gathering mechanism in this research. Next, Chapter 4 is the results section where the findings from each case study of GLBs and Carriers will be presented. Chapter 5 provides a cross-case analysis and discussion of the findings with each respondent, comparing and contrasting the

9 impacts of COVID-19, as well as the plans and adaptations that have been utilised by these firms. Lastly, Chapter 6 the discussion chapter will re-visit the research questions and conclude the findings. Limitations and contributions will also be discussed, as well as any potential for future research.

2 Literature Review

The academic literature contains several relevant components to this research including disaster management and supply chain resilience. BCI (2020) reports on the response of global organisations to COVID-19 and is highly relevant. However, to-date the author has been unable to identify any academic publications or studies on the supply chain issues caused by COVID-19. It had been suggested that there is a scarce amount of literature that focusses on the impacts of outbreaks such as pandemics or epidemics on commercial supply chains (Ivanov, 2020). Therefore, this study draws on several disciplines to frame the literature review and research questions such as: disaster management, supply chain resilience, categorising disruptions, perishable supply chain disruptions, categories of preparedness and response, and the impacts of supply chain disruptions. Following this, the gaps in literature are then established, especially that there is little to no literature focused on pandemic disruptions or their impacts on perishable supply chains, as well as resilience plans or adaptations that GLBs utilise to counter these.

2.1 Disaster Management

To understand the nature of a disaster such as a pandemic, it is helpful to understand the stages or phases that occur during a disruption. As such, a key contribution to the disaster management discipline is the disaster management cycle of Safran (2003) as illustrated in Figure 5. This model is defined as a systematic approach that focusses on reducing risk and vulnerability. This specific cycle incorporates several classical management functions including planning, organizing, staffing, leading and controlling. The diagram shows the impact of the disaster and its management, that is a continuum of inter-linked activities. These major phases include the development or prevention phase, the disaster phase, the emergency response or transition phase and lastly, the recovery phase.

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Figure 5 - Disaster management cycle (Safran, 2003)

Similarly, Ivanov & Wendler (2020) depict a theoretical model titled the “Disaster Management Cycle” that refers to the four stages of disaster management. These four stages are: mitigation, preparation, response and recovery. Typically, in both models, mitigation comprises the actions taken (most commonly by the local Governments) in order to reduce the vulnerabilities of a disaster within a population and build the resilience of the infrastructure. Preparation is comprised of all of the measures that allow for the building of a strategy to ensure that the disaster response is rapid and effective. Next, the response phase features any measures taken immediately after the disaster event, both in regard to setting up provisional infrastructures, but also restoring basic services and providing support in a timely manner to those that have been impacted. Lastly, recovery relates to the actions taken to ensure that the restoration and recovery of infrastructure and the affected population is sustainable and efficient and able to cope with any future disruptions.

Van Wassenhove (2006) depicts an effective disaster management diagram that consists of five elements of preparedness (see Figure 6). These elements are human resources, knowledge management, process management, resources and community. Together, these elements constitute the disaster preparedness of a supply chain. Combining these elements with a disaster response creates an effective disaster management strategy. Understanding the likely events that could occur each of these phases helps formulate strategies to improve supply chain resilience.

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Figure 6 - Creating effective disaster management (Van Wassenhove, 2006)

2.2 Supply Chain Resilience

The idea of resilience is said to be when a system or supply chain has the ability to return to its original state, or a more suitable and desirable state after experiencing a disruption (Christopher and Peck, 2004). One important point to highlight is the difference between resilience and adaptability, two terms that are commonly misinterpreted. Adaptability results in the supply chain or operations for example, being altered or changed in order to function, whereas with ‘resilience’ a system will always attempt to revert back to its original state, or a more desired version of such (Ponomarov & Holcomb, 2009). Yet much of the published literature uses the term resilience that subsumes the concept of adaptability. Pettit et al., (2010) illustrate a model of increasing supply chain resilience by measuring vulnerability, as well as a certain set of capabilities that can help improve balanced resilience (see Figure 7). If a supply chain lacks the development of certain capabilities, they fail to reduce their vulnerability and exposure to risks. They propose that supply chain performance and resilience improve, where vulnerabilities and capabilities are balanced, as over investing in capabilities may cause an erosion of economic viability.

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Figure 7 - Measurement of resilience (Pettit et al., 2010)

Alternatively, Rose (2004) states that resilience can be looked at as having two different components: inherent and adaptive resilience. Inherent resilience consists of the characteristics that help businesses to soften or mitigate the impacts of disasters on their operations. It is also a function of the extant supply chain prior to any disruption, as some supply chains are inherently more resilient than others, simply by what was in place prior to the disruption. Adaptive resilience refers to the other factors, such as the active measures or decisions made by business owners, that in turn, create adaptability and open new business opportunities. Generally inherent resilience is more viable for larger, less vulnerable businesses, while adaptive resilience is defined by the author to be the “…ability in crisis due to ingenuity or extra effort”.

Another way to examine supply chain resilience is by dissecting each stage of the disruption or event and assess its effectiveness similar to the disaster management cycle. Hecht, Biehl, Barnett & Neff (2019) illustrate an alternate model that depicts ten factors impacting supply chain resilience before, during and after disruptions occur (see Figure 8). The first stage in the model is pre-event factors. The first factor in this stage is formal emergency plans and they are the plans developed prior to the disruption that can assist in managing operations during and after disruptions take place. Staff training is another crucial factor that relates to the extent that staff are trained, and protocols are communicated. This will have a significant influence on the effectiveness of response during a disruption.

The next stage within this model are the factors during the event or disruption. Staff attendance is critical to an organisations’ ability to operate. Expectations of attendance during disruption must be clear, as there may be exceptions when employee safety is threatened. Another factor in this phase is infrastructure redundancy that relates to whether disruptions impact infrastructure such as power, buildings or transportation. Having temporary or backup solutions can assist in the continuation of operations during disruption (i.e. dry ice or refrigerated containers). Inventory redundancy is another factor and is the stock on hand in advance of disruption and the ability for supply chains to restock. This can be very challenging for perishable supply chains to accomplish. Supplier diversity is having a diverse set of suppliers in case the primary option is compromised. If relying on only one supplier, it presents a greater risk. Lastly, backup service providers and location redundancy promote working closely with other firms or operations that provide similar services. This provides additional locations and services to utilise if primary options are no longer available.

The last stage of the model is the post-event factors. Insurance is the organisations’ coverage to assist when recovering from the disruption. Learning and adaptiveness is another important factor and is the organisation’s capability and desire to look back on how the disruption impacted their supply chain, as well as learning and adapting from it. This has a large influence on whether supply chain resilience improves or not. Finally, an organisation’s confidence in ability to respond is crucial for them to effectively respond to disruptions within their supply chain and execute their plan.

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Figure 8 - The ten factors that affect food system resilience (Hecht et al., 2019)

Each of these resilience models discussed in this section will have an influence within this research, with the aspect of use for each listed below (see Table 2).

Table 2 - Resilience models

Author/s and Model Aspects of use in research date

Petitt et al., Measurement Because resilience is such a crucial part in determining (2010) of resilience vulnerability and risk, assessing businesses on their supply chain resilience will assist in better understanding whether they were sufficiently prepared to withstand the resulting impacts of COVID-19.

Rose (2004) Inherent and Similar to above, understanding a supply chains resilience adaptive will help to also understand its vulnerability and risk. Both resilience inherent and adaptive resilience are crucial in reducing the vulnerability of disruptions.

Hecht et al., The ten factors The distinctive phases of pre-event, during and post-event is (2019) that affect food an aspect that will be used in the research when gathering system data from respondents. These phases will shape their resilience responses and the key information required to form a discussion.

2.3 The Haddon Matrix Concept

In order to frame this research and help interpret the results, this research has adopted the Haddon Matrix. The Haddon Matrix is a planning and assessment tool originally introduced by William Haddon to analyse several factors that affected traffic and medical safety injury and prevention (Anparasan & Lejeune, 2017). The Matrix identifies four factors within three different phases common to all events, helping to distinguish the issues or areas of interest within each phase. The factors featured within the Haddon Matrix are the host (human) factors, agent factors, physical environment factors and socio-cultural environment factors. It is hypothesised that these four main factors would also be relevant to any supply chain disruption (Anparasan & Lejeune, 2017). Alongside these factors are the stages that they occur in and these are the pre-event, event (during) and post-event. The Haddon Matrix is a practical, user-friendly development and planning tool that can help organisations to better understand, prepare and respond to disasters, similarly applicable to its original use for public health emergencies (Barnett et al., 2005). Other authors have applied this matrix in areas such 16 as the spread of influenza pandemics, emergency preparedness and drowning prevention (Barnett et al., 2005). As such, Anparasan & Lejeune (2017) identify the Haddon Matrix as being versatile in nature and widely applicable to many types of research, therefore it seems reasonable to deploy this matrix to help frame and interpret this research. As such, Table 3 below is the Haddon Matrix formatted template that will be used within this research.

Table 3 – The Haddon Matrix template

Phase Host (human) Agent Physical Socio-cultural environment environment

Pre-event

Event (during)

Post-event

2.4 Categorising Disruptions

2.4.1 Disruption Onset

To help understand the type and nature of disruption, it is useful to categorise them. Any disruption to a supply chain can be categorised as either having a slow or a rapid onset (Ivanov & Wendler, 2017). Munson (2013) mentions how supply chain disruptions are highly case dependant and the onset is often determined by the speed that they develop, as well as how it was triggered. Nonetheless, disruptions often have detrimental and severe impacts on the ability for supply chains to operate and perform optimally (Forbes & Wilson, 2018). Sudden or rapid onset disruptions are highly unpredictable in nature and occur with little or no warning (Ivanov & Wendler, 2017). There is high uncertainty surrounding such events, especially in regard to their timing, location and seriousness. Earthquakes, extreme weather events and other natural disasters are the more common types of rapid onset disruptions (Van Wassenhove, 2006). Munson (2013) discusses how sudden onset disruptions generally require reactive supply chain management due to resources such as time, money and labour being lost. Further, Kovacs & Spens (2009) describe sudden onset disasters as having strong negative impacts on the physical infrastructure of a specific area.

Alternatively, slow onset disruptions are more predictable in nature and allow for more time to distinguish the risk of the disruption, analyse supply chain implications, contracts, processes and inventory and demand profiles for adaptation (Munson, 2013). Van Wassenhove (2006) 17 states that slow onset disruptions evolve over a longer time period than that of rapid onset disruptions, such examples are virus outbreaks (focussed on by this thesis), drought or famine. Forecasting and planning are both viable options to overcome slow onset disasters compared to that of rapid onset disasters, as you have additional time to react and adapt (Kovacs & Spens, 2009). The next section similarly investigates the categorising of disruptions based on the associated risk factors and vulnerability.

2.4.2 Risk and Vulnerability Assessment

Another variation of categorising disruptions that is noticeable in literature is determining their risk factors and the level of vulnerability that supply chains have for specific threats. In terms of risk assessment, it is important to identify both the likelihood of an event occurring, as well as its likely impact on a business or its supply chain. Risk is commonly expressed by the following equation: Risk = Likelihood x Impact x Vulnerability. Liu, Tan, Fang and Lok (2012) assess an almost identical formula: Risk Rating (R) = Threat Rating x Vulnerability Rating x Impact Rating. This formula can be modified by building resilience into the equation: Risk = Likelihood x Impact x Vulnerability – Resilience (Inherent and planned). The original risk equation does express the likelihood of occurrence, the vulnerability of a business or supply chain and the impact or threat that may result, however, it lacks any consideration towards the resilience factors that a business or supply chain may have put in place that would ultimately result in mitigating the level of risk. By building resilience into the equation, it allows for a more realistic and accurate measure of risk.

Indeed, several studies illustrate similar diagrams to categorise risk and vulnerability assessment (Sheffi 2015; Oke & Gopalakrishnan 2009; Pettit, Fiksel & Croxton 2010). These diagrams utilise the same two characteristics: the probability or likelihood of a disruption occurring, and secondly, the severity of the impacts associated to the disruption. Oke & Gopalakrishnan (2009) deem an outbreak or pandemic to have a low likelihood of occurrence but to have serious, or even catastrophic impacts on a firm. Similarly, Sheffi (2015) mentions that epidemics tend to occur less than other disruptions but can have major detrimental impacts on supply chain operations. This ultimately determines a firm’s vulnerability to a variety of different disruptions, where high vulnerability equals severe consequences and a high likelihood of occurring, while low vulnerability equals light consequences and a low likelihood.

Alternatively, a Handbook of Disaster Relief (Rodriguez, Quarantelli & Dynes, 2007) discusses the factors that causes business vulnerability, and these include the physical location, operational conditions of the business and lastly, the business and community characteristics. Therefore, vulnerability features both physical and social dimensions that cause businesses to be susceptible to disaster impacts. On the other hand, Olson & Wu (2007) mentions that risk assessment and evaluation is an important part of the risk management process. It is said to consist of describing and quantifying the associated risks, estimating probabilities and risk significance, the level of acceptability of risk and lastly, the analysis of cost versus benefit. Outbreaks such as pandemics and epidemics are specific to this research and so they will be reviewed in the next section.

2.4.3 Outbreak Disruptions (Epidemics/Pandemics)

This research focusses on the impacts caused specifically by the COVID-19 pandemic; therefore, it is important to identify prior literature discussing both epidemic and pandemic outbreaks. Ivanov (2020) discusses the risk of epidemic disruptions to supply chains and illustrates the three components that distinctively characterize them. The first is its long-term nature and unpredictability; the next is its ability to spread almost instantaneously within the supply chain, but also within the population; and lastly, the major disruption it can have on supply, demand and logistics infrastructure. Furthermore, the author mentions that epidemics are quite unlike any other disruption because while the initial scale is small, it has the ability to grow quickly and disperse globally. Ivanov (2020) also discusses the turbulent environment that firms experience during epidemic disruptions as well as the common questions that these firms tend to ask. One common question is that it is very difficult for firms to know how long they can sustain disruptions like these, but also how long it will take for them to fully recover. Furthermore, it is within their best interest to establish their most efficient operating method during this time. This could involve operating with temporary shortages, utilising contingency plans, or reacting on a case-by-case basis, making changes as they see necessary. In the event of an outbreak or pandemic, supply chains would be interrupted, with global sourcing, distribution and production drastically reducing as a result of employee absenteeism and

Governmental interventions such as lockdowns or border closures (Von der Gracht & Darkow, 2013). Production operations would come to a standstill, as well as other regular supply chain operations, with both financial and commodity markets being impacted equally. Ying, Ash &

Sly (2007) state that in the occurrence of a pandemic, business operations would be threatened in several different ways. Some of these would include the health of employees, adverse effects on production and service, as well as significant impacts on demand. Certain businesses will be impacted more than others, such as essential products and services that are required on a daily basis.

Only a small number of publications look at prior outbreaks and their impact on supply chains. Johanis (2007) investigates the pandemic response plan that was developed for Pearson International Airport in Toronto following the SARS outbreak in 2003. Similarly, several papers focus on the Ebola virus and its impact on global supply chains (BCI, 2014; Büyüktahtakın, des- Bordes & Kıbış, 2018)). These publications individually describe what supply chains experienced during the Ebola outbreak and what was learnt. Frameworks on decision support were developed to help predict the impacts from outbreaks on supply chains, as well as assisting with coordination and policies around logistics and operations. The model developed by Büyüktahtakın et al., (2018) accounted for the spatial spread of the Ebola virus, while providing optimal resource allocation strategies. However, it was a quantitative study that had a core focus on minimising the total number of infections and fatalities. The author validated their approach and deemed it to be valuable tool for decision making.

2.5 Perishable Supply Chain Disruptions

When considering perishable commodity supply chains, there is an underlying level of complexity and vulnerability when operating in a normal state (Apte, 2010; Chaudhuri, Srivastava, Srivastava & Parveen, 2016; Madu & Kuei, 2017). Van der Vorst (2000) states several key characteristics including shelf-life constraints, extended production lead times, production seasonality, variability of production quality and quantity, conditional storage and transportation requirements, a need for traceability and lastly, restrictions around buffer stock. These characteristics not only add further complexity but are also drivers for heightened risk within the supply chain. Disruption to these operations can then further complicate certain points of the supply chain (Madu & Kuei, 2017) and any current vulnerabilities are then much more sensitive in such situations (Apte, 2010). In order to understand impact of disruptions on perishable supply chains, the preparation and response phases must be investigated.

2.6 Preparation and Response

In a survey based on the respondent’s organisational preparedness for COVID-19, approximately 90% of respondents stated that they were at least somewhat prepared, with just under 10% saying they were either badly prepared or extremely under prepared (BCI, 2020). The success of pandemic planning was also illustrated based on the type of plan used, with 56.8% of respondents stating they used a pandemic-specific plan that was successful, 48.8% using a successful generic plan and 11.7% without a plan that resulted in success. Although many organisations did have specific pandemic plans in place, multiple respondents stated that in fact, they built their plans around the consequences as a result, such as staff absenteeism. The same respondents were questioned on their organisational strategies and what best matches their plan. Just under 50% of respondents stated that they had been following Government advice and implementing that into their own strategy, while just under 38% of respondents stated that they had made their own strategies based on research and horizon scanning processes as well as pre-empted Government announcements. Furthermore, just over 8% of respondents were following Government advice where possible but had experienced some instances where that was not possible. A small percentage of respondents had either been forced to halt their operations or had chosen to as it was in their best interests. A wide range of preparation and response actions are present in the literature and they are categorised below (see Table 4).

Table 4 - Literature on preparation and response actions for supply chain disruptions Topic areas Author/s Key previous studies

Inventory Apte (2010) Discusses the difficulties when utilising buffer stock within control perishable supply chains to reduce the impacts caused by disruptions.

Tomlin (2006) Categorises inventory control as a proactive, operational mitigation strategy.

Sheffi (2015) Discusses optional assets such as spare inventory.

Oke & Gopalakrishnan Discuss the utilisation of safety stock to mitigate supply chain (2009) risks.

Sourcing and Tomlin (2006) Categorises sourcing as a proactive, operational mitigation supplier strategy. Perishable supply chain strategies are also relations modelled.

Atan & Rousseau (2015) Defines the importance of strategic and tactical responses such as managing suppliers.

Sheffi (2015) Discusses avoiding risk adverse suppliers that may be prone to disruptions, as well as alternative suppliers that provide backup options.

Acceptance Tomlin (2006) Defines acceptance as a passive approach where the risk is accepted.

Demand Wang & Tomlin (2009) Discuss advanced ordering to reduce demand risks when management suppliers are unreliable.

Sheffi (2020) Discusses the key drivers of resource allocation during a supply shortfall

Tomlin (2006) Categorises demand management as a reactive, operational contingency strategy. Perishable supply chain strategies are also modelled.

Production Atan & Rousseau (2015) Deem production processes and rescheduling of activities to processes be a crucial strategic and tactical responses to disruption.

Sheffi (2015) Discusses the importance of maintaining positive labour relations within the production process.

End-to-end Christopher & Lee (2004) Discuss end-to-end visibility as being the one key element to visibility mitigate supply chain risks.

Many firms are not sufficiently prepared for manging their operations in the wake of a disruption within their supply chain (Hendricks & Singhal, 2009). They should have the capabilities to be able to firstly evaluate the situation and follow it up by then addressing any resulting issues or impacts it may have had on their supply chain. Ying et al., (2007) alternatively discusses that many large businesses have continuity plans in place to manage natural or man-made disasters with localised, short-term impacts, however, they lack the plans that prepare for significant health, social or economic disruptions caused by a pandemic.

Sourcing and maintaining supplier relationships in order to reduce the impacts of disruption are common themes among literature. One paper describes managing suppliers as being a vital strategic and tactical response when attempting to mitigate the impact of disruptions on perishable supply chains (Atan & Rousseau, 2015). Alternatively, Tomlin (2006) categorises sourcing and supplier management as a proactive, operational mitigation strategy. Sourcing strategies are deemed to be rather reactive to shortages and could include fall-back suppliers (dual sourcing). Alternative strategies are also modelled for perishable supply chains and include supplier diversification (sourcing from multiple suppliers) and contingent sourcing (change of supplier during a disruption). Sheffi (2015) adds that this can also involve avoiding prone, risk adverse suppliers and having backup options prior to disruptions occurring. BCI (2020) also found that customer and supplier communication is a crucial factor in an organisation’s crisis response. In one of their surveys, they found that many respondents did get in touch with their customers and suppliers in a timely manner before COVID-19 began to impact operations. 79% of respondents made their stakeholders aware of the newly proposed actions during the pandemic, while just under 10% of respondents did not. Some organisations did however admit that their responses and communication with their stakeholders was slow for several reasons including: waiting on the Government to provide guidelines before advising their customers and suppliers; they were worried about being the first in the industry to make such announcements that could put them in a vulnerable position; or lastly, external communication was not a priority in the response phase.

Inventory control is another preparation or response action that is commonly referred to in literature. It is defined as a proactive, operational mitigation strategy, comprising of the decisions around ordering and stocking in a proactive manner (Tomlin, 2006). The utilisation of buffer or safety stock is one aspect of this that is often discussed. Sheffi (2015) describes

23 spare inventory as an optional asset that can be utilised by firms in order to respond to disruptions. Similarly, Oke & Gopalakrishnan (2009) suggest the utilisation of safety stock in order to mitigate supply chain risks. Apte (2010) clarifies that although inventory control can help to prevent and reduce the impacts of disruption, this is not the case for all supply chains, including those with perishable products. This is due to these supply chains generally operating JIT to reduce the time that perishable products are in less-than-optimal conditions.

Demand management is another aspect that is discussed in literature. Tomlin (2006) categorises demand management as a reactive, operational contingency strategy. Wang & Tomlin (2009) back a strategy of advanced ordering by customers in order to help reduce the demand during supply chain disruptions or unreliable supply. Again, this strategy would be viable for products with long shelf lives, but the same cannot be said for perishable products operating on a Lean supply chain model. Demand switching (enticing customers to buy alternative products during a disruption) and product substitution (demand management) are more alternative strategies that were modelled specifically for perishable supply chains to overcome disruptions (Tomlin, 2006). Alternatively, Sheffi (2020) considers six realistic tactics for managing demand when supply shortages are present during a disruption. These tactics include: Favouring the larger or more important customers, taking care of the vulnerable customers, treating every customer equally, altering products, shaping demand through pricing changes, or lastly, maximising short term profits by auctioning resources. Each of these six tactics introduce varying risks and rewards, however, before being utilised, the author suggests that the specific organisation should consider both the scope of the analysis as well as its time horizon (see Figure 9). It is important to understand how each decision will affect the organisation itself, but also their customers, both in the short term and long term. The scope can be driven by the impacts on the organisation such as their profits, market share or even reputation, or alternatively, the impacts had on their customers, such as their health as a business in order to survive, long-term value or ethics. Regarding the time horizon, the focus can be either on maximising short-term outcomes such as surviving or making instant financial returns, or on the other hand, focussing on the long-term such as the organisations strategic goals or mission.

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Figure 9 - Drivers of resource allocation during supply shortfalls in a disruption (Sheffi., 2020)

Other research states that firms can reduce the likelihood of disruption by improving their compliance with regulations and being responsive to social concerns, avoiding high risk locations prone to disruption (i.e. unstable countries or flood plains) and lastly, implementing security, safety and quality measures (Sheffi, 2015). Atan & Rousseau (2015) deem that production processes and the rescheduling of activities are crucial strategic and tactical responses toward disruptions. This can also involve maintaining positive labour relations with the employees (Sheffi, 2015). End-to-end visibility is another key element that is deemed to mitigate supply chain risks (Christopher & Lee, 2004). Lastly, the acceptance strategy is simply when a firm accepts any related risks to the disruption, doing nothing to protect themselves against the disruption itself, or the associated costs. This strategy is generally favourable when the costs of coping with a specific disruption are higher than that of the losses when accepting them (Tomlin, 2006).

2.7 Impact of Supply Chain Disruptions

A high proportion of perishable supply chains function on a just-in-time (JIT) basis, intentionally keeping their inventories low so that commodities arrive almost immediately prior to consumption (Beck et al. 2006; Snyder et al., 2012). While performing rather efficiently in normal circumstances, it creates greater risk and increase the vulnerability of supply chain operations when disruptions do occur (Snyder et al., 2012; Garnett et al., 2020). Huff et al., (2015) found that 80% of food is delivered through global supply chains with the priority being on low cost and high efficiency. Many firms operate global supply chains in order to seek potential advantages in overseas markets including the outsourcing of labour, risk 25 diversification, market expansion. Snyder et al. (2012) agreed and added that because supply chains are increasingly global, with suppliers in many cases located throughout the world, it increases instability when a disruption occurs. Aboah et al., (2019) makes the point that risk has not been mitigated when firms disperse their operations globally, but rather, commodity chains have become somewhat increasingly vulnerable. Luke & Rodrigue (2008) discuss the large dependence that food supply chains have on transportation methods, as well as the associated vulnerability. During supply chains disruptions such as a pandemic, these transportation methods can shut down and cause major issues when freight needs to move, especially when perishability is a factor.

Ying et al., (2007) assess several impacts on businesses arising specifically from pandemic disruptions. Firstly, movement restrictions and quarantines are likely to disrupt supply chains, especially those operating JIT inventory as mentioned earlier. Another possible impact is the loss of essential public services such as power, water and even communication, resulting in a large reduction in productivity or even closure to some businesses. Finally, social distancing requirements may be put in place, causing many retailers and close contact businesses to close.

Worker absenteeism is another factor that can cause issues within a supply chain during a disruption. This impact can be felt right throughout any supply chain, from the production and manufacturing phase, right through to transportation and delivery. Any global food chain is highly dependent on the people that run the operations, so without an existing and healthy workforce, supply chains will operate well below optimal capacity and could shut down altogether (Forbes & Wilson, 2018; Hessel, 2009; Huff et al., 2015). Ying et al., (2007) estimates that an absence of 40% of employees will impact all the integral parts of a business’s operations.

2.8 Gaps in Literature

Overall, the literature on disaster management (Safran, 2003; Ivanov & Wendler, 2020; Van Wassenhove, 2006) and supply chain resilience (Pettit et al., 2010; Hecht et al., 2019) provides the theoretical framework for this research. Although they lack detail for perishable supply chains and the impacts caused by pandemic disruptions, these foundations of literature do help to evaluate several key ideas behind the ways that firms and their supply chains mitigate and respond to disruptions and their associated impacts. The ‘Disaster management cycle’ by

Safran (2003) and the three strategic categories for managing supply chain disruptions by Tomlin (2006) are both highly relevant to this research. Also, both Pettit et al., (2010) and Hecht et al., (2019) model highly relevant diagrams that illustrate measurements of supply chain resilience and factors that affect it. These are incorporated into this research.

Ivanov (2020) comments on the scarcity of literature that focusses on the impacts of outbreaks such as pandemics or epidemics on commercial supply chains. The evaluation by several papers on the impacts of the Ebola virus on global supply chains were somewhat relevant, however, these lacked any detail into perishable supply chains. Huff et al., (2015) provide good insight into disruptions caused by pandemics and how they impact food systems, however, this study has a clear focus on domestic supermarket supply chains in the USA rather than perishable exports out of New Zealand. Apte (2010) demonstrates the vulnerabilities of perishable supply chains to disruption, however, this is a broad study that focusses more on product contamination rather than outbreaks. Another publication reviews the pandemic response plan developed for Pearson International Airport in Toronto following the SARS outbreak in 2003 (Johanis, 2007). Although it is relevant regarding the pandemic response, this research is based on all freight handled by the Canadian airport, rather than solely on perishable exports. The degree of globalisation and the role of China in global supply chains has also drastically changed, as well as the impact of SARS very minimal compared to that of COVID-19.

The report by BCI (2020) provided an insight into how organisations all over the world, planned and responded to COVID-19. This illustrated different ways that organisations reacted to the events and the ways they can improve for future disruptions. The gap in this literature was that it involved a variety of organisations in different industries based all over the world, whereas this research is solely focussed on New Zealand GLBs exporting perishable products to overseas markets. Several categories of preparation and response towards supply chain disruptions were also evaluated in Table 4, with a few key studies and topic areas being highlighted. A small amount of literature provided versatile and flexible strategies and responses that can be utilised within any supply chain, including those that feature perishable commodities. Inventory and demand management are difficult to control when perishable products are involved in supply chains, especially considering many perishable products are deemed essential products (meat, fruit, vegetables and dairy). One area that may be lacking in this section is the temporary, ad hoc decisions or actions made by firms when such

27 disruptions occur. The literature also covers on a wide range of disruption impacts, especially on perishable supply chain operations, however, these impacts will differ highly based on the type of disruption that occurs and the environment or country where the disruption takes place. Because this research is different to any other piece of prior literature, it may result in new impacts being identified, as well as innovative preparation and response strategies being utilised by firms.

In conclusion, there are relevant theoretical frameworks provided within the available literature, however, there is only a small amount that focusses on the core research objectives of this paper. There is a lack of research based in New Zealand that reports on pandemic disruptions or their impacts on perishable supply chains, as well as resilience plans or adaptations to counter them. Therefore, this thesis will aim to accomplish a distinction in this field of study by: Examining the extent that perishable export supply chains in New Zealand have been impacted as a result of the COVID-19 pandemic; identifying resilience plans and adaptations that GLBs have implemented in order to overcome supply chain disruptions during the preparation, response and recovery phases of the disaster cycle; and lastly, evaluating the initial effectiveness of these resilience plans and adaptations in the evolving crisis.

3 Methodology

This research aims to determine the extent that perishable export supply chains in New Zealand have been impacted as a result of the COVID-19 pandemic; identify resilience plans and adaptations that GLBs have implemented in order to overcome supply chain disruptions during the preparation, response and recovery phases of the disaster cycle, and lastly, to evaluate the initial effectiveness of these resilience plans and adaptations in the evolving crisis. Given the novelty of these research questions and the current fast evolving context, qualitative data will be collected through the case study method (Yin, 1986) and applying a phenological lens through which the phases of the pandemic can be studied.

3.1 Research Design

The main approach used for this research is the case study method due to the data being both qualitative and exploratory in nature. This will be the most practical approach for this type of research. Yin (1986) and Chetty (1996) both discuss a case study as being a type of research that measures and assesses human behaviour instead of just the verbal information obtained. Case studies help to investigate current events or occurrences while also allowing for a wide range of sources of information to be applied (Yin, 1986). Alternatively, Chetty (1996) describes how the use of case studies can provide a greater understanding of the real-life situations occurring daily, therefore offering a holistic view on the matter. Miles & Huberman (1994) explain that qualitative case studies that look at a range of similar and contrasting cases can portray a clearer overview of the specific topic. This then helps to specify how and why the behaviour is like it is (Yin, 1986). This approach will be highly applicable regarding the scope of this research, data collection and analysis.

3.2 Scope of the Research

This research will focus on GLBs that are licensed to export perishable products out of New Zealand to international markets, either via air or sea freight, as well as the key air and sea Carriers. These GLBs are based in the two cities with major throughput of both perishable air and sea freight exports in New Zealand, Auckland and Christchurch. The Carriers also operate out of both of these locations. Furthermore, Christchurch has experienced several notable disruptions in the last decade, including major earthquakes and a terrorist attack, illustrating its importance to feature within this research. In this instance, this research proposes to use multiple case studies based on different GLBs and Carriers and delve deeply into their plans, 29 response and adaptations. By interviewing various GLBs and Carriers, it provides a more extensive and accurate image of the industry and outlines common trends in each of the phases including planning and the response to the disruption, as well as any adaptations that are made throughout.

3.3 Data Collection

The data collection phase of this research will involve interviews with several GLBs and Carriers within each of the case studies. These interviews may either be conducted at the respondent’s facilities face to face, or over the phone due to the ongoing COVID-19 social distancing regulations. A semi-structured questionnaire with a guide protocol will be used during the interviews. This means that the respondents will firstly be asked a few questions about their organisational background and role within the business to understand the demographics of each respondent. Next, a starter question surrounding the impact of COVID- 19 on their supply chain will be asked in order to prompt the conversation. Using prior knowledge from the literature review chapter about supply chain disruptions, further questioning can be prompted where necessary. The areas of interest for these interviews will include preparation, initial response, response post-disruption and lastly, evaluation and adaptation. A digital voice recording device will also be used with permission, allowing for the respondent’s answers to be in full and making the transcribing and analysing of data more straight forward and accurate.

The use of personal interviews for this thesis has many advantages. Firstly, Sekaran & Bougie (2016) state that the use of personal interviews allows for an increase in willingness to participate in research, with far higher response rates. Furthermore, interviewers have the ability to clarify or aid respondents with any questions or confusion they have at the time of the interview. However, there are also number of restraints associated with personal interviews and some of these include time, costs, geography and confidentiality. It is likely that time restraints may be a factor for respondents considering that COVID-19 will have ongoing impacts on their operations for some time to come. In order to overcome this, date and time slots will be allocated to respondents that fit their schedules and interviews will be kept under 40 minutes to limit time restraints. Cost and geography restraints will be very low considering the respondents in both Auckland and Christchurch are located within a small

30 proximity to one another. Finally, each respondent’s confidentiality is assured prior to the interviews with the use of consent forms that will be provided.

3.3.1 The Haddon Matrix

A hypothesised Haddon Matrix constructed from the literature review is presented below in Table 5 and will be applied to the COVID-19 disruption. The host factors of the Haddon matrix were originally identified as being ‘…the person who is susceptible to injury’ (Anparasan & Lejeune, 2017), however, within this matrix the host factors are represented by the global supply chains of GLBs exporting perishable products. Similarly, the agent factors were originally identified as being the ‘…primary cause of occurrence of an event’ (Anparasan & Lejeune, 2017), but in this case they are represented by the disruptions resulting from COVID- 19. The physical environment factors are associated with physical assets, labour, built environment and information technology (IT). Alternatively, the socio-cultural environment factors are associated to the relational climate of inter-organisational links. This specific matrix aims to provide an early indication of the types of factors and sub-factors that are specific to each phase within a pandemic disruption. All cells within the matrix represent distinct strategies or concepts that assist in preventing, responding to, or mitigating pandemic disruptions to a supply chain. Each of these factors were obtained from available literature that had a core focus on the response of GLBs or supply chains to disruptions. Subsequently, once the primary data has been collected, a revised Haddon matrix will then be presented to provide a more accurate representation of the factors that have emerged from the data for each phase of the COVID-19 disruption. Thus, providing a novel view of pandemic disruptions to fresh produce supply chains. A hypothesized Haddon Matrix is presented in Table 5 below.

Table 5 – A hypothesised Haddon Matrix applied to COVID-19 disruption response

Phase Host Agent Physical environment Socio-cultural (Global Supply Chain - GLB) (COVID-19 (Physical assets, labour, environment disruptions) built environment, IT) (Relational

climate of inter- organisational links)

Pre- - Risk assessment - Awareness - Resilient or backup - Multiple (Kleindorfer & Saad, event toward prior infrastructure options sourcing in the 2009) pandemics and including capacity and presence of the associated storage, inventory and disruption risks

- Contingency plans in risks IT (Hecht et al., 2018) (Namdar, Li, place (Ivanov, 2020) Sawhney &

- Mitigation of Pradhan, 2017) - Monitoring of potential potential disruptions (Hecht et al., disruptions - Communication 2018) (Hecht et al., with suppliers, 2018) customers and - Staff training, testing of Governmental plans and maintenance organisations (Morton, 2002) (Hecht et al., 2018)

Event - Execution of response - Efforts to - Availability of public - Staff (during) plan (Hecht et al., 2018) reduce the infrastructure such as expectations initial impacts power, water and (Hecht et al., - Resource allocation of the transport (Hecht et al., 2018) during supply shortages disruption 2018) (Sheffi, 2020) (Hecht et al., - External 2018) - Functional organisational - Monitoring areas that communication and support (Hecht need primary attention technology systems et al., 2018) (Hecht et al., 2018) (Hecht et al., 2018) - Government - Top-level management policy and fiscal (Hanna, Skipper & Hall, support (Liu, 2010) Lee & Lee, 2020) - Collaboration and alignment of supply chain - Governmental partners (Hanna, Skipper guidance and & Hall, 2010) information

Post- - Rebuilding and repair of - Efforts to - Application of - Flexibility of event infrastructure (Hecht et reduce or feedback or relationship al., 2018) mitigate the evaluation to building including long-term or safeguard new suppliers and - Feedback and evaluation delayed infrastructure customers (Hecht of response to improve impacts (Hecht (Hecht et al., 2018) et al., 2018) for future disruptions et al., 2018) (Macdonald and Corsi, - The utilisation of IT - Supply chain agility 2013) (Hanna, Skipper & and adaptability Hall, 2010) (Eckstein, Goellner, Blome & Henke, - Geo-spatial 2014) distribution of assets

3.3.2 Interview Protocol

An interview protocol has also been designed to assist with the data collection phase (see Appendix A). This protocol has been modified from prior research based in Baltimore that looked at the urban food supply chain resilience for crises threatening food security (Hecht et al., 2019). These specific modifications involved integrating the aspects of the Haddon Matrix, helping to produce a new model that is structured around the phases and factors that impact supply chains. Firstly, the GLB’s background information is established to gain more of an understanding of the respondent’s role within their organisation, as well as the size and operations of each GLB. The first phase of the disruption, or the ‘pre-event’ will then be explored, with several questions being asked regarding the GLBs preparedness and their formal plans in place to address such disruptions. This will provide an industry wide picture of the different approaches leading into COVID-19 that ultimately will determine their outcomes post-event. Next, the Agent will then be examined, helping to gain more of an idea around the impacts on perishable exporting operations in Christchurch during COVID-19. Furthermore, the success of plans will be determined including any adaptations that were utilised by GLBs and Carriers in an attempt to mitigate the disruption to their supply chains. This includes their supply chain relationships with suppliers, customers and other stakeholders and how they were impacted. Lastly, the post-event will show what operations look like after the disruption has occurred, including whether resources such as infrastructure need repairing, or new relationships are required due to losing stakeholders. It is suggested that this step is a good way to assess the preparedness and response of the GLBs / Carriers and establish whether what they had in place was sufficient to endure the disruption or not. Understanding what the

GLBs would do differently, but also what worked and what they would do the same again, is a crucial part of evaluating the responses of each GLB.

3.4 Data Analysis

On completion, each of the interviews will then be transcribed verbatim from the voice recording device and summarised in the Results Chapter. The analysis of the data involves seeking both commonality and variability across all the interviews that take place. In the Discussion Chapter, all the responses will be compared and contrasted with each other in order to gain an overall image of the impacts caused by COVID-19 on perishable export supply chains in New Zealand, as well as the industry-wide approaches that were utilised. This will allow the research to highlight both mutual and unique impacts experienced by the GLBs, as well as the approaches that were implemented. Following on from this, the success of each approach will be evaluated and its ability to be implemented by other GLBs. Finally, propositions will be formed to help prepare GLBs for future disruptions within their perishable supply chains.

3.4.1 NVivo 12 Analysis

The NVivo 12 software will be used as a core method of data analysis for this research. This software is a tool that helps to code and derive the key categories and themes that emerge from the interview transcripts collected in the data collection phase. Once the interviews are transcribed, they will then be condensed, displayed and analysed using NVivo 12. In order to do this, the transcripts are imported into the NVivo source section and then an interpretation framework and method is formed. This will be achieved by considering the research questions, interview protocol and other specific literature before generating the initial nodes. These nodes act as folders where each piece of data is gathered and stored with other pieces of similar data to generate specific themes. The first nodes to be created will be the pre-event, event and post-event phases of the COVID-19 disruption. These are sourced from the Haddon Matrix template. The secondary nodes will then be created within each of the initial folders and these will be the host, agent, physical environment and socio-cultural environment, also sourced from the Haddon Matrix template. These parent nodes will help to build on specific themes.

The next step in the NVivo-12 process is examining the data. The researcher will read over the interview transcripts several times in order to become familiar with the data. Data familiarisation will allow for greater insight into the themes that are generated from the analysis. The automatic coding function on NVivo will not be used in the data analysis of this research as manual coding will assist in familiarisation of the data. Under each of the initial nodes, broader material will be drawn from the interview transcripts and created as child nodes under the parent nodes. As the data coding phase progresses, these initial child nodes will merge with other relevant nodes, building stronger child nodes as a result. By the end of the coding process, the broad child nodes will be integrated and condensed into only a small number of specific themes. This is the integration phase of analysis. Flowcharts are also utilised within this phase as a display tool to depict each of the linkages between the parent and child nodes. These are presented in the cross-case analysis chapter.

3.5 Methodological Issues

3.5.1 Research Bias

All types of research are prone to a certain degree of bias, whether intentional or unintentional. This can cause false conclusions or mislead the readers with inaccurate findings within a specific topic. Bias is defined as being a deviation or trend from the truth within certain data, analysis, interpretation or publication, that in turn, leads to a misconception (Simundic, 2013). Researchers therefore have an obligation to be aware of the sources of bias that exist, including their own influence on the research (Researcher bias), as well as taking the necessary actions in orders to minimise any deviations from the truth.

Another type of bias that could be relevant to this research is recall bias. This study relies on respondents being questioned on events that have occurred in the past meaning they must be able to recall the events that have taken place accurately. Some events may be easier for them to remember and describe while other may not be so straightforward. This creates a form of bias within the research, however, because COVID-19 is an ongoing current event, it should make it easier for respondents to recall events as they have occurred recently.

Another example of bias that is common for research such as this is publishing bias. This type of bias relates to research that is only published if it results in a positive outcome or in other words, an outcome where there are significant findings established. These such findings are far more commonly published compared to those that do not have significant findings as they

35 are deemed to be more interested to the readers. However, it can create lapses and skew the audiences understanding of the specific topic. This research will present the findings only as defined by the data in the expectation that even non-significant findings will add to the knowledge base.

3.5.2 Research Validity, Reliability and Objectivity

The validity, reliability and objectivity of research are crucial in verifying its authenticity and legitimacy amongst other academic literature. Deliberation must not only be given to the results obtained in a study, but more importantly, to the rigour of the research itself (Heale & Twycross, 2015). This refers to the extent that a researcher enhances the quality of the research through the use and measurement of both validity and reliability. Validity is said to be the accuracy of measurement towards a certain concept within qualitative research. Alternatively, reliability is defined as the accuracy of an instrument, or the consistency of results when utilising a research instrument within a specific situation (Heale & Twycross, 2015).

Gasson (2003) supports this by discussing four measures that correspond to the credibility and rigour of qualitative research. These measures are credibility (internal validity), transferability (external validity), dependability (reliability), and conformability (objectivity). The table below clarifies each of these measures, but also outlines the steps that are taken to improve the quality of this study.

Table 6- Measures for research validity, reliability and objectivity

Measures Steps taken Internal validity a) Ten case studies were used in the research, providing a well- How rigour is ensured established and knowledgeable field of respondents. in the research Furthermore, some case studies featured multiple respondents process to gain better insight. b) Respondents had the option of withdrawing from the study at any time. c) Each respondents was established prior to the data collection phase. Some of which were utilised in prior research. External validity a) Each of the case studies are achieved in relatable conditions, Application ability of therefore enhancing the transferability of this research. research findings to other contexts or real world scenarios Reliability a) The interview protocol was modified from prior research (Hecht Consistency and et al., 2019) to collect the data. This protocol features concise longevity of research questions about the disruption and a list of prompt questions to findings be used during the interviews. b) The respondents are assured of their confidentuality to allow for them to provide detailed information without any repecussions. Objectivity a) Direct quotes said by the respondents are used within the results The findings should and discussion chapters. represent the situation rather than beliefs or researcher bias

An important point to add is that having a wider scope would require significantly more time and resources and is beyond the scope of this study. The next chapter will present the results of the data gathering phase of this research.

4 Results

4.1 Chapter Introduction

In this results chapter, ten case studies are completed on GLBs and Carriers based in Christchurch and Auckland, with some respondents being national managers of their specific firm. The sample included two shipping lines and one airline who operate global supply lines out of New Zealand, transporting perishable commodities to international markets. These case studies will provide an overview of the impacts that COVID-19 has had on perishable export supply chains in New Zealand, as well as depicting the underlying strategies and adaptations that GLBs have utilised during the disruption. This chapter will introduce each individual case study in turn and the key themes that have emerged for each will be presented by phase (pre-event, event and post-event) in the following.

4.2 Case Study 1 (GLB1)

4.2.1 Case Introduction

As a global logistics provider and freight forwarder, GLB1 structures their business under three key pillars: Transport, Warehousing and Air & Ocean (A&O). With over 40 years operational experience in New Zealand, GLB1 have since expanded their business globally into Australia, Europe, Asia and the Americas. In 2019, their annual revenue totalled $2.95b, with over 8,000 team members employed globally.

The focus of this study will be on the A&O operations of GLB1’s business; specifically, the perishable products that they export out of New Zealand to international markets. The Christchurch branch comprises of both air and sea freight services, with 35 team members spread across these operations. The annual air freight volumes for this branch consist of approximately 90% perishable products, while for sea freight this is substantially lower at approximately 5%. On average, GLB1 exports 180 tonnes of perishable products per week via air freight. These perishable products include seafood such as clams, lobster, crayfish, tuna, salmon, as well as meat, fruit and a small volume of vegetable products. When measuring the volumes of sea freight, the business usually does this by 20-foot equivalent units (TEU). This is basically a 20-foot container, whereas a 40-foot container would be considered 2 TEUs. As an approximate figure, GLB1 export around 12,500 TEU annually, with 5 – 10% of this being perishable products. This equates to around 600 – 1,250 TEU or 20-foot containers of

38 perishable products being exported by GLB1 per year. These products consist of frozen seafood, chilled melons, frozen bulbs and beer hops.

Below are the respondents featured within this case study, as well as their role, experience within the firm and responsibilities associated to their specific role:

Table 7- GLB1 respondent information

Respondent Role Experience Responsibilities with GLB1

Respondent A A&O Christchurch 18 years Oversees air and sea freight operations out Branch Manager of Christchurch

Respondent B National Sea Freight 20 years Part of GLB1’s global procurement team. Pricing Manager Securing shipping contracts and ensuring the sales team have a product to sell and vessel capacity year-round.

Respondent C A&O National 30 years Oversees perishable operations in Auckland, Perishable Manager Wellington and Christchurch. Provides advice to branch managers at each facility

4.2.2 Case Results

4.2.2.1 Pre-event

4.2.2.1.1 Preparation, Planning and Responsibility

When asked if GLB1 was prepared for the COVID-19 disruption, two of the three respondents believed that the business was not sufficiently prepared, while Respondent C was adamant that they were “as prepared as any other logistics business” and did have adequate preparations in place. GLB1 did have business continuity plans (BCP) in place, as well as Risk Organism Response Plans (RORPs) as required by the Ministry for Primary Industries (MPI). According to Respondent A, these plans were implemented in response to outbreaks such as Hand, Foot and Mouth Disease (HFMD), but they have been “applicable in some cases when responding to the COVID-19 pandemic”. There were also BCPs in place for natural disasters including further earthquakes in Christchurch. Ying et al., (2007) also found that most businesses utilise BCPs for natural disasters, however, lack plans that prepare them for 39 disruptions such as pandemics. As shown here, this is the case for GLB1. These plans involved having certain resources accessible such as power generators, company phones and laptops, but also allowing for account managers and certain employees to work from home (WFH), where possible. Because earthquakes are commonly a regional scale disruption, GLB1 have had the ability to send employees home or relocate them to other branches. As an example, during the Christchurch earthquakes in 2011, Respondent B stated that they arranged for team members from Auckland to be sent down to assist in terms of the clean-up, recovery and movement of products. Although GLB1 has established facilities throughout New Zealand that can be used to relocate to during regional disruptions, COVID-19 impacted their operations globally, so this was not a viable option. GLB1 also can set up temporary depots in the wake of disruptions and this was a reality during the Kaikoura earthquakes in 2016. Respondent B commented that “a makeshift depot was set up near Picton at Spring Creek due to there being no access to the railway and State Highway 1 being shutoff”. By setting up a makeshift depot, it allowed them to move products into Spring Creek and then transport shipments through the inland route. This temporary depot has now been transformed into a permanent facility due to its success. After the earthquakes, GLB1 shifted their operations to a new facility that included upgraded and additional racking space, while also making changes to their health and safety plans.

Global pandemics or epidemics were not a disruption that GLB1 were expecting or planning for, however, this was not detrimental to their preparation. Respondent C stated that “it is easy to be overly prepared the day after the disruption occurs and then the key will be maintaining that level of preparedness”. An example given by the respondent was that if you asked Christchurch households ten years ago whether they had an emergency kit in the event of an earthquake, a high percentage would say no, yet if you asked them today, they would answer yes. It is similar to if you asked the industry today if they were prepared for the pandemic after it has happened.

Respondent B discussed how GLB1 had performed disaster recovery preparation for their main IT servers as a precaution for access issues, however, they had not prepared for a “sudden increase in access to the server from remote internet protocol (IP) addresses, rather than access always being from within one warehouse”. GLB1’s main servers are in Chicago, but they run duplicate back-up servers in New Zealand. In the likelihood that connection is lost to the servers in Chicago, it allows GLB1 to operate remotely from their back-up servers

40 in New Zealand. Respondent B discussed how the business operates a mirror server that stores all their data that they need in an offline server and is backed up every 24 hours. Given that the business is almost paperless, all the data stored on their servers is crucial to them being able to function. International freight is document heavy, so moving to a paperless model means that GLB1 must store everything, in terms of shipping or commercial documents for customers, as well as any documentation for regulatory bodies.

When discussing who has the primary responsibility for emergency planning and response within the business, Respondent B stated that “each branch manager has the responsibility in terms of their site”. When a branch is set up, they must ensure that they have sufficient storage and loading space for containers. This allows for the branch to be more lenient with their customers and provide additional storage if required. Within the business, a National Training Centre team help to coordinate a national response in terms of making sure each branch is aware of what needs to be considered, or compliances that should be followed. Guidelines may also be released and then then it is up to the individual managers to ensure that they are doing the right thing by their team members and customers. Supply chain specialists including operations, purchasing and logistics within GLB1 are not involved in the emergency planning or response stages. Although each employee within the business has a voice and encouragement is involved, it was not something that was accomplished or thought about until after the COVID-19 disruptions occurred.

4.2.2.1.2 External Involvement

GLB1’s plans did involve external organisations including an Air New Zealand and Menzies Aviation who operate both cold store facilities in Christchurch available to exporters prior to the products being loaded on to aircraft. GLB1’s suppliers and customers were less involved in their plans, however, some had their own separate plans in place, while others did not have any plans at all in place for COVID-19 or other disruptions. According to Respondent C, GLB1 does have “an informal agreement with another freight forwarder about sharing facility space in the event of an isolated COVID-19 outbreak”. This initiative began before the pandemic but has carried over during the current disruption. Although each business has control over temperature inspections and hygiene measures, if GLB1 had a positive case of COVID-19 within their branch, the facility would be closed and out of action for at least two weeks. With this initiative, it allows GLB1 to work externally at another freight forwarders facility if faced

41 with this specific problem. In terms of the export sea freight side of the business, Respondent B stated that all their customers are responsible for certifications in terms of phytosanitary or food safety certificates. There are documentary or regulatory requirements in terms of exporting products to specific markets overseas, so, for example, in the USA, GLB1 must pre- declare all goods that are being exported 72 hours prior to departing New Zealand. As well as this, in some overseas markets such as the USA, Japan or China, there are regulatory bodies such as the Food and Drug Administration (FDA) that must be complied with, so GLB1 work alongside their customers to ensure that the goods are pre-approved or are going to be accepted by the market before putting them on a vessel to be shipped.

Other than GLB1’s continuity plans in place, there are several other mandatory Government requirements, however, these are not solely for emergency preparedness. Authorisation with the Regulated Air Cargo Agent (RACA) for aviation security; MPI food safety schemes and New Zealand Customs are a few of the Government regulations in place that the business must abide by. Ivanov and Wendler (2020) discussed how the mitigation stage of disaster management is comprised of actions taken by the local Government to reduce vulnerabilities and build infrastructure. These requirements agree with this literature. The exporting and handling of chilled fish, meat and produce is also a highly regulatory environment that GLB1 must follow closely, according to Respondent C.

4.2.2.2 Event

4.2.2.2.1 Impacts on Sea Freight

Each of the three respondents from GLB1 confirmed that the COVID-19 disruption had significant impacts on their exporting operations of perishable products. Respondent B discussed how the business has never experienced impacts like the COVID-19 pandemic. The Christchurch earthquakes in 2010 and 2011 impacted the business on a smaller branch-wide scale, whereas this pandemic has impacted the business globally. Another point made was that the earthquakes only ceased operations at the ports for a matter of hours or days, while the pandemic has resulted in ports closing for weeks and even months in some cases. Respondent B noticed a significant change in the New Zealand market for sea freight. Many customers who were previously exporting their products into China, suddenly had no market to sell into because Chinese customers were no longer buying. GLB1 found that this was caused by the strict hospitality closures and lockdowns within China. The Chinese were not purchasing the same volumes of food and drink and their consumption decreased 42 dramatically. All the exporters in New Zealand who planned to export their products into China were required to swiftly locate new markets. According to Respondent B, these were commonly found in the USA, but also smaller volumes into Australia and Europe. Ultimately, what this meant for the shipping lines was that they had vessels set up to transport this peak season load of perishable exports into Chinese markets but suddenly, there was no cargo travelling to that destination. Alternatively, the traditional season into the USA that uses a standard number of reefer containers (refrigerated containers) was suddenly booked out. Respondent B went on to say that “some shipping lines had bookings of two to three times the volumes of perishable products into the USA than what they would normally have, without the available capacity to move it”. In order to resolve this, shipping lines began to ratio back the acceptance of cargo by looking at historical data and basing it on the amount of cargo GLB1 shipped into a certain location the year prior. The problem with this for GLB1’s was that their volumes had experienced exponential growth on the previous year, so shipping lines were offering to spread these volumes of products over a five-week period. Normally GLB1 would have a contract rate for that business and offer containers out to other Carriers requesting a rate to move them on their vessel. Because there is only one vessel travelling to the West Coast of the USA, these containers will still travel on the same vessel, however, four different shipping lines sell space on that vessel. GLB1 approached each of those shipping lines and found the lowest spot rate offered to move the cargo. This meant that those customers who thought they had a contract rate and available space, suddenly were paying more to move their products with a lack of space on most vessels.

In terms of a change in peak season, the traditional peak for exports is generally from December/January through until June. New Zealand’s exports are primary product driven, so that is the time of the year when the dairy products, meat, apples, stone fruit, melons and other perishable commodities tend to be exported. Those primary peaks remain however, manufactured products are highly volatile depending on the markets that they are going to. Respondent B discussed the other issue that GLB1 is seeing around the world is access into those markets. Global consumption has increased significantly as the USA and Europe have been purchasing everything they can, while to a slightly lesser extent, Oceania is also doing the same. This means that the traditional manufacturing hubs in China and South-East Asia have experienced huge production increases, so obtaining available space on vessels to these destinations is critical to GLB1. Because some of those destinations also impact others, a

43 vessel to China or Europe will go via South-East Asia, so it means that South-East Asia is now full of containers and it is becoming difficult to get containers from New Zealand to Europe via South-East Asia due to the wall of cargo that is coming from China. Likewise, the global equipment flow has been turned upside down according to Respondent B. Normally the spike in cargo would occur from November through until March, but that spike has been “occurring since June/July, so the USA is experiencing serious congestion at all its ports and inland ports because of the build-up of containers”. Furthermore, all the USA’s warehouses, inland ramps and terminals are full, and they have no chassis available to move containers. As well as this, they have a reduced number of trucks available to move them because of the COVID-19 restrictions at warehouses and a trucking labour shortage. A large proportion of these containers are not being devanned and redirected back to China, meaning there are equipment shortages throughout China. Other problems that GLB1 have noticed surface during this time include port congestion in Sydney resulting in delays for container vessels of up to a week in Auckland, and delays of up to three weeks in Sydney, throwing the entire supply chain off. Respondent B discussed how “shipping lines tend to omit ports in cases like this in order to attempt to catch up to schedule”. They will operate reduced exchanges at ports to attempt to get the vessel through and move faster; so, there are containers that are currently in the wrong places in the world; all the ports are congested; and shipping lines that are saying they cannot take containers to certain destinations.

Following this, the Respondent B was asked whether congestion at certain ports such as Asia and the USA impacted their perishable markets. They stated that “it has not because perishable products are handled as a priority, so even if there is congestion at the destination, these perishable containers should theoretically continue to move”. The ports are required to pay for each container to remain on power while it sits at port and they are reluctant to pay any longer than what is required. This means that they aim to have containers off port and delivered to the freight forwarder or the firm that is responsible for devanning the container. The next issue that arises is the freight forwarder then does not have anywhere to store or offload the container because all the depots that are normally empty are now full. Examples of this are being reported in Sydney and in parts of the USA, where freight forwarders who have devanned the containers are then unable to return them as there is no space to return it to. According to Respondent B, this has resulted in empty reefers sitting at yards of some of GLB1’s customers in Sydney and they cannot move. To counter this, GLB1 are having to haul

44 these empty containers back to their depots that are now also becoming full, or alternatively find another facility to store them. This has caused additional costs for GLB1 in terms of transportation, but also Respondent B stated that “these reefers are now removed from the supply chain, so they are not being loaded and shipped to another destination in order to move again”. Ultimately, the respondent believes that perishable exporters in New Zealand are going to experience equipment shortages, specifically the reefer containers that they load their products into for export.

Once a container is available for export from New Zealand, GLB1 have experienced other issues arising such as port congestion, or delays in schedule due to COVID-19. Vessels have also opted to save time by not calling to Lyttelton Port, meaning they will omit or bypass it. Each perishable container that has been loaded and delivered to Lyttelton must remain on power, meaning the Lyttelton Port Company is required to cover the cost for this until the next available vessel arrives to pick up the container. Respondent B discussed how GLB1 have experienced situations during the pandemic where “perishable containers have sat at the ports for two to three weeks, waiting for a replacement vessel to arrive”. This means all the certificates and approvals must be re-completed, creating additional paperwork for the customers and GLB1. These products can often also have restricted windows in reaching their final market, meaning that “two to three weeks can be the difference between missing a supplier contract”. The respondent admitted that they have dealt with issues like this most days as a result of the flow on affects from COVID-19.

Respondent B believes that one factor other than the pandemic that is influencing equipment shortages and congestion at certain ports is that most shipping lines are privately owned, meaning that they are generating revenue from it as a result. According to the respondent, this disruption has meant that shipping lines are making more money than they have made in the last 7 – 10 years. For them, the supply chain issues that currently exist do not have to be resolved. If they have enough equipment in the right places, it means that they will continue to generate revenue. GLB1 have noticed some Carriers operating additional vessels on a trade lane in order to get containers moving again, however the charter market is rather turbulent due to the increasing spot rates that are being paid on a weekly basis because of the growing demand. Respondent B stated that one shipping line, MSC, recently chartered half a dozen new vessels to move products from Northern China to the USA because of the current spot

45 rates they can charge, upwards of $2,000NZD per TEU. Similarly, the respondent also discussed how another shipping line, Costco, has introduced an additional peak season loader vessel, but it is already at capacity with backlogged cargo from China. Maersk also has a peak season loader programme for New Zealand’s milk powder products travelling to China. This vessel commences by moving products from South America to New Zealand, before travelling on to China. According to Respondent B, their first vessel on the peak season programme had a crew member test positive for COVID-19, meaning that the vessel was idle in South America without a crew. This vessel was therefore delayed arriving to Tauranga meaning that the first load of milk powder of up to 500 containers was backlogged. The flow on effect of this disruption is prevalent throughout the supply chain and the respondent believes there is “not one solution to resolve the issue”.

4.2.2.2.2 Impacts on Air Freight

Respondent C found that the most prominent disruption was the lack of aircraft and air freight capacity available to export their customer’s products. When evaluating the available flights prior to COVID-19, there was speculation within the industry that there was an insufficient number of flights to support New Zealand’s exports. When comparing that number of flights to what has been available during the disruption, there is a significant gap. One of the difficulties resulting from the lack of flights was some of GLB1’s customer’s inability to comprehend that no international passengers or tourism leads to no flights for exports. GLB1’s two major airline Carriers for perishable exports also suspended their freighter aircraft from operating out of New Zealand. These Carriers also reduced the number of passenger aircraft operating. With GLB1 being heavily reliant on both the availability of passenger Carriers and freighters, it has caused several challenges. To put the reduction of flights into perspective, prior to the COVID-19 outbreak, GLB1 were utilising 22 different flights per week, while during the pandemic in mid-September 2020 that number had halved to 11 flights. According to Respondent A, there was “insufficient air freight capacity available to exporters prior to COVID-19 out of the South Island, or Christchurch International Airport in particular”. This is supported by Luke & Rodriguez (2008) who discussed how food supply chains have a significant degree of dependency on transportation methods and this is noticeable during a pandemic. One method GLB1 had previously employed was transiting export shipments through Auckland on domestic flights, before being exported to overseas markets. This approach was impacted during the pandemic as charter flights from Christchurch to Auckland

46 were highly sought-after and therefore, space was limited. As the pandemic entered New Zealand, further domestic flights were cancelled. Respondent A stated that GLB1 approached New Zealand Trade & Enterprise (NZTE) and communicated their need for additional capacity for their exports. This resulted in a collaboration with Air New Zealand who arranged to temporarily operate three Boeing-787 aircraft between Christchurch and Auckland. This came to an end in early to mid-September 2020, with Air New Zealand replacing the three larger aircraft with ten smaller aircraft, increasing the number of flights but decreasing the available volume per flight.

GLB1 found initial success transiting their air freight cargo through Sydney, “acting as a critical link for their export customers” according to Respondent A. Some of GLB1’s perishable exports did however remain consistent or even grew stronger than prior to the pandemic, including some seafood products to Australia and a few markets in Europe. Routing exports through Sydney has become increasingly difficult as a result of the spread of COVID-19, meaning GLB1 has missed out on operating to several markets around the world during the pandemic. However, the business has consistently contributed large proportions of freight to the available flights. Respondent A praised Carriers such as Air New Zealand and Qantas who have been “highly supportive during the disruption”, but also the air mail services, more specifically Freightways for supplying additional capacity for exports being routed through Auckland to international markets.

According to Respondent C, the hours of operations at some airports changed within New Zealand during the pandemic. Christchurch International Airport and Air New Zealand handle the Qantas freighter that departs at 6am, meaning the freight is required to be at the aircraft by 2am. Because of the shortage of team members operating, the airport was closing at 10pm each night, resulting in “products such as live seafood having to be delivered to the airline the night prior without being held in cold storage overnight”. The exporters of these specific products were made aware that this was happening and were not satisfied with the outcome. This resulted because of the costs associated with holding the products in cold store, something the airline does not feel obliged to pay.

4.2.2.2.3 Changes in Operations

GLB1 saw certain markets collapse, while others seemed to expand, and this ebbed and flowed depending on the overseas lockdowns and border restrictions, supported by prior literature

(Ivanov, 2020). In some cases, they experienced inconsistent volumes of cargo being exported by their customers. GLB1 also had containers that were loaded and ready to be shipped to one destination, but suddenly, they were re-directed to a new destination. All the pre- planning and documentation completed for the original destination prior to export was then void. GLB1 are then responsible for finding new space and rates with shipping lines and assisting the customer with re-documentation prior to export. GLB1 are making allocation or priority decisions based on the limited space, but also finding a home for other customers. These allocations or priority decisions are also often dictated by the customers that are prepared to pay a higher price, or alternatively, the customers that accept delays for space at a lower rate. Another factor was the urgency dictated by the customer to get certain products to market. If they felt there was a short window for a product such as beer hops being exported to the West Coast of the USA, they recognised the need to get these products to market in the same season as the local producers in California to avoid missing the peak season. Beer hops and chilled melons out of the North Island took priority when GLB1 experienced peak volumes during COVID-19. Frozen shellfish and fish products were easier to delay as they were less perishable than fresh or refrigerated products. For frozen products, GLB1 had containers that were loaded and stored at their facility in a reefer while the customer found an alternative and accessible market to export in to. Once this was established, a booking was made in advance and it was then exported to market. According to Respondent A, many shellfish products that are exported to resort destinations including Las Palmas in the Canary Islands also stopped during the pandemic, with cruises and international travel to such destinations not taking place. This resulted in “the supply line being cut off and exporters having to find alternate markets to sell in to”.

GLB1 and the rest of the industry have taken advantage of one positive outcome as a result of COVID-19 and this is a reduction in the cost of bunker fuel. Respondent A discussed that this has been caused due to the lack of fuel consumption globally during the lockdowns, as well as other external factors. At the beginning of 2020, GLB1 experienced a significant increase in the price of marine fuel due to a global shift toward a low sulphur variant of fuel. The business was anticipating that this would have a resounding impact on their bottom line during 2020. After the first quarter, when global fuel consumption fell considerably, the market price for the higher refined, low sulphur fuel was lower than what was being paid for heavy grade diesel the prior year. Respondent B stated that this has been “the silver lining during the pandemic”.

When the respondents were asked what they saw as the biggest surprise during COVID-19, each response was unique. Respondent B stated that it was “the spike in volumes despite the circumstances surrounding the pandemic”. Regardless of gross domestic product (GDP) being down and a recession taking place, GLB1 has never moved the volumes of freight that they have during this pandemic. According to the respondent, the reasoning for this is twofold; firstly, GLB1’s sales team nationally and globally have continued to find business throughout the lockdown periods. While they were finding solutions for their existing customers, they were also communicating with prospective customers about the solutions that they were providing for the current customers. Air freight charters were also a significant selling point to GLB1’s prospective customers, in terms of being able to move their products while some other freight forwarders had decided to stop operating during the lockdowns. Respondent A admitted that GLB1 had “gained a fair share of new business during the pandemic but have also experienced considerable up trading of their existing business, with strong and growing volumes as a result”. Respondent C found that the biggest surprise was the reluctance of some exporters to accept the shortage of freight capacity available for export. As well as this, the respondent also discussed how freight rates have increased dramatically. For example, GLB1 would normally pay $4/kg to air freight live lobsters from Christchurch to Shanghai, whereas that price is currently at $7.85/kg. Rates in some cases have doubled during the disruption. Prior to COVID-19 there was surplus capacity to export from New Zealand due to tourism numbers being so high. Respondent C mentioned how there were flights available to most destinations around the world and the industry was experiencing very low rates to the point where some commonly sea freighted products were transitioning to use air freight instead. For example, GLB1 were air freighting large quantities of avocadoes to markets such as Taipei, Shanghai and Tokyo, when they are commonly products that are transported via sea freight. Because the prices have increased drastically, these customers have returned to using sea freight. Air freighting of avocadoes to Taipei was $1.5/kg prior to the pandemic and is now closer to $5/kg. Respondent C added that when exporters become comfortable using a specific mode of transport, whether it be air or sea freight, they rarely are convinced to change. As air freight prices return to normal, exporters may find it difficult to return to using sea freight, likely impacting GLB1’s bottom line.

4.2.2.2.4 Success of Initial Plans

Another question asked to the respondents of GLB1 was how successful the initial plans they had in place were for the COVID-19 disruption and whether any adaptations were made to these during their response. Respondent A admitted that the plans GLB1 had in place were “worthless”. The rapid nature of export operations to China ending was to some degree unavoidable, however, they did have some time between the initial outbreak in China and the spread of the disease into New Zealand. This suggests a slow-onset disruption as described in prior literature (Munson, 2013). The only other preparation they managed within this timeframe was organising team meetings with national managers to establish the risks associated to the pandemic, however, this did not accomplish nearly as much as what was required according to Respondent A. Featured within the management team, Respondent B and other global managers within the business were able to instigate weekly or sometimes daily where necessary via video calls. In these calls they “shared learnings from the disruption, helping to establish an understanding of the unique response methods being used”. They identified where bottlenecks were occurring or where they had capacity in their operational teams, to allow for them to share the workload where possible. Respondent B found that these calls were successful and efficient. Respondent C believes that the business coped well with the plans they had in place. The National Training Team Centre for GLB1 were responsible for advising all the various branches of the business in New Zealand including warehousing, transport and A&O and this was highly successful. Each branch received daily updates after the Government announcements from the training team. They would relay these updates via email to each branch manager and outline any key points that related to the business’s operations. They also temporarily halted the training courses and shifted their focus to implementing temperature checks and distributing disinfectant and masks to each branch in response to COVID-19. Some adaptations were made to the business’s original plans according to Respondents A and C. Respondent A stated that the only adaptations made to the initial plans were the requirements to use personal protective equipment (PPE) and increase hygiene practices in compliance with the New Zealand Government. These actions are supported by literature (Ivanov & Wendler, 2020). Respondent C added that “disaster planning and recovery is useful, but it is important to also understand each disaster or disruption will have its own unique attributes, impacting the outcome differently”. This suggests that the business must be adaptable in its approach and not be set in their ways.

It took GLB1 almost a week to increase business operations once New Zealand entered lockdown restrictions. This involved implementing two rostered shifts for employees in order to create a safe bubble for them to work in. A crucial part of this was setting up IT gateways and hardware so employees were able to operate from home with access. At times, GLB1 have experienced significant shifts in their customer’s activity, with no products moving some days, to large volumes moving the next. GLB1’s business is highly dictated by their wide customer base, and the respondent believes that is why they have performed well in the current situation. Prior literature states that maintaining supplier relationships to mitigate the impacts of a disruption was crucial (Atan & Rousseau, 2015; BCI, 2020). GLB1 found that when one customer has reduced volumes, another customer’s volumes will increase. In general, the business has continued and worked with the customers that have needed them at the time. According to Respondent B, GLB1 were constrained in terms of labour. Bearing in mind that the business was expecting the worst from the pandemic, they issued a hiring freeze to ensure that they were reducing their overhead costs as much as possible. Because of this, when entering an extended peak season, they have had to urgently re-gear the business by employing new team members in some parts of the business and training them. Some of this training can take up to three months, meaning that this can be a long lead time to have them ready and operating as a productive team member. This has caused delays due to the decision not to hire within that period. Unfortunately, training in a peak season is difficult because everyone in the business is busy, but GLB1 has managed to cope despite this challenge.

4.2.2.2.5 Supply Chain Relationships

Supply chain relationships are a considerable factor when it comes to dealing with disruptions. Each of the respondents were questioned on GLB1’s supply chain response to COVID-19. Respondent C believed that their supply chain responded well during the pandemic, but admitted they were “fortunate to have a wide range of airlines that were available, including some who continued to operate freighters”. Freighter services were not as impacted by the pandemic and because GLB1 had utilised them prior to COVID-19, they had a priority for space. The pandemic did test some of GLB1’s supply chain relationships. Respondent C stated that “it is still a developing situation and at a later date there will be a review of the customers that did well and those that did not”. As well as this, it is crucial to understand what the difference is between their responses and the improvements that are to be made. When reviewing supply chain successes, Respondent C found that Singapore Airlines and Tasman Cargo were

51 beneficial during the disruption because of their freighter aircraft out of Auckland. China Air also performed well and GLB1’s relationship with them has grown as a result. This was due to the funding they received from the International Air Freight Capacity (IAFC) to operate their flights and this went from strength to strength. The contracts that GLB1 had with most airlines were flexible. Respondent A added that there were varying degrees of success with each stakeholder. As mentioned, some airlines withdrew some or all flights following the outbreak including Singapore Airlines and Emirates, while others such as Air New Zealand did well to operate chartered flights. These chartered flights did however come at a cost to exporters, with freight rates increasing substantially during this time. As well as this, GLB1’s customers were notified of the chartered flight freight rates by the airline directly meaning GLB1 struggled to make profits while maintaining strong relationships. For airlines that continued to operate, relationships with GLB1 improved significantly, while for airlines who did not, this resulted in some relationships being impacted. In terms of contracts controlling relationships during the disruption, Respondent A stated that most of the time this was the case. Respondents A and C both found that Air New Zealand were stringent in abiding by their contractual agreements with their customers. Air New Zealand’s initial restriction was that if GLB1 booked cargo on a flight 72 hours in advance and confirmed it, they were opting to pay for the freight regardless of whether the booking was used or not. Respondent B found that there was flexibility for most of their relationships. The only contracts that they were required to set up and follow were for the air freight charters because they all had to be prepaid and agreed upon between the airline and customer.

Respondent B stated that because the business operates an end-to-end supply chain, they could “lean on other parts of their business where necessary”. For example, they can relocate team members or resources as they see fit, with additional flexibility. Because the business is based in 24 countries, the respondent believes that they were protected from the lockdowns. When New Zealand entered a nationwide lockdown and the business’s domestic transport numbers were struggling with freight volumes and customers, their Australian business units were still functioning with high demands for business. In terms of their global supply chain, when one business unit was struggling, another business unit or region was performing particularly well in terms of profit. Respondent A stated that the business has found a similar trend throughout the last 5 – 10 years, that when one market enters a recession or has a period of uncertainty, another area is thriving. They believe that their business model has

52 been secure in that case. The respondent added that GLB1 did receive Government advice and guidance during COVID-19. This was received by the New Zealand National Manager of the business who was then able to disperse this information to GLB1.

Regarding the allocation of resources during the pandemic, Respondent C mentioned that at times, GLB1 did not execute this well. For the most part, this allocation was based on demand. Seasonal peaks of air freight mean that there will always be times when there is limited freight space and greater demand than available space. It was a different process, but the answer was still the same during COVID-19. GLB1 had to give a small amount of space to some customers and increasing amounts to the other larger customers, while justifying the outcomes and keeping all customers satisfied; a crucial approach as supported by literature (Atan & Rousseau, 2015; BCI, 2020).

4.2.2.3 Post-event

4.2.2.3.1 Current Outlook

The respondents of GLB1 were asked what their current operations look like after experiencing the significant impacts caused by COVID-19. According to Respondent A, the post-event has been positive for GLB1 because “the customers have adjusted to the altered conditions of operations”. As well as this, they have managed to adapt to the new limited flight schedules, however, one downfall has been that air freight rates have continued to increase. In some cases, freight rates have risen by up to 25% in comparison to before the pandemic. When asked whether any infrastructure repairs or re-stocking was required following COVID-19, Respondent A stated that it was not. Because a lot of their business consists of perishable freight, the fast-moving nature allows for little to no long-term storage, meaning that restocking was not required. No infrastructural damage resulted either, however, precautionary sanitation and COVID-19 guidelines were followed where necessary. Respondent C discussed how the Chinese market has rebounded swiftly after the initial outbreak of COVID-19 and although they were the first to experience the disruption, they were also the first to respond to it and rebuild their processes. Their demand has been strong due to the backlog of delayed celebrations and weddings that are now taking place. This has been beneficial for GLB1 as they are now surging with business, exporting large quantities of live lobsters, mussels and other perishable products.

Respondent B discussed the various flow on effects that have led to differing services being offered by shipping lines. GLB1 are noticing that shipping lines are experiencing major disruptions to their services based on congestion and equipment shortages at certain locations; whereas previously, a customer could rely on a weekly service to or from a certain destination, now this may not even exist. According to Respondent A, Port Chalmers in Dunedin, New Zealand, has lost some services due to its “remoteness and small-scale volumes”. Many shipping lines determined that the distance to travel to Port Chalmers was taking too long for the lack of cargo volumes that they were either delivering or picking in order to make it worthwhile. This has meant that Port Chalmers is now reduced to only a few services a week. As well as this, Port Nelson and Lyttelton are to a lesser extent also being omitted by shipping lines, again due to the lack of cargo volumes. There are also several issues at the ports of Auckland and Tauranga that GLB1 have noticed. Shipping lines have frequently omitted both ports due to the build-up of cargo, as well as on the Metro port link between Auckland and Tauranga. Some shipping lines are also stating that they currently cannot accept bookings to Sydney as they do not have a solution to where the cargo can go once it arrives there. Due to such issues, GLB1 are experiencing a lack of consistency and an increase in price for these services.

It was made apparent that equipment is crucial for GLB1 in the sea freight business. Everything moves in containers and having the inability to relocate these to where they need to be around the world has impacted the business since June 2020 and will likely continue for several more months. There are some markets that are so heavily congested with containers, experiencing such an inability to move them that it would take several months to resolve the issue. This suggests that equipment supply will be a major issue in the coming months for GLB1. Respondent B discussed how for perishable exporters using reefer containers, it is going to be critical because the traditional model has shipping lines that travel to China and the USA, bringing reefers back to New Zealand in order to be loaded again for export. Due to New Zealand’s consumerism, GLB1 have seen the vessels that are coming back to New Zealand are primarily carrying full containers. Normally there would be vessels that are approximately 60% full, with the remaining space available for empty containers. Alternatively, vessels are currently 110% - 120% full and are having to offload cargo and transfer it to the next available vessel. Respondent B believes that shipping lines are “having to make a conscious decision to offload a paying customer’s cargo in order to load an empty container to bring it back for New

Zealand exporters”. In other words, they are having to make revenue decisions based on relocating the containers. This is only applicable if they can locate the empty containers or reefers overseas; they are likely still in a depot in the USA or China, although in China it is solely a space issue, the vessels are full for several months and there is no space to bring those back to New Zealand. Because of the market shifts for perishable exporters, all the traditional equipment flows have been lost, so shipping lines are scrambling to determine where the containers are going to be moved to and then how to get them back from non-traditional areas. Respondent B is hopeful that New Zealand will have sufficient reefer containers for the export peak season, or there could be some significant consequences as a result.

Respondent B was then asked whether there was potential in utilising air freight as an option for products experiencing such issues with sea freight. The difficulty surrounding this is that air freight rates are far higher than sea freight, and capacity is limited. The capacity of a single 40ft container can hold 25 tonnes worth of product, whereas the maximum load for a freighter aircraft is 60 tonnes of cargo. The volumes for some perishable exporters are too much for air freight to handle, regardless of the current restricted air freight programmes that are currently taking place due to COVID-19. GLB1 have customers who are beginning to plan for the future and are experiencing a significant degree of uncertainty. Some customers who were initially using air freight have since switched over to sea freight programmes due to the lack of capacity and the heightened price. This could result in a permanent change in habit in terms of those commodities. For example, a customer overseas may have previously demanded their avocadoes fresh from New Zealand with two days transit time via air freight but are now accepting to wait a few weeks while it is transported via sea freight. If GLB1’s customers are able rearrange their supply chain and improve ordering, they can then have a consistent supply of goods arriving to market via sea freight rather than air freight, and it may remain this way.

4.2.2.3.2 Assessment of Response

The respondents of GLB1 were asked whether the flexibility of relationship building for new and existing customers was required. Respondent A stated that GLB1 became “more than accommodating to any customers that approached us”. They also said that they had taken on past customers who they had experienced difficulties with prior to the pandemic; not solely as a money-making exercise, but more so to help them during the disruption as they

55 understood the challenges that many exporters were facing when trying to get their products to market. Respondent C added that GLB1 has gained these customers due to other freight forwarders disappearing in the height of the pandemic.

Finally, the respondents were asked what they would do differently in response to the pandemic or another future disruption. As a business, Respondent B believes that GLB1 has “performed well during the disruption regardless of the global lockdowns and fluctuations”. Securing new customers and opportunities has been their strength over this time. However, the respondent does not believe GLB1 has planned well enough for new business or for the degree of up trading that has taken place over this time. As a result of this, one thing GLB1 is working on for 2021 is introducing an efficient allocation model so they can “utilise space as efficiently as possible”. This global allocation model considers shipping lines, contracts, customers, trade lanes and other such factors, as well as calculating how they can efficiently allocate resources. This will ensure that GLB1 are not only using their space at a cheap rate, but that they also have access to spot rates at a market price on a weekly basis. It has taken the business a significant amount of time to adapt to this because they are not a business who commonly pre-purchases space with expectations of having enough freight. GLB1 work closely with their customers and ensure that they receive forecasts and allocations before transitioning to the linehaul providers. GLB1 have not been receiving forecasts or allocations from their customers during the pandemic because projections have been unpredictable during this time. This has caused many issues for GLB1 as some orders are taking up to four times longer to arrange during pandemic. The more pre-planning and contingency planning that GLB1 can do, the better off the respondent believes they are going to be. Respondent B admitted that “the business will not be able to plan for every eventuality, but if we can have several ideas in mind then it may us in the long run”. Respondent A stated in their opinion, everything worked well, however, they said that they “will continue to collaborate with NZTE and other Governmental organisations as they were the key contributors in arranging the charters with Air New Zealand”. A large amount of time and money was spent on organising these, but the respondent believes it was worth it in the long run as it resulted in more flights and capacity for their customer’s exports. Furthermore, respondent A stated they would make more of an effort to have flights operating sooner than they did during the disruption. Lastly, Respondent C found that in their experience GLB1 should have been more open-minded and exercised new or alternative options; not because they were necessarily bad options, or they

56 knew that they would not work, but more so to demonstrate to their customers that they were trying to do everything that they could. The respondent understands that it will not be the last disruption the business faces, but it is a matter of “learning lessons from each experience and improving from it”. This backs the findings of prior literature (Hecht et al., 2019).

4.3 Case Study 2 (GLB2)

4.3.1 Case Introduction

GLB2 is a global transport and freight forwarding company based out of Switzerland and founded over 120 years ago. The business provides sea and air freight forwarding, as well as contract logistics and overland businesses, all of those proving to be highly successful. Globally, the business is one of the largest air freighters, with operations shifting radically over the last few years and almost doubling in size. In New Zealand, operations are located in Christchurch and Auckland, with the business sitting amongst the top three GLBs for perishable export volumes.

GLB2’s operations in Christchurch consist of two categories of employees. 17 team members are employed in the general operations in Christchurch, with another 28 being employed within the company’s business extension that involves documentation, bookings and container relocation.

Table 8- GLB2 respondent information

Respondent Role Experience Responsibilities

Respondent A Branch Manager of 3 years with GLB2 Oversees air and sea freight business extension operations out of Christchurch

4.3.2 Case Results

4.3.2.1 Pre-event

According to the respondent, the business was “well prepared for the initial impact but were increasingly reactive rather than being proactive in preparing for specific disruptions in specific locations”. The business was preparing for team members to WFH. This involved having the required infrastructure in place for staff such as company laptops and mobile phones in order to be able to communicate with one another, but more importantly with the customers to meet their demands, as backed by literature (BCI, 2020). IT support was also a factor in the preparation phase. Preparing IT for an increase in demand during external operations was one key to success. According to Respondent A, the business was preparing for all types of supply chain disruptions prior to the pandemic, but more commonly for previous disruptions that they had already faced including the Christchurch earthquakes. They

58 continue to use BCPs both globally and regionally and ultimately, these are implemented and updated by the business’s Quality, Safety, Health and Environment team in Auckland, as well as the other main hubs situated around the world. External and internal audits also help to determine whether the overall business or single business units are prepared for a disruption to the operations. These plans are also communicated with the suppliers or customers as GLB2 see these interactions as a crucial part of doing business. Being able to keep a constant flow of communication is included within the plans. The Government had little to no voluntary or mandatory requirements that were to be followed other than working with Governmental authorities including New Zealand Customs and MPI.

4.3.2.2 Event

COVID-19 has impacted the business’s exporting operations in several different ways. Respondent A stated that the sea freight business “was not initially impacted; however, China soon became bottlenecked with a shortage of reefer plugs and congested ports”. The biggest task was communicating with GLB2’s customers and reporting delays, as well as creating solutions to overcome the problems. The respondent went on to say that similar challenges soon translated over to Europe where ports also became congested and containers struggled to move. Congestion has then led to a reduction in the speed of container devanning and therefore a shortage of empty reefers for GLB2’s export customers in New Zealand. GLB2 noticed that the consumer demand in both Asia and Europe took a significant hit during the various national lockdowns, supported by literature (Ivanov, 2020). That includes food service markets that have experienced major impacts during COVID-19 and this has continued while some nations remain in lockdowns. According to Respondent A, while restaurants and other food service industries remain closed, this will continue to have an impact on GLB2 and their export customers. These products are predominantly exported via air freight and this is another area of this food service supply chain that is having issues. Alternatively, the business has noticed that retail products have remained strong while consumers continue to purchase products from supermarkets and other essential food retailers. These continue to operate during lockdowns under essential service protocols, meaning these products have not been as affected during the disruption. For the most part, GLB2 exports these products via sea freight and therefore, the initial impacts were not as prominent as those being air freighted. Similarly, perishable pharmaceuticals being exported by GLB2 have increased significantly as a result of the pandemic, with many consumers buying in bulk. Respondent A discussed how

“New Zealand exporters were fortunate that the trade between Australia has remained steady during the disruption as this is a core markets for our exporters”.

GLB2 experienced little to no loss of products due to delays at ports or other disruptions. The only noticeable case of this happening for the business was with component products used to make up a whole product. For the minority of products that were delayed or in sub-par condition, prices were reduced where necessary, or sold on the domestic market. The biggest surprise for the respondent was that “operations seemingly endured the disruption”. Although the business was impacted, these were not as severe as what was expected. This pandemic has impacted GLB2 differently from any other supply chain disruption including the Christchurch or Kaikoura earthquakes because it was on a global scale rather than locally. This disruption has also impacted their air freight operations on a much larger scale than their sea freight. A number of GLB2’s customers have shifted from air to sea freight, ultimately impacting the profitability of the freight. These change overs are a concern for the business because they may not change back to air freight.

When asked how successful the plans were in place prior to COVID-19, the respondent stated that “our business continuity plans worked as well as they could have”. Initially, working from home was slow and not as efficient as the business would have liked, but as team members adapted to the technology and new arrangements, they were somewhat back to normal. GLB2 was flexible right from the outset so this allowed them to adapt to any changes and be more reactive to what they were experiencing rather than attempting to be proactive and fall short. According to Respondent A, the impact of COVID-19 was not straightforward to predict, so being proactive is not always the best option. The business’s supply chain responded well as a whole, and this was mostly due to the other operators within GLB2’s supply chain being deemed essential services. This allowed for the business to almost run as usual. Some factors changed as a result of the pandemic including volumes and operation processes, but these were not major changes that impacted the business. The COVID-19 disruption had little impacts on the supply chain relationships of GLB2. Most of their stakeholders including suppliers and customers appreciated the business’s efforts and understood the various challenges they were facing. This has resulted due to the flexible nature of shipping contracts. Because of the large number of moving parts within the sea freight industry, there is a general understanding among those that are involved. The respondent stated that in their experience,

“contracts often tend to ruin or impact supply chain relationships”. Service changes are commonly built into contracts with shipping lines, allowing for additional flexibility. In terms of allocating its resources to customers, GLB2 continued as per normal. Respondent A discussed how perishable freight tends to take priority over dry goods, however, the allocation of equipment and time continued as they did prior to the disruption.

The business did reach out to New Zealand Customs and MPI on several occasions. The main purpose of this was to learn of any updated international border closures, or implications in terms of getting products into certain markets around the world. GLB2 dealt with some containers that had to be relocated or brought back to New Zealand as a result of the pandemic. Several containers were relocated to the Philippines during the initial outbreak, so it was a matter of communicating with the Governmental authorities to understand any requirements or protocols when entering the market with certain products.

4.3.2.3 Post-event

When summarising the current operations, it has been very similar to what the business has been doing prior to and during the pandemic, but the respondent does not believe that the industry is in a “post-event” at this stage. GLB2 have been able to redeploy team members where needed, as well as implementing some restrictions around volumes for customers, especially for their air freight business. When asked if any infrastructure repairs or re-stocking has needed to be carried out, the respondent stated that in recent times, GLB2 has been purchasing new containers to replace damaged or old containers, but also to operate backup equipment if needed. COVID-19 has not altered this, however, GLB2 does see it as a prime opportunity to purchase several additional containers in case they are needed in the future.

Because GLB2 operate a large container fleet internally, it has readily allowed them to better allocate their resources with new and existing customers. Respondent A has found that “having flexibility with existing customers has been a selling point for attracting new customers to the business”. In terms of what the business would do differently or could improve on when facing another disruption like COVID-19, the respondent believed that overall, the business had coped well. Furthermore, they discussed how “having a reasonable cargo mix has assisted in keeping the business stable during the pandemic”. If one of their customers or products have struggled, the business has had the ability to lean on other customers or products and vice versa. The business has grown its confidence from the way 61 they have responded to COVID-19. GLB2 has learnt several lessons from this disruption and due to its global nature, it has been a unique experience that the business will take in its stride. These learnings agree with prior literature (Hecht et al., 2019).

4.4 Case Study 3 (GLB3)

4.4.1 Case Introduction

GLB3 is an independent air and sea freight forwarding specialist and logistics provider, with a major focus on New Zealand’s agribusiness and primary produce exports. The main commodity they handle via sea freight is apples, exporting approximately 11,000 TEU annually throughout the world. As well as this, they also export a large quantity of organically deboned meat, one of the core ingredients in pet food. This is predominantly exported to Nestle and Mars who are the largest pet food producers based in the USA. Other sea freight exports include avocados, kiwifruit, citrus, onions and pears. In terms of air freight, the major commodities exported by GLB3 are stone fruit such as cherries and apricots, but also seafood and meat products. The business has strong ties with globally operating Carriers and airlines, meaning they can specialise in supplying flexible international freight services to each of their customers.

Table 9- GLB3 respondent information

Respondent Role Experience Responsibilities with GLB3

Respondent A General Manager of 23 years Oversees air and sea freight operations out GLB3 of Christchurch

Respondent B Sales, Marketing and 14 years Management of the sales team and Support Manager in procurement of shipping supply services. AKL, TGA and MEL Annual supply tenders, direct sales with major customers and support of operations and customer services teams

4.4.2 Case Results

4.4.2.1 Pre-event

Prior to the pandemic, GLB3 had a brief scan of the disruption environment and how it may impact their operations. Respondent A stated that this involved a corporate team comprised of global managers and senior team members who came up with a ‘what if’ scenario. This planning was not necessarily scoped towards the pandemic, but rather more general disruptions. The most recent planning focussed on the Recognised Seasonal Employer (RSE)

63 workers, or the labour force that arrive to New Zealand from the Pacific Islands for the peak fruit harvesting season. The discussion investigated what would happen if RSEs are unable to arrive in New Zealand due to COVID-19. The business covered most scenarios, however, they lacked one for an outbreak or pandemic. Respondent B believes that GLB3 was well prepared for a disruption to their supply chain. They mentioned that “preparation was more surrounding natural disasters such as earthquakes as that was the most recent first-hand experience of a disruption, however, this still assisted in preparation for COVID-19”. One example of this was the business’s IT systems were already set up to allow for team members to WFH effectively following the Christchurch earthquakes. Respondent A agreed and added that each team member had the ability to process and work out of office and that occurred almost with automation, with the difference being that the team had additional notice of it occurring, unlike the earthquakes. GLB3 had more time to prepare for the pandemic and with the ease of social media nowadays, the impact was minor on operations. This preparation time links to the factors of a slow-onset disruption (Munson, 2013). Respondent B is adamant that there is nothing that can prepare a business for disruptions better than first-hand experience. They were not prepared for the two-metre social distancing protocol that was introduced, so it was a challenge for them to get their cold stores and warehouses to meet the specifications as they both required onsite work. This impact of social distancing supports prior literature (Ying et al., 2007).

GLB3 does have BCPs in place within the business portfolio. They have scenarios that tend to cover most outcomes. These also cover impacts such as if the work environment was to be compromised and having the ability to WFH in such circumstances. If something was to happen, specifically in Christchurch, the business has other branches in various other locations such as Melbourne that can assist in operations if required. Respondent B commented that GLB3 does have formal plans and emergency protocols, however, they are more in relation to workplace health and safety, not specifically covering how to handle a pandemic. The General Manager of the business ultimately has the primary responsibility for these plans, with limited input from supply chain specialists. Respondent B stated that “because the lockdown was unprecedented, it was difficult to plan for such an event”. The business’s plans in place do not tend to involve other external organisations, except their primary producers and packhouses in the Hawkes Bay, as well as the pet food plants in Dunedin who are all consulted with. They are more internal plans that focus on the processes within the business. Other external parties

64 such as the Government and any of their mandatory requirements do have impacts on GLB3’s plans, the major one being health and safety, specifically for RSEs. This supports prior literature (Ivanov & Wendler, 2020). Respondent B stated that aside from the occupational safety and health (OSH) requirements, “the Government-initiated requirements were left to individual businesses, apart from actual rulings as experienced with COVID-19”.

4.4.2.2 Event

Immediately, the air freight business for GLB3 was severely impacted with the loss of international flights. Only a small number of flights out of New Zealand continued, meaning that most air freight exports either had to be shifted to sea freight if viable, or sold on the domestic market. GLB3 was fortunate that they had already exported most of their peak season stone fruit products to overseas markets prior to the outbreak, so their air freighted products were already slowing down. Respondent A admitted that their air freight operations were always going to be the biggest challenge, with minimal aircraft operating in and out of New Zealand due to the lack of passenger volumes and travel restrictions in place. This dependency is emphasised by Luke & Rodriguez (2008). Airlines have however been subsidised by the New Zealand Government to ensure that there is adequate aircraft to transport products out of New Zealand to the various markets around the world. Air New Zealand, China Airlines, Singapore Airlines and Qantas have had all their freight capacity consistently booked out, but overall, GLB3 are reasonably content with how they currently sit in both Christchurch and Auckland.

Alternatively, Respondent B stated that sea freight was able to continue with food products being deemed essential. Initially, shipping continued relatively unscathed until the ports themselves slowed their productivity due to social distancing protocols being implemented. As time wore on, Respondent B found that port congestion started to become prevalent and vessels began to experience delays, with flow on affects leading to what is occurring now, the demand for shipping space exceeds supply. This is in accordance with prior literature (Ivanov, 2020). According to Respondent A, GLB3’s sea freight programme had some minor impacts, but overall, the shipping services were maintained into New Zealand. They did experience a small number of blank sailings, but the impact was minor. They did also experience some blank sailings on their trans-shipments out of both Singapore and New Zealand, as well as a few other countries, but again these had minor impacts on the operations. Respondent B has not experienced any ports or terminals being closed from COVID-19, but alternatively industrial 65 problems in some ports that did cause issues. Respondent A stated that “ports have functioned well despite the challenges, but there were some restrictions around the loading windows, or times for the container exchange process”. This was caused due to cleaning and social distancing protocols that were introduced, an impact discussed by prior literature (Ying et al., 2007). Throughout the pandemic, it has seemed to be business as usual on the sea freight side for GLB3.

Packhouses and other primary producing facilities were also impacted due to social distancing guidelines within New Zealand according to Respondent A. Workers were required to socially distance meaning that productivity in some cases decreased due to less workers operating at one time. Thorough sanitation and hygiene practices were another protocol that was introduced, however this had minimal impacts on operations. These were mandatory for businesses to operate.

In terms of Respondent A’s biggest surprise regarding the pandemic, it is the concern for the future. The import market is currently rather high and good freight rates are being paid, however, “40-foot, high cube reefers are not being repositioned into New Zealand” according to the respondent. These reefers are essential in order to supply New Zealand’s perishable exporters with the equipment they need. Generally, over the Christmas period, GLB3 find that vessels have an excess of space to carry empty reefers back to New Zealand from China and South East Asia, however, this is not currently the case, with many still located in these countries. Another issue concerning Respondent A is the vessel delays and omitting of ports in the New Zealand rotation. If this continues, it will have significant impacts on New Zealand’s perishable exporters. For Respondent B, the most surprising outcome is firstly, how GLB3 has proven to be capable of continuing to operate almost seamlessly during the lockdowns, but also, the severe impact on ports, with congestion and the shortage of shipping space supply as global trade starts to recover. The respondent has “never seen or experienced an impact to this scale in their 35 years’ in the industry”. Furthermore, the COVID-19 disruption presented several factors that were outside the control of GLB3 including shortages of airline and shipping capacity. As well as this, dealing with the flow on impacts of congestion has added an extra tier of the supply chain to manage. Respondent A had a differing opinion to Respondent B, stating that “there are always consistent equipment and vessel shortages as it is the nature of the industry, but it demonstrates the importance of having enough Carriers calling New Zealand”. If one vessel omits New Zealand, it means that there are still alternative

66 options that exporters can rely on. The respondent stated that it is nothing new, but the concern is more around the initial supply of containers. Respondent A discussed how the Northern Asia demand volumes have increased for apples and kiwifruit and so, because of these shortages, there are pressures on having the equipment available, but also having other infrastructure available such as reefer plugs from New Zealand to Asia.

When accessing the limited planning that GLB3 had in place prior to COVID-19, Respondent A found that “this was not detrimental to our response”. The business has their annual allocations with Carriers, so if those allocations are met and the vessels continue to call New Zealand ports, then the disruption is minimal. One scenario would be if some of the vessels did not call New Zealand, but that never really came to fruition according to the respondent. There were no impacts experienced like this in the sea freight side of the business, however initially, airlines were relying heavily on passenger volumes so aircraft did seem to disappear briefly. The respondents both found that some products that would normally be exported via air freight were shifting to sea freight. Most of their customer’s products have avoided being sold on the domestic market, but they have seen a small number of cases including crayfish exports that had to be sold domestically or be returned to sea. Fortunately for GLB3, they were not involved with these products. Respondent B believes that “although many factors were outside of our direct control, the plans we did have in place were successful”. Adaptations or developments have been made towards their plans and this has been a work in progress as the business is dealing with a new industry issue.

When discussing the impact that COVID-19 has had on GLB3’s supply chain, both respondents agreed that it held up well despite the circumstances, especially trucking and cold storage facilities that had to deal with significant pressures. Respondent A was adamant that cold stores were restricted for space, holding products for delayed vessels or flights, however they coped well. China also stopped accepting meat for a certain period, also adding pressure to the supply chain. The process however did seem to flow smoothly, especially considering GLB3 have relied more on sea freight rather than air freight. According to Respondent B, it has affected the relationships of some suppliers due to certain pressures. In terms of the flexibility surrounding GLB3’s relationships with airlines and shipping lines, Respondent A thought that “contracts tended to be put to the side, while there was increasing accommodation between parties”. Alternatively, Respondent B found that most contracts with other parties including suppliers, airlines and shipping lines remained in place, however, there has certainly been an

“element of flexibility throughout the disruption”. In terms of the allocation of resources to customers, the business was fortunate that as the congestion and delay issues occurred, their peak season had mostly passed, so they were able to allocate resources reasonably well with their network of customers. Governmental involvement was limited, aside from the social distancing and general hygiene protocols that were put in place. They were also responsible for the subsided flights and an increase in freighter aircraft for exporters, both assisting significantly.

4.4.2.3 Post-event

Although New Zealand is in a semi-post event, Respondent B mentioned that “globally and from a logistics viewpoint, the industry is still in the middle of the pandemic”. GLB3 is still dealing with several issues including container shortages and port congestion all over the world. Respondent A stated that operations have seemed to experience minimal change as a result of COVID-19. The most significant concern facing GLB3 when leading into the peak harvesting season for products such as apples and stone fruit, is if they cannot be picked off the trees due to the lack of workers. The business has noticed that packhouses have an insufficient number of labourers due to the difficulties surrounding RSE workers arriving in New Zealand, so if they also lack a local workforce, it may result in fruit being left on the trees. GLB3 is experiencing an increasing number of disruptions now, especially in the sea freight side and that has made them anxious for the peak apple season. There is now a rather buoyant import market, having impacts globally, but also impacting New Zealand too. GLB3 is experiencing a shortage of labour at the Port of Auckland, but also vessels are queueing up, resulting in major congestion. Queues are also becoming rather problematic for GLB3 at ports in Los Angeles, the UK and Europe and that is an issue that will take some time to work through. Respondent A believes it will have a noticeable impact if these problems continue into the second quarter of 2021. The respondent went on to say that “these delays may impact the vessel rotation into New Zealand”. There is also a concern for GLB3 around the container availability in New Zealand.

When asked whether infrastructure repairs and restocking were necessary following the pandemic, Respondent B stated that both are crucial. Restocking is an ongoing task for GLB3, while infrastructure investment by New Zealand is “desperately needed”. According to the respondent, “the countries major ports have shown that they are not equipped to handle the

68 resurgence in freight volumes, evidenced by Auckland’s port congestion and the flow on effects around the country”.

Flexibility has also been a necessity for GLB3, and Respondent B agrees that it is the new nature of the logistics business. This flexibility is not necessarily regarding finding new customers, but more with existing customers and finding new solutions to keep their freight moving to international markets. The respondent is confident that the business can continue to operate through further disruptions. As stated, GLB3 has a resilient team and the attitude to find the right solution, provided they have access to electricity.

In terms of what the business would do differently in the case of another disruption like this, Respondent A stated that they have endured the Christchurch earthquakes, terrorist attacks and now a pandemic, and believe they are well prepared to cope with any other disruptions that they may face. They believe that the service industry is all about having communication lines open and the ability and willingness to WFH is also a bonus for the business. Respondent A stated that “ultimately the response comes down to how the Government approaches and leads it and then it is matter of adapting to the outcome”. Adaptiveness is a key factor in the post-event, that is supported by prior literature (Hecht et al., 2019).

4.5 Case Study 4 (GLB4)

4.5.1 Case Introduction

GLB4 is a German owned company and listed on the German stock exchange. The business has three key pillars to the business that operate globally, and they include: Global forwarding, express courier, supply chain services that involve warehousing and distribution. In New Zealand, GLB4 have two gateway offices based in Christchurch and Auckland. They also have sales representatives in Wellington and Napier, as well as satellite sales in Hamilton and Whakatane.

The Christchurch office employees 18 team members, while in New Zealand the business employees over 160 people. The air freight business unit exports 10-12 tonnes of perishable products a week, while the sea freight business unit exports about 10 TEU per week. Many of these perishable products are niche commodities that include chilled and frozen blood serum, hatching eggs, frozen human blood and honey.

Table 10- GLB4 respondent information

Respondent Role Experience with GLB4 Responsibilities

Respondent A South Island 14 years Oversees the operations in New Manager for GLB4 Zealand and acts as a senior leader spokesperson

4.5.2 Case Results

4.5.2.1 Pre-event

The respondent believes that the business was reasonably well prepared for a disruption to their supply chain. They stated that GLB4 did have a business continuity management system in place that allows them to access other functions of their business network that are not impacted. The respondent believes that “we were far more prepared than others in the industry for the recent pandemic”. In terms of preparedness, GLB4 ensured they had several pre-bookings in place prior to the outbreak. However, this only tended to work well for sea freight because the vessels generally continue to call, however, this is not so much the case for air freight, with airlines dramatically reducing the number of aircraft operating to certain

70 destinations. GLB4’s BCPs cover most disruptions including earthquakes, fire, threat to life, terrorist attacks, bombs, pandemics and epidemics, power outages and internal sickness. According to the respondent, within each BCP, there is a risk assessment phase. This covers the minimum standards that are required to keep the business operating and that can be as basic as the number of team members that are needed at the branch, or the equipment that is required to operate. Furthermore, the plans they have in place incorporate other organisations from their critical supplier list. These include airlines, shipping lines, trucking companies, temporary staff, agencies, packaging and equipment suppliers and their landlord. The critical vendor list is also put together in association with GLB4’s procurement team and national agreements with most of their vendors. This is a part of an audit that they must follow.

In terms of who has the primary responsibility for emergency planning and response in GLB3, it is generally determined by the specific branch manager. There are also three other team members who form the Incident Management Team. One is the warehouse supervisor and two other team members from the branch. Respondent A discussed how the policies are driven by the regional office in Singapore and they conduct the external reviews on the branch. The key points that they will examine are documentation and the facility. The incident management team assist in responding and recovering from a disruption.

GLB4 is a RACA approved site and that involves numerous security issues around freight safety and security, but also making sure that the products they handle are tamper evident. The business is also Transported Asset Protection Association (TAPA) approved. This is another layer on top of the Civil Aviation Authority of New Zealand (CAA) requirements and that will become evident during the potential transportation of vaccines for COVID-19.

4.5.2.2 Event

The impact of COVID-19 on GLB4’s operations was severe, with an immediate shut down on parts of their operation. From an air freight perspective, there were minimal aircraft operating and available to use, therefore limiting their opportunities. Again, the food supply chain’s reliance and vulnerability on transportation is supported by Luke & Rodriguez (2008). The respondent mentioned that one outcome that did help was “the Government’s involvement through the Ministry of Transport to implement subsidy schemes, leading to some aircraft

71 returning on a limited capacity”. A significant challenge that GLB4 faced was the availability of space on aircraft for their export customers sending frozen animal serum, as it was to be used in the development of potential vaccines for the pandemic. A large proportion of this space on the aircraft was instead used to transport large shipments of personal protection equipment (PPE). As a result, GLB4 had several discussions with various Government departments in order to access more space, however, this was to no avail. GLB4 was then forced to arrange their own aircraft charter network out of both Auckland and Christchurch. This did however allow them to gain full control of space to and from the USA, UK and Europe. Furthermore, it gave them the supply line that they needed for export customers, but also for inbound volumes coming back into New Zealand too.

The impacts of COVID-19 on sea freight were not as evident because the only determining factor was whether the exporters were able to operate. For the perishable exporters, there were not too many issues around this. The volumes for one of GLB4’s larger perishable sea freight customers continued on through the pandemic and there was no concern around their operations in comparison to their air freight customers.

GLB4 did not experience many delays at ports for both ocean and air freight. This was partly because their customers were not delivering the freight until they had secured a booking with the airline or shipping line. This meant that their customers were holding the chilled or frozen product at their site until GLB4 had a booking available for them. Respondent A noticed one case in Melbourne where several airport terminals were closed due to outbreaks of COVID- 19, however, this did not happen to impact GLB4. This disruption lasted 7-10 days and caused several problems for exporters and other GLBs.

In terms of what the respondent saw as the biggest surprise during the disruption, it was the speed that the disruption impacted GLB4’s operations. As well as this, the respondent was surprised by the way that their team reacted to the impact, with staff becoming increasingly dynamic in solution making. In a normal scenario, scheduled flights are far more consistent and straightforward to plan for, whereas at the current point in time, Respondent A’s experience with a lack of flights and inconsistent nature makes planning far more difficult. This means that last minute decisions are often required. Respondent A stated that “ultimately, it

72 was about taking whatever we had available to us, as well as being adaptable for each of our customers”.

GLB4 had never experienced a disruption like the COVID-19 pandemic, with the closest being the Christchurch earthquakes in 2011, however, that was a localised disruption and on a branch scale rather than globally like this pandemic. According to the respondent, some other significant differences experienced by GLB4 include the lockdown procedures, communication issues and a significant decrease in freight volumes. In terms of the communication difficulties faced, a lot of what GLB4 does is in a face-to-face environment with the operations team. Because they had team members working from home in lockdown, they were required to do daily video calls, provide updates and to communicate with all of the team at one time. This included overnight or daily updates from regional teams or customers, crucial to a disruption response according to BCI (2020). There were also difficulties around managing workflow while also considering other factors outside of the workplace that each team member was experiencing. Respondent A stated that this included things such as “mental wellbeing and family circumstances, while also knowing when to reduce workflow for certain people and being as empathetic as possible, while still trying to keep the business going”.

Respondent A discussed that the initial plans they had in place prepared GLB4 well for the COVID-19 pandemic disruption, allowing them to cope. Since the lockdown, GLB4 have conducted their annual employer opinion survey, a measure of active leadership and employee engagement. In 2019, the business scored an 87% acceptance level, while they scored 94% in 2020. That was deemed to be a good indication that the level and quality of information that GLB4 were feeding into their organisation was satisfactory for the team to feel as though they were being well looked after. The only adaptation that GLB4 made to their plans during the disruption was that they rotated team members in and out of the branch to allow for them to WFH.

When discussing GLB4’s supply chain response to the disruption, the respondent stated that the work they did around setting up their own air freight charter profile into Europe, the USA and the UK put them in a positive space with their customers. From a customer perspective, they believe that the business did well and were always willing to get the desired outcomes for both existing and new customers. The respondent did admit that there were some tense

73 situations with supply chain partners, however, “whilst the degrees of impact were different for each stakeholder, there was still common ground from the impact of the pandemic”. This meant that everyone understood the challenging circumstances, with mutual consideration given to one another. GLB4 found that they became far more forgiving and understood that if customers or suppliers showed signs of frustration or anger, it was because they were experiencing the same problems as GLB4. In terms of the existing mutual agreements or contracts between certain parties, the respondent found that they tended to disappear or be overwritten as most organisations enforced ‘force-majeure’. Any contractual obligations that shipping lines or airlines had with the business were gone. However, GLB4 were required to write new contracts for their charter operations in order to guarantee access to an aircraft and the flight crew per trade lane, as well as a specific payment commitment.

In terms of GLB4’s resource allocation during COVID-19, the respondent noticed that inbound sea freight maintained a steady level, while inbound and outbound air freight did not. Where they had daily flights, they were down approximately two flights a week, resulting in the team being busy for two days of the week and quiet for the other three. It was a matter of planning for the following day the night prior and dividing where the resources needed to be for each part of the day whether it be morning, lunchtime or in the evening. This also involved ensuring they had available team members to slot into those spaces to provide assistance.

The Government did provide some advice and guidance during the pandemic. GLB4 was involved heavily with the Ministry of Transport during this time, particularly around the charter flights that they were operating. GLB4 were receiving enquiries from various customers who were trying to acquire space on these flights, so they had to be engaged with the Government to arrange this. GLB4 was also involved with NZTE, but this relationship was more associated around providing an awareness of GLB4’s capabilities so that NZTE could direct any struggling exporters to them to assist.

4.5.2.3 Post-event

When discussing the current operations, GLB4 divide their response between air and sea freight. In terms of sea freight, not a lot has changed regarding their volumes. The change has been around the business’s ability to obtain reefer containers, simply due to the reduction in the number of inbound vessels. There has also been several blank sailings of vessels, so that

74 compounds the problem of attempting to get space on the available vessels. These vessels are omitting the Port of Auckland, but in some cases Lyttelton Port and diverting to Timaru. Respondent A has found that “all of these issues add another level of complexity to the supply chain because we are then required to pick up their containers from the port of discharge or arrange for the export containers to be repositioned to the port of pick up”.

From an air freight perspective, the volumes for GLB4 have returned somewhat, but not quite to the level that they were at prior to the COVID-19 disruption and are not expected to be until at least March 2021. The traditional peak for New Zealand’s air freight exports from November through to March is however bringing those volumes back where they should be; an encouraging sign for GLB4. The respondent stated that “until the business begins to see an increase in scheduled aircraft arriving in Christchurch to move their customer’s exports, then there will continue to be challenges”. Many of the Government’s subsidised flights are also having their funding cut and this is impacting exporters in a time where they are demanding more capacity. In terms of the upcoming peak season for stone fruit, GLB4 has allocations with airlines on the existing services out of Christchurch, but where they see the complexity is that they have more freight than they have allocations for, meaning they are then chasing capacity that has already been assigned. This will likely lead to a backlog of freight and that is not an ideal situation for the perishable products that they handle.

GLB4 was asked whether they have made any infrastructure repairs or re-stocking as a result of the COVID-19 disruption. One infrastructural change that was made in this time was GLB4 built a cold-store facility on site for the storage of chilled or frozen perishable exports. This change aimed to move GLB4 further into the perishable market, however, the respondent believes they have chosen the worst year to go ahead with it. They have noticed a significant number of exporters going back into their shell as a result of the pandemic, with no interest in switching freight forwarders and wanting to return to a sense of normality. Some potential does lie in the potential storage of vaccines for the COVID-19 pandemic.

Flexible relationship building with new customers and suppliers was essential during the pandemic for GLB4. Several exporters were under pressure because they were not getting the required support from their existing freight forwarders, so GLB4 were tasked with taking on

75 new customers and meeting their specific demands around required delivery dates to overseas customers.

The respondent believes that GLB4 could have managed team members working from home better than they did. It is an ongoing topic of conversation within their senior management team of how they would approach it differently. Team members have started to question whether they can continue working from home, however, the issue is the importance of team collaboration and face to face discussion. Respondent A admitted that they may transition into a rotational schedule in the future, spending a week in the office followed by a week from home. In terms of their physical operations, the respondent believes that they performed well and would not want to alter their response. The respondent also has a confidence in GLB4’s ability to perform during another disruption. Several competitors have since communicated their struggles and stated that in times like these, working for a multi-national company is far more of a safeguard from economic impacts.

4.6 Case Study 5 (GLB5)

4.6.1 Case Introduction

GLB5 is a New Zealand owned and operated company established in 1992, offering warehousing and logistics solutions globally. GLB5 operates three facilities with one in Christchurch and two based in Auckland. These facilities predominantly handle perishable commodities, however, can provide services for a wide range of products.

The perishable products that GLB5 export out of New Zealand include chilled and frozen meat, live and frozen seafood, fresh and frozen produce, freeze dried products and deer velvet.

Table 11- GLB5 respondent information

Respondent Role Experience with GLB5 Responsibilities

Respondent A Export sea 4 years Manages the export containers and freight consolidated ‘less than container load’ manager (LCL) cargo shipments

Respondent B Export air 7 years Manages the perishable commodity freight exports from Christchurch manager

4.6.2 Case Results

4.6.2.1 Pre-event

In terms of the business’s preparation for disruptions, Respondent A stated that GLB5 was not prepared for a disruption of this scale, however, believed that because they had cemented such strong relationships with airlines and shipping lines it would suffice. The business had a continuity plan in place as it is mandatory with a risk management plan (RMP), but its core focus was on day-to-day operations and how they would operate without internet or computer access. According to Respondent B, another requirement for any perishable food facility in New Zealand is they must have RORPs in place. This covers outbreaks and the procedures that are in place for notifying stakeholders and shutting down the business. This is the only planning that the respondents believed would help contain the situation if it was to be isolated to GLB5. When asked if any other organisations were involved in the plans of GLB5, the respondents stated that “outside of notifying the customers of any changes in

77 procedures, there was no external involvement”. Because the majority of GLB5’s customers export primary products and were considered essential services, they all continued to operate under the nationwide lockdown in New Zealand. MPI had implemented a safe practice protocol and were continuously monitoring sites. All of GLB5’s customers that were operating during this time were under the same scope of MPI, so the business’s expectation was that they were maintaining the same safe practices.

In terms of the extent that supply chain specialists were formally involved in the GLB5’s planning, they predominantly rely on senior management, health and safety or the human resource (HR) teams. The respondent admitted that “there is insufficient time to be consulting team members about the disruption planning”.

4.6.2.2 Event

Both respondents made mention of several impacts on their exporting operations as a result of the COVID-19 pandemic. The business took the outbreak seriously from an early outset and this did have positive attributes to their overall response, however, there were still several significant challenges that they faced. The respondents believe that no one in the industry was prepared for the number of people having to WFH and this was difficult and disruptive for some. GLB5 found that after adapting to the initial change, most team members adjusted to WFH. The business also noticed a few mandatory Government requirements that were put in place by MPI as a result of the pandemic, verified through literature (Ivanov & Wendler, 2020). One that was initiated was a ‘Safe Practices’ protocol whereby, GLB5 and other logistics providers or exporters were required to outline the safe practices that they had in place. These were then featured in fortnightly inspections carried out by MPI that tended to verify that GLB5 did not have any external workers operating within their facility and that they were socially distanced correctly. These steps were compulsory, or the business was not able to operate in compliance with MPI. As well as this, if New Zealand was in a Level 2 lockdown or higher, or there was a COVID-19 outbreak in proximity to their branch, GLB5 were required by their Chinese customers and markets to provide temperature checks of each team member. If any results exceeded the accepted temperature, the specific team members were required to leave to facility.

From a sea freight perspective, operations continued because the ports stayed open. GLB5 had issues with China initially, because some of the ports were closed or congested to the point where all the reefer power plugs were already in use. In cases like these, they had to find vessels at some of these specific ports in order to store the reefer containers because most importers were closed and therefore could not receive containers. This also led to a lot of equipment being immobile at these locations until workers returned to their jobs. Respondent B discussed how significant amounts of product destined for markets in China ended up being sold to European markets, meaning that there was then a backlog of cargo from exporters making this change to attempt to re-route products to Europe. As well as this, there has been issues with overseas truck drivers that have disappeared due to the COVID-19 outbreak, meaning there are more surcharges and delays as a result. Respondent A did however state that “it has seemed like a peak season all year around for sea freight, so although there has been several problems, freight has continued to move”.

Alternatively, GLB5’s air freight operations have been impacted far more drastically as a result of COVID-19. From approximately mid-March 2020, prior to the nationwide lockdown in New Zealand, GLB5 were already experiencing major flight cancellations. The business was in the midst of a 900-tonnes meat programme that was all destined for air freight on passenger aircraft. GLB5 lost out on exporting 400 tonnes of this product due to the drastic decrease in the number of aircraft operating during COVID-19. This supports the theory of Luke & Rodriguez (2008). The price to move this product to overseas markets became prohibitive. Respondent B was notified of new flight cancellations each morning, even for product that had already been transported to the aircraft ready to be loaded. Respondent B stated that “this is why our relationships with each airline are critical, because they are imperative to continuing to move products”. Respondent B noticed that during the pandemic, airlines began to only deal with freight forwarders that they had strong existing relationships with. Some freight forwarders that did not have these relationships, found it difficult to acquire any space as a result. Some common issues that GLB5 would face became far more complex during the pandemic, when they were normally simple to resolve. During the lockdown there were a minimal number of domestic flights operating in New Zealand, so GLB5 went from having 12 or 13 daily flights from Christchurch to Auckland, to some days only having one available flight. This meant that airlines were having to operate new flights in order for GLB5 to get their products to Auckland for export. In some cases, GLB5 experienced freight space on domestic

79 flights from Christchurch to Auckland costing more than it would to export the same product to Shanghai. GLB5 are also now seeing several airline cancellations with Europe returning into lockdown. A few suppliers for GLB5 will ship to food service or hospitality customers, so when certain countries or states enter lockdowns, these customers have commonly disappeared. Other customers that sell to retail and large supermarkets have continued to operate as essential goods have continued to move through the pandemic. GLB5 has also experienced volatility in the USA, where they export large quantities of seafood. They have experienced several quiet periods when specific shops and restaurants are closed and then significant increases in demand as they return, as found in prior literature (Ivanov, 2020).

When asked whether the business has experienced delays or a loss of products due to the disruption, the respondents both agreed that neither air or sea freight saw a loss of product, however, Respondent A stated that sea freight did experience some delays, but this did not affect the product and instead raised the rates for certain customers. Regarding air freight, Respondent B said that the business did not see a loss of product sales to overseas markets, however, this just meant the product had to sell on the domestic market for lower prices. The problem with this is that the New Zealand market is too small to be able to support all these products at once. Some crayfish were sold on the domestic market as a result of the initial outbreak in China and a loss of overseas sales, however, a large amount was also returned to the sea due to the domestic market being too small in New Zealand.

The biggest surprise for Respondent A during the pandemic was how GLB5’s operations “continued to flow despite the challenges they faced”. Team members responded and adapted well to the new systems that were put in place, as well as online documentation creating a simpler process during COVID-19. Respondent B was surprised by the change in decision making and backing from senior management to make decisions on the go, rather than requiring every decision to be signed off. Another surprise was realising how little people outside of the industry knew about the volumes of freight that go on passenger aircraft, even including the Government. Some of GLB5’s customers still question why the freight rates are so high despite the various COVID-19 impacts on supply chains globally.

The respondents were asked whether GLB5 has experienced impacts like this pandemic before. For air freight specifically, GLB5 have not experienced any similar disruption to COVID-

19, however, they have experienced other significant disruptions. One of these includes the Christchurch Mosque terrorist attacks in 2019. Their major meat programme was delayed due to several of the Halal meat slaughter men being on leave due to the attacks. Once all of these workers then began to return to work, a large volume of meat was then pushed through the supply chain. This meant that GLB5 went from having five weeks to move the product, to three and a half weeks to move the same volumes. GLB5 only had a set amount of air freight capacity to move the product, so these constraints made it challenging. Alternatively, for sea freight, disruptions can be as basic as port closures or bad weather. In some cases, it is even challenging to pick up empty containers when there are strong winds because yards will decide to close temporarily. Some other disruptions that have impacted GLB5’s sea freight operations are the port strikes that have been ongoing in Australia, causing major delays. Respondent A believes that this is one of the factors resulting in there being equipment shortages in New Zealand, so regardless of the peak season, there is not enough equipment or space on vessels to operate normally. Furthermore, the respondent stated that “delays of containers overseas is leading to containers departing late from New Zealand or Australia to overseas markets too”. Another disruption was the death at the Port of Auckland in August 2020 that has also had a drastic impact on GLB5’s operations, with the port operating one less crane. This means that when delayed containers arrive in Auckland, there are then additional delays as a result. GLB5 are seeing vessels now omitting certain ports including Auckland due to these delays, creating further issues for their sea freight operations.

The respondents found that although at the time of the pandemic it felt overwhelming, on reflection, they found that GLB5 responded well despite having no specific plans in place. Several adaptations were made to their response including the safe practices protocols introduced by MPI, involving hygiene and social distancing, but they also agreed upon a plan with another freight forwarder based in Christchurch, whereby, if one was to get closed down due to a COVID-19 outbreak, the other can act for them and provide support. This arrangement removes any stealing of business and maintains operations until the specific business is up and running again. That is a reciprocated situation. As well as this, the business’s two branches in Auckland were able to relocate team members to assist in other parts of the business where required.

In terms of GLB5’s supply chain response, the main link is their supplier to customer relationship. Some of their relationships adapted well to the disruption response, while others did not. One procedure introduced by Air New Zealand during COVID-19 was that any bookings made within a 72-hour window of a flight departing were locked in and charged out to the exporter. This tested GLB5’s supply chain relationships as several customers found it difficult to fulfil these bookings regularly. Respondent B believes that “the business’s strong relationships with airlines was the defining factor in keeping them operating”. GLB5’s senior management has always advocated for these relationships with airlines, especially with Air New Zealand as they want to support the national airline. Some airlines have been creative when thinking of alternative methods to keep products moving. Although most airlines were not operating into New Zealand, there were several options in and out of Australia, so it was a matter of working with different airlines to solve the shortage. There have also been several airlines who have disappeared during the pandemic according to Respondent B. The majority of GLB5’s key customer relationships were made stronger as there was more close communication with one another as a result of the disruption. One or two customers may have not been satisfied with the outcomes, but they would have realised that it would have been the same outcome regardless of where or who they did business with.

When asked if there was flexibility or whether contracts controlled relationships, Respondent B stated that “although contracts did not necessarily disappear, there had to be additional flexibility in terms of pricing or else it would have been far too difficult to maintain”. The respondent has also found that quoting has become increasingly difficult as airlines are continually competing worldwide and rates have continue to soar. Many service level agreements have been lost too because the flights have been so disrupted. In terms of sea freight, GLB5 had many allocations for their customer’s seed products at the beginning of lockdown and that was helpful, but in the current circumstances it is no longer a matter of price, but more about ensuring the product gets to market on time. When allocating resources to customers, GLB5 found it difficult to allocate labour to certain departments where they were needed due to limited travelling during the nationwide lockdown in New Zealand. GLB5 were moving a lot of their air freighted exports to Auckland and that was deemed to be a burden to the Auckland branch. Usually, GLB5 would be able to allocate team members to Auckland from Christchurch, but this was not possible given the circumstances. It put a great

82 deal of pressure on certain departments within the business. Respondent A stated that “it was then a matter of maintaining workloads and allocating resources as best as possible”.

In terms of the advice given to GLB5 by the Government during the pandemic, the respondents found that whilst they are impacted by the Government and what they were doing to assist at that time, it was more indirect because it was coming from airlines or customers who were seeking Government subsidies for freight. Most of the flights are subsidised by the Government and that was something that took time to come to fruition. Respondent B discussed how there were several periods where other Governments such as Singapore, who rely heavily on the importing of produce, were contacting the New Zealand Government demanding help from primary exporters. However, instead of the New Zealand Government contacting freight forwarders or exporters directly, they tried to do it themselves and then have the whole supply chain jump into line. This resulted in aircraft being sent half full and inefficiencies occurring across the industry. There were certainly some departments that were helpful and that includes the Ministry of Transport who played a huge role in keeping air freight operating. The respondent went on to say that “if it were not for them, most of the pricing would have been prohibitive for exporters”. One problem that GLB5 recognises is the Government cannot afford to continually support flights with the rates they are charging, and exporters cannot pay the prices that they need to charge to keep the flights going. The only thing that has held this together until now is the subsidies, however many of these have ended. These flights could be filled with almost double the freight capacity, with demands significantly higher than the available space.

4.6.2.3 Post-event

In terms of how GLB5’s operations currently look, Respondent A stated that there is a number of flow on affects for sea freight, one being the examining of containers to test for COVID-19. Respondent A added that this had led to some ports experiencing major delays and therefore, cargo at other ports is missing the vessel. As well as this, sea freight is continuing to get busier and with the current implications including equipment shortages of containers and a lack of capacity, this concern grows for GLB5. Respondent A stated that “as long as the vessels continue to move, so will the products”. For their air freight operations, Respondent B stated that the business is now in a position where airlines have adjusted to the situation and are running charter flights, as well as, understanding the demands of freight space for exporters,

83 so as a result, GLB5 are operating well. Another positive sign is that customers have adjusted to the pricing changes of air freight. Respondent B believes that GLB5’s workload is going to be highly inconsistent, whereas in the past the workload would decrease in the winter and pick back up in the peak season from October to March. This lack of consistency around workload is probably the biggest concern facing GLB5.

In terms of flexible relationship building during the pandemic, GLB5 believe that their senior management team was influential in accomplishing continual sales and finding new business. Some international markets had rapid demands for certain products due to factories closing, so some new business was sourced from that, backing prior literature (Ivanov, 2020)

When asked what the business would do differently in responding to a disruption of this nature, the respondents agreed that they could have been more proactive closer to the initial outbreak. There were many cases where the response was reactive rather than proactive and this could have been different. From a business perspective, Respondent B believes that GLB5 did well. They were available 24/7 for their customers and did everything they could to keep their products moving. One thing to improve on may be their complacency during the pandemic as they were assuming some of their customer’s loyalty. According to Respondent B, regardless of the effort that is put in, customers can move on in an instant, even for a few dollars difference.

Both respondents had full belief in GLB5 that they are well placed for another disruption and will be able to respond proactively. All the team members were on-board and came together to get the job done. Respondent B believes that if they were to experience another outbreak now, they would continue to operate as they have the capacity to do so with the airlines beginning to operate aircraft without the reliance of passengers. In the past they have relied on passenger volume without regarding the freight.

4.7 Case Study 6 (GLB6)

4.7.1 Case Introduction

Headquartered in Germany, GLB6 is a freight transportation and logistics business comprised of four divisions: Air freight, land, sea freight and contract logistics. The business employs over 72,000 people throughout the world, located in approximately 140 countries. Its parent company is a major German rail operator, acquiring the business in 2002. GLB6 operates 60 team members in Christchurch and 300 across New Zealand.

The business covers both refrigerated and dry goods including meat, seafood and all types of perishable produce.

Table 12- GLB6 respondent information

Respondent Role Experience with GLB6 Responsibilities

Respondent A National Product 1 year Procure shipping rates with Manager for sea Carriers and manage NZ’s import 30 years in the freight and export container movements industry

4.7.2 Case Results

4.7.2.1 Pre-event

The respondent believes that GLB6 was prepared for a disruption like COVID-19 because they were not significantly impacted by the pandemic, it was more the market downturn of product moving that was the concern. When asked what the business was doing do prepare for such disruptions, Respondent A stated that “we can only follow what the market does, more so when countries start purchasing volumes again”. They continually evaluate alternative shipping options and pricing, as well as value added services such as offering customers other solutions like air freight to certain markets. The business commonly prepares for shipping line changes as they are integral to the business; however, a pandemic was not a disruption that GLB6 planned for. Most of their planning was surrounding natural disasters and cyberattacks and this planning has been happening for several years. This also supports prior literature (Ying et al., 2007). All companies are prone to cyberattacks, so that was already something GLB6 was following closely. Natural disasters are another disruption that the business has planned for as New Zealand has recently experienced several major earthquakes, but also flooding and

85 road closures, so the business is somewhat prepared in that sense. All team members are equipped with a personal laptop that they can use if required to WFH or out of office.

In terms of risk management processes or tools that were in place to identify and access risks, GLB6 consider themselves a global company with senior country managers, as well as a board of directors who are constantly monitoring any kind of risks such as war, cyberattacks or shipping company changes. Ultimately, it depends on what the risk is as to the detail of actions GLB6 need to enforce. These senior managers generally cover each department of the business such as customer service, operations, HR and the commercial side of the business. This group is called the Senior Leadership Team. The business has documented handbooks on actions and what is required in the event of a crises, as well as the ‘go to people’. According to Respondent A, their response plans are broad for all types of disruptions. However, the respondent stated that “for cyberattacks, we have a specific plan because it is a technical issue and there is a certain procedure that IT team members need to follow”. A disruption like this specifically affects the business rather than the health of the individuals like a pandemic. That is the only real difference between the planning of different disruptions. The New Zealand National Manager of GLB6 has the final say on the plans before they are put into place.

The plans of GLB6 do not currently involve any other organisations that Respondent A is aware of. Potentially at a global or senior country level there will be engagement either with the New Zealand Government or Government departments, as well as the ports and their senior management. The respondent believes that there is only communication between customers rather than them being fully involved in the plans because they want to avoid skewing a line over who is in charge. It is more about demonstrating to customers that the business is in control of their products and proving they know what they are doing. GLB6 does not consider the Government to have any mandatory requirements they must follow however, Respondent A stated that “if there are any, we will be sure to follow these”. This differs from the findings of prior literature (Ivanov & Wendler, 2020).

4.7.2.2 Event

According to the respondent, GLB6 did not react quickly to the initial outbreak of COVID-19 because they did not know the full extent and severity of it. The respondent believes that people, especially in New Zealand forget how serious it is on a global scale. GLB6 were required to introduce continuity plans and arrange for team members to be working from

86 home immediately. They were fortunate to have the equipment and capability to make that work. Respondent A noted that split shifting team members, following social distancing protocols and setting up WFH were the key changes that had to be made. The general assumption is that team members working from home would not be as efficient in their work, however, most of the team were found to be working longer hours because there was a lot more involved with zoom calls and checking in with other team members. The respondent found that everyone followed the discipline well. Because all the team members had a laptop that they could work from, it was more a matter of honesty when working from home. It was easy to adapt and many team members preferred it.

In terms of the impacts on GLB5’s supply chain, the movement of non-essential goods came to a halt with many of the facilities for manufactured goods temporarily closing. Overall, volumes dropped off however, food and other perishable products were deemed essential, so these products moved but at smaller volumes. The respondent found that the airports basically closed, so there was little to no aircraft operating. They added that “in order for airlines to make a profit they were needing both passengers and freight”. Ports also struggled but they were accommodating and doing the best they could, but there was increasing collaboration rather than finger pointing in order to make everything work. GLB6 found that retail food products were frequent movers as they were demanded frequently in supermarkets and essential shops, while food service products that are commonly exported to overseas restaurants and resorts came to a rapid halt with food service being limited during the pandemic. These changes in demand support prior literature (Ivanov, 2020).

Another noticeable impact discussed by Respondent A was a decrease in port labour and efficiency during the New Zealand lockdowns as everything seemed to slow down, especially during the Level 3 and 4 lockdowns. This impacted the operations of GLB6 to a small degree because ports were having to work with skeleton staff, however, they did well despite the challenges. The biggest surprise for Respondent A during the disruption was “the sudden shortage of air freight capacity”. There was a significant shift of customer’s products from air freight to sea freight and this was a necessary method in order to get their products out to market. Due to the large influx of sea freight, the respondent believes it has resulted in congestion issues and a lack of capacity on vessels. GLB6 did see a change in their markets and routes as COVID-19 spread globally. Most countries closed their borders, so shipping lines had

87 lesser ports to call according to the respondent. The changing of markets and routes is something that the business experiences on a regular basis, but not to the extent they have experienced during the pandemic. They went on to add that one significant issue heading into the peak season for both New Zealand and Australian exports is the limited airline options and unaffordable rates for some exporters.

When comparing COVID-19 to other disruptions, Respondent A believes that it was like the Christchurch earthquakes, however, “this disruption was global rather than on a local scale so other ports were also impacted and there were limited options for moving cargo”. Financially it is the biggest challenge that the business has faced to date. The trades and volumes that have been lost have been much greater than that of other disruption. The damage caused by earthquakes tend to be repairable in a short period at a local level, while a pandemic is global and causes much more significant financial damage compared to infrastructural damage.

The plans that were in place for GLB6 “were as good as they could be” according to Respondent A. They made no adaptations and found that they had a strict plan and followed it throughout the pandemic. Because their customers who handle food and perishable products were deemed essential, the business found that the disruption did not impact their supply chain. Conversely, it had more of a positive impact on their supply chain relationships as they became closer with their customers and other stakeholders in the industry. The respondent found that there was additional flexibility and understanding between parties, especially surrounding loading times at ports. In terms of the allocation of resources to customers, GLB6 have priority customers with essential items and they were the first to be approached. When GLB6 categorises priority, it does not solely depend on who pays the most but also the type of product. Generally, product that needs to move urgently takes priority over product that does not. For example, in the peak season, cherries and other stone fruit must move first due to its short life. It is an expensive commodity that endures 11 months of growing and nurturing on a tree, for a six-week window of selling and moving the product to market. The same goes for shellfish and crayfish, but this market was hit the hardest during COVID-19 because of China’s lack of demand. Respondent A noticed that this led to some of the product being returned to sea or being sold on the domestic market at a quarter of the price.

GLB6 did receive Governmental assistance during the pandemic but it was indirect. This related to the subsidies the Government provided in order to have aircraft operating again. The respondent believes that the subsidies were used correctly and under the appropriate protocols. Each business that utilised the subsidies benefitted from them as a result.

4.7.2.3 Post-event

When looking at the current operations of GLB6, the business is slowly returning to normal, however, different systems are now in place around additional processes and awareness. Due to COVID-19 the business has escalated their processes of preparedness including: More frequent meetings, contingency plans, team member safety, protection or wellbeing and lastly, regular town hall meetings as communication is crucial. Respondent A also stated that they are experiencing severe delays and equipment shortages as a result of the pandemic. They are in the hands of the Carriers, but they are aware of their struggles too, so it is a mutual problem within the industry. The respondent believes the problem will resolve itself, but it will be another few months away.

Respondent A stated that “the flexibility of relationship building including additional communication, support and kindness was crucial, however, the business did not receive any new customers during the disruption”. The significant shift has been customers switching from air freight to sea freight. When asked what the business would do different in the event of another disruption, the respondent stated that most things did work. They believe that having a plan and a lead team to guide and drive the changes was the correct approach. It was also crucial to listen to the Government and communicate with customers and team members on a regular basis to provide guidance, backed by prior literature (BCI, 2020). The respondent stated this is likely one of the more serious disruptions that they will encounter and if there are planned contingencies and leadership in place, GLB6 should be sufficiently prepared. Now that a pandemic has occurred, the business can build on a contingency disaster plan that focusses on new pandemics or waves of COVID-19 in the future. The next steps are in place, but to what degree is uncertain. In some ways the response is determined by the leaders of the country to give the correct advice and actions, as well as taking the appropriate measures.

4.8 Case Study 7 (GLB7)

4.8.1 Case Introduction

GLB7 is a freight consultancy business owned and operated by Respondent A in Christchurch. The business assists freight forwarders where they need guidance around their supply chain or operations. GLB7 was founded in 2019 and has since been highly sought- after during COVID-19 and the impact it has had on businesses.

Table 13- GLB7 respondent information

Respondent Role Experience with GLB7 Responsibilities

Respondent A Sole 2 years Providing freight forwarding operator businesses with assistance and 25 years in the industry information around certain aspects of their supply chain

4.8.2 Case Results

4.8.2.1 Pre-event

Respondent A does not believe anyone was prepared for a disruption like COVID-19, or considered the length of time their operations would be impacted, as supported by literature (Ivanov, 2020). They are aware that most businesses in the current environment are prepared for some disruptions such as earthquakes, especially those in Christchurch that have dealt with them before. According to the respondent, other disruptions that are commonly prepared for include production delays, fire, floods and loss of power, however, “a pandemic was one disruption that was not expected or thought about until it occurred”. For the most part, businesses within the industry have contingency plans that cover disruptions like these. The respondent agrees that most plans are broad and are not specific in how to respond to each type of disruption, but rather a wider response plan for any type of disruption that may occur. It is a matter of adapting and responding to the situation at hand.

Respondent A believes that firms commonly involve other organisations in their specific plans. When discussing perishable products, GLBs utilise air and sea freight specialising in moving those products, as well as complying with mandatory MPI requirements and documentation for overseas markets. Therefore, Respondent A believes that organisations such as these

90 would be involved in the planning phase for most GLBs. Regarding supply chain specialists being involved in the planning, the respondent believes that this is uncommon. They described how most of the planning is commonly discussed between board members, senior team members or managers rather than operations team members. According to the respondent, “the Government also has little input into a business’s plans or mandatory requirements, other than MPI or other organisations that have mandatory requirements for exporters”. This may cover factors such as acceptable water quality and use at packhouses as well as other market requirements that are specific to a destined market, as supported by literature (Ivanov & Wendler, 2020).

4.8.2.2 Event

From the respondent’s perspective, the initial impact of COVID-19 was the lack of air freight capacity due to a sudden decrease in passenger volumes. The Ministry of Transport and Ministry of Foreign Affairs and Trade did however act swiftly according to Respondent A, by introducing subsidies with help from the IAFC. They were able to assist in keeping a small number of aircraft operating. Regarding sea freight, the respondent is now beginning to see delayed impacts as a result of the pandemic. The respondent pointed out that there are also “several external influences on some of these impacts including port strikes in Australia and various issues at the Port of Auckland including a fatality that resulted in reduced shifts”. This has led to countless vessel delays while they wait to be able to call port. Furthermore, Respondent A has noticed that there is now also a major imbalance of containers globally and the supply of these for the peak season is crucial in New Zealand for exporters. Heading into the peak season for meat, dairy and apples in February to March 2021 in New Zealand, the respondent expects to see more of the same or worse issues as these problems continue to accumulate, so there is potential for serious harm to the industry if these are not resolved.

When asked if any products had been lost or degraded as a result of the delays at ports, the respondent stated that they were not aware of this happening in New Zealand, but more so overseas. According to Respondent A, there were large quantities of certain products including Chilean cherries that were lost due to major congestion and containers being stuck at ports during the initial lockdowns in China. Furthermore, most food products or perishables were considered essential products in New Zealand, so there was a certain priority given to

91 them. This ultimately reduced the likelihood of delays or loss of some products, including perishables, due to the pandemic impacts.

The concern for Respondent A is the sea freight impacts that will likely occur in February or March 2021 in New Zealand. The respondent predicts that there will be a significant problem going forward as there is not enough vessels calling New Zealand in comparison to the volumes of exports that require space. Unlike switching from air freight to sea freight, it is much more difficult to switch from sea freight to air freight in the current situation. The respondent continued by discussing how although some air freight services around the world have continued to operate, freight rates are considerably higher, meaning the price will be prohibitive for certain products, but secondly, there is not sufficient capacity to transport the sea freight volumes that are being exported.

Respondent A found that “the pandemic impacted businesses differently than other disruptions because many of them moved to working from home during the lockdowns, even while being deemed an essential service”. Most freight forwarders had team members that did not come into the office, with the exception being storemen that had to be on site. The respondent believed that this was not a major change considering WFH was always a possibility within the industry. They noticed increasing amounts of flexibility in how operations were carried out by GLBs. Respondent A believes that most firms have looked at their business and the plans they have in place since the disruption and made improvements as a result, with some still implementing new aspects to their response. Furthermore, they stated that “the majority of GLBs have considered at how they can cope in a lockdown scenario as well as how to enhance their approach”. The respondent believes that New Zealand has coped well despite changes in the working environment and how operations are now carried out.

Respondent A advocated that the supply chains of most GLBs have responded well to COVID- 19. They mentioned that “it has however come at a cost for these businesses regarding the additional steps that must be implemented including social distancing and PPE”. This coincides with the findings in prior literature (Ying et al., 2007). The increased costs and lack of availability for sea freight, air freight and trucking has taken its toll on many exporters. Respondent A has noticed these factors contributing to negative impacts on some supply chain relationships. For example, GLBs on several occasions have been unable to move their

92 customer’s products due to a lack of capacity, or prohibitive freight rates. The respondent went on to add that many exporters have lost business due to not being able to fulfil their customer’s needs during the disruption. Luckily for most perishable exporters, food products have been considered essential and because there is a constant demand, GLBs will always have that product to move. The respondent also believes that because New Zealand’s COVID- 19 response has been successful in comparison to other nations, it has been highly beneficial for the nation’s trade. With little to no community transmissions after the lockdowns, GLB’s supply chains can continue with minimal limitations.

Respondent A made it clear that GLB’s supply chain relationships have been flexible during this disruption and there was a need for everyone to work in unity. If an aircraft was going to operate, then it needed to be full in both directions for it to be worthwhile. This was where communication and flexibility between exporters, airlines and other stakeholders was key. The respondent also stated that “pricing has been rather volatile, so there has been flexibility regarding the freight rates that are being offered and these have been clearly communicated to the exporter or GLB acting on behalf of them”.

In terms of resource allocation to customers, the respondent stated that most GLBs have continued to trade and provide the resources that their customers require. While it may not have been within the same timeframe prior to COVID-19, freight forwarders have mostly been able to continue to achieve this. Respondent A noted that perishable exporters can commonly handle the additional freight costs, especially for air freight rates that have increased dramatically over the pandemic. This differs to dry-good customers that “may struggle to justify increasing rates into certain markets around the world”. That is why it is crucial for GLBs to communicate with their customers and understand their desired method of transportation for their products. BCI (2020) agrees that communication with customers is key during a disruption response.

4.8.2.3 Post-event

According to the respondent, the Ministry of Transport have announced a summer air freight programme that will be highly beneficial to New Zealand exporters, covering the Christmas meat and cherry programmes, as well as the stone fruit and seafood products heading into markets for Chinese New Year. Respondent A added that the likelihood is by March 2021,

93 these subsidies will cease and air freight services are going to have to support themselves. Furthermore, the respondent believes that long term, the air freight market for perishables is going to be difficult, where prices are going to be considerably greater than what they were prior to COVID-19, potentially doubling or tripling in price for certain products and destinations. Currently, the rates for cherries are at $4.50 – 5/kg to most markets, almost double what it normally would be, while still being subsidised. When these subsidies end, those figures will more than likely increase, according to Respondent A. “The long-term effects may also lead to a process where the industry determines what products have a need to be exported via air freight and what products can go via sea freight”. The respondent added that products such as meat may be shifted to a sea freight requirement and exporters may need to find a solution to having a shorter shelf life of it on the market because they can export it cheaper via sea freight.

Next, Respondent A discussed how the decision is made as to what products make it on a flight and the determining factors. Firstly, it is based on the destination that the airline is flying to, so for instance, the airlines have offered several flights to multiple destinations from Christchurch including Taipei, Shanghai and Taiwan, so if they have enough support from exporters they will proceed. Next, it is about where the price sits and what products can withstand that price and that can be determined by the market and how competitive that space is to those markets. The respondent added that the demand within those markets must also still be viable, as consumer spending may have decreased during the pandemic. The product needs to be sold at a respectable price for the exporters to be able to afford the freight rates while also making a profit. There are multiple factors that determine what is loaded on to an aircraft and it is simply not only about who is willing to pay the most.

While observing the industry, the respondent is seeing that there are cases with certain products or industries where exporters can no longer afford to use air freight as a mode of transport and are therefore switching to using sea freight. For example, the majority of avocado exporters have switched as a result of the air freight rates increasing. According to Respondent A, there has been some discussion over a “multi-modal sea and air freight scenario where products such as avocados or meat are air freighted a partial distance to market and then sea freighted the remaining distance to the final market”. This shortens the

94 transit time, but also lowers the price for exporters. The respondent has noticed that multi- modal transport is becoming highly beneficial to some exporters during the disruption.

Respondent A stated that at the current point in time, the industry is not experiencing the full effects of the pandemic because subsidies are still being granted by the Government. Ultimately, they are not going to be supported long term and the Government has specified this. The respondent believes that at the end of March or April 2021, businesses utilising these subsidised flights are going to have to support themselves if they intend on continuing operations. As soon as international passengers numbers return again, that will in turn lower air freight rates, however there is no certainty around when this will occur. Respondent A made the comment that “New Zealand may start to see a greater number of tourists as the borders open, due to the limited community transmissions and the success of the COVID-19 response”.

The respondent believes that one potential improvement GLBs could make in response to this disruption communicating when certain issues arise. They stated that some products were unable to be harvested during the lockdown because there was insufficient labour to be able to do it, but as well as this, there may not have been markets available for these products either. The products in discussion were those commonly sold at local farmers markets, so they may have also lost their ability to sell in lockdown too. The respondent mentioned that communicating these issues when help is needed to harvest or sell products through an alternative supply chain route is something that lacked in some of the GLB’s responses.

4.9 Case Study 8 (Shipping Line 1 – SL1)

4.9.1 Case Introduction

SL1 is the second largest global shipping line based on container vessel capacity and the largest privately owned. The business began its operations in 1970 based out of Italy and is now operating with its headquarters in Geneva, Switzerland. SL1 currently operates over 470 container vessels with over 28,000 employees worldwide. The business shipped over 33,000 TEU of refrigerated and frozen goods including meat, seafood, fruit and vegetable products in 2019. The business discretely competes with freight forwarders by doing value added services such as ‘to door’ services, but purposefully do not compete with freight forwarders as they do not have the available infrastructure.

Table 14- SL1 respondent information

Respondent Role Experience with SL1 Responsibilities

Respondent A National Reefer 14 years Forecasting and matching and Intermodal demands, managing transport Manager between the consignee and shipper

4.9.2 Case Results

4.9.2.1 Pre-event

The respondent stated that the business was well prepared for COVID-19. Due to them being a privately owned independent shipper, they are not required to share slots on vessels with other shipping lines. This has been a key advantage because it means they can make decisions that work for them, without having to be concerned about the impacts on other shippers. For example, if they decided to omit a certain port, they can do so without it affecting other shipping lines and their cargo. As well as this, the business made plans after the Christchurch earthquakes in 2010 and 2011 that involved having generators on hand and methods of communication in order to facilitate operations during a disruption. Furthermore, SL1’s headquarters in Geneva commonly direct the operations and provide guidance during disruptions to the supply chain. In this case, it involved relocating team members to different branches during the earthquakes or having the infrastructure in place for employees to work

96 externally, or from home. In terms of the types of disruptions the business was preparing for, natural disasters locally such as the recent Christchurch earthquakes, but nothing like a global pandemic, again supporting literature findings (Ying et al., 2007).

The business model is based around a priority for team members. This relates to making sure they have a safe working environment and the necessary infrastructure in place for them to be able to work externally or from home. The business’s IT team were able to set up servers so that those who were working externally had access and were able to operate efficiently in a safe working environment. When accessing the involvement of supply chain specialists such as logistics or operations, the respondent mentioned that “they have little to no involvement in the preparation or emergency response planning”. In terms of the Government’s involvement in this, they were responsible for deeming certain businesses as essential services during the lockdown. SL1 was deemed essential, so operations could continue throughout the lockdowns, if hygiene and social distancing guidelines were followed. This backs up the prior literature (Ivanov & Wendler, 2020).

4.9.2.2 Event

SL1 experienced several impacts as a result of COVID-19. Firstly, there was a significant decrease in the volume of non-essential commodities such as timber and paper items. Respondent A stated that perishable goods were therefore core to the business, especially during the lockdown. The respondent added that some perishable commodities had an early, but short drop-off during the outbreak in New Zealand due to the production inefficiencies of some growers or producers as they adapted to the new social distancing and hygiene protocols. For example, meat processing workers were required to socially distance meaning production output decreased significantly. Another impact that SL1 faced was although most ports continued to operate throughout the disruption, similarly to the production output, the productivity at ports also decreased significantly. This was caused due to the introduced health and safety guidelines for COVID-19. Equipment at the ports including straddles and cranes had to be sanitised after operators interchanged, according to the respondent. There was also congestion at ports due to slower devanning and intermodal transport. Furthermore, SL1 would normally have a port agent on the ground at the each port who is responsible for organising, overseeing and coordinating all aspects of the port call and vessel husbandry. They also administer the manifests for each vessel and collaborate with the captain to assure

97 everything is running smoothly. Because of COVID-19, this agent was restricted from working at the port and going on board any vessels, therefore they are limited to working online and managing all these aspects externally. This has caused some issues, but ultimately, SL1 overcame these.

The business has experienced supply chain disruptions in the past including the Christchurch earthquakes, however, the impact of these were on a local scale, while COVID-19 has been impacting exporters and markets globally. Respondent A believes that the global financial crisis impacted businesses on a global scale, however, this was only for a short period of time. Furthermore, SL1 has found that even slight changes in China’s demand can correlate to the business’s peaks and troughs. For example, Chinese New Year or Golden Week have both had an impact on the volume of cargo that SL1 exports to Chinese markets. This has been the case for COVID-19 too. The respondent stated that “China’s drop in consumption during the pandemic has significantly impacted the volumes of cargo travelling to that market”. This point backs prior literature (Ivanov, 2020).

The plans that SL1 had in place worked well, with remote access for team members available and resulting successfully. The business also reduced their vessel sizes and fleet during the initial outbreak. The larger vessels were docked as volumes dropped off. Eventually these vessels were brought back to operate as the Chinese volumes recovered.

When asked how their supply chain responded as a whole, the respondent stated that it held up well overall. They commented that “obviously there was the initial drop in productivity, so some business was lost, however, communication was strong and the supply chain adjusted where necessary”. The biggest hurdle in terms of their container supply chain was the pickups and deliveries. Due to the congestion at certain ports, there were several issues and associated costs as a result. According to the respondent, COVID-19 did not have much of an impact on their supply chain relationships. There was always leniency associated to relationships during the pandemic as the industry understood the difficulty of operating during the disruption. For the likes of the ports, SL1 had mutual agreements regarding extended berthing windows for cargo coming in and out of the port. Most of their relationships had a degree of flexibility associated to them. SL1 found that berthing windows tended to disappear, meaning that the ports were then operating on a first in, first served basis. This tended to work for most of those

98 involved as everything was behind schedule. The respondent discussed how customers with perishable products tend to get the priority over dry cargo and this is mostly caused due to it being the highest paid cargo. Occasionally some dry goods will get the priority if they are on a special contract, or urgently need shipping, such as medical or emergency supplies. There are however only a limited number of power plugs for reefers on vessels, so in that case it is then determined by several factors including price, volumes and the relationship with each customer. If a long-term customer needs their cargo moved, this is more than likely going to move over a new customer than has not cemented themselves with the business yet.

4.9.2.3 Post-event

The respondent of SL1 discussed how their volumes of freight are returning to where they were prior to the outbreak. Towards the end of April or early May 2020, containers began to build up in Asia, Europe and North America. This means that SL1 is now seeing a shortage of containers in New Zealand and Australia. Respondent A believes that this could potentially have impacts in the coming months for New Zealand exporters who are trying to get their products to international markets.

When asked if the business had to be flexible in relationship and customer building, the respondent admitted that the business did not go looking for new customers and alternatively, shifted their focus to moving any of their existing customer’s products if they were still operating. This partly came down to an inability for SL1’s sales team to actively go and find new business with COVID-19 restrictions in place, but also, they had many non-essential customers who they knew would return to business at some point. For this reason, they felt a certain obligation to remain with them during this time.

The one area that SL1 would look at differently when responding to the next supply chain disruption would be attempting to work more efficiently when changing manifests, bookings or other paperwork. This relates to when vessels are delayed, or omit a port and therefore, all the paperwork including manifests and bookings need to be re-done. This proved to be a highly time-consuming exercise for the business.

4.10 Case Study 9 (Shipping Line 2 – SL2)

4.10.1 Case Introduction

SL2 was founded in 2017 as a joint venture, headquartered in Tokyo, Japan. It has inherited the container shipping operations of its parent companies prior to them merging. During the founding of SL2 in 2017, the fleet accounted for 240 container vessels, attributing to being the sixth largest container shipping company globally at the time.

The business exports over 20,000 TEU annually and these products include: Meat, dairy, squash, apples, onions, kiwifruit, avocado, seafood, tomatoes, persimmons and bulbs.

Table 15- SL2 respondent information

Respondent Role Experience with SL2 Responsibilities

Respondent A National Sales 4 years Setting plans and pricing to ensure the Manager business fill the budget for NZ north 30 years in the bound trades in volume and revenue industry

4.10.2 Case Results

4.10.2.1 Pre-event

The respondent believes that the experiences of the global financial crisis prepared shipping lines such as SL2 for the events experienced from COVID-19. The major lesson for the business was that they needed to “respond faster to the changing environment and reduce exposure to costs”. In order to do this successfully, the respondent discussed how reducing capacity to match demand was crucial, ultimately reducing the cost of operations as a result. Off hiring of vessels and containers or layup of surplus capacity was important during this time. SL2 were planning mostly for localised incidents rather than disruptions such as global pandemics as they were out of sight. Localised incidents included a reduction in shipping volumes, as well as port or office closures.

The respondent stated that the business has various BCPs depending on the office or operation. SL2’s branch in Auckland had plans prior to the pandemic for staff to WFH and these were refined during the Sky City fire in Auckland the previous year. Furthermore, all team members have laptops with the systems being cloud based for a seamless transition to

100 a WFH scenario. The business also has a formal protocol and a business continuity planning (BCP) team of senior managers monitoring the situation and making any necessary changes and adjustments. According to the respondent, the plans entail maximising the return of equipment from areas where they are surplus to shortage areas, but also a core focus on profitability. SL2’s BCPs require the support and assistance of all divisions within the business. Additionally, they need support from suppliers of equipment, storage space, feeder services and the likes. On a local level the Managing Director holds the primary responsibility for emergency planning and response in conjunction with the BCP members. Respondent A also discussed that the Governments involvement in plans is limited, however, SL2 have a responsibility to provide a safe working environment for all staff.

4.10.2.2 Event

When discussing the impact that COVID-19 has had on perishable exporting supply chains, Respondent A stated that, whilst it impacted SL2’s customers, the impact on their own operations was not significant. The respondent noticed that volumes remained high as New Zealand was in the peak export season for several crops, while meat works and fisheries were able to continue working. In terms of port congestion globally, this was not impacting the business initially, however, as the markets are reopening, heavy demand has caused port congestion and equipment shortages. The respondent has seen ports close for some reefer products in China causing major congestion issues for the business. According to the respondent, “this continues at various locations globally as the volume of shipments is drowning existing infrastructure”. In terms of New Zealand’s port infrastructure, initially there was no impact but latterly the volume of cargo and the lack of resources at the Port of Auckland has caused significant delays. Respondent A believes that this has then impacted subsequent ports, with berthing windows being suspended, putting vessels weeks off schedule.

Respondent A mentioned that their biggest surprises during the disruption were firstly, how resilient the business can be when faced with these circumstances, and secondly, the price paid for freight when customers are desperate. Some shipping rates are now approximately 400% higher than prior to COVID-19. SL2 have never experienced a disruption to this scale in New Zealand before, however, the business’s plans were successful, and they received frequent praise in regards to how seamless the WFH situation was implemented and

101 conducted. The only adaptation made in the response was that they had to set up printing ability off site for team members.

The supply chain of SL2 performed well during the disruption, in part because being in an essential industry meant that they were largely unaffected. The respondent discussed how a small quantity of dry cargo was deemed non-essential and this business was lost until the lockdown restrictions eased, however, perishable goods held up well. Supply chain relationships were not impacted as a result. The business had flexibility upon free time for import units as they had no access or labour under the Level 4 lockdown restrictions to receive and unpack units. Again, this was addressed as the levels were relaxed. No direct advice or guidance was provided by the Government to SL2, but the business did receive information through the Ministry of Transport website.

4.10.2.3 Post-event

The demand for imports to New Zealand and other global markets has grown higher than previous volumes prior to COVID-19, according to the respondent. There is also a shortage of vessels, space, equipment and increasing costs as vessels become increasingly delayed and cargo is locked up at certain destinations. Respondent A has also noticed that freight rates have increased in line with the supply and demand scenario. Due to reduced services, large quantities of equipment have been marooned at destinations and not returned to export countries. Large stocks of equipment are in the USA, India and Europe; however, they are needed in China due to the increased demand for exports from China, but also from Vietnam and Indonesia. The available stocks have been exhausted and the leasing and new build units cannot cover demand. The respondent is aware that sweeper vessels are being sent to retrieve empty units and return them back to China. Another change that the respondent believes is needed is “vessels are required to be returned to service, while more containers should be leased and built to cater to the insatiable demand at present”. All of these variations in demand correlate to prior literature (Ivanov, 2020).

SL2 are always flexible with their customers and that has meant that they are able to build on relationships with new customers. Respondent A believes that the business’s preparations were well considered, and they would not change their response to the pandemic.

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Furthermore, they have every confidence that SL2 is well accustomed to the new operations, with a half and half split of WFM and working from the office per week.

4.11 Case Study 10 (Airline 1 – AIR1)

4.11.1 Case Introduction

AIR1 employs two operational team members as their cargo team, while also being contracted to another firm that employee a dozen team members who own the operational facility, manage the store goods and loading of freight on to the aircraft. This airlines Christchurch operations export approximately 150-160 tonnes per week, or up to 21-22 tonnes a day in the peak season, generally running from October through until March. During the off-peak season they export around 125 tonnes a week, or 14-16 tonnes per day on average.

Table 16- AIR1 respondent information

Respondent Role Experience with AIR1 Responsibilities

Respondent A Cargo 15 years Facilitating freight forwarders, manager overlooking the handling agents

responsible for packing and loading products on the aircraft

4.11.2 Case Results

4.11.2.1 Pre-event

Prior to the pandemic outbreak, the respondent stated that the business was not prepared for a disruption of this scale. Due to it being a rare type of disruption, there was no planning for something this long term. The business had plans in place for earthquakes, for example if AIR1 was to stop operating for a week, however, they lacked planning to the length that this pandemic has lasted, backed by prior literature (Ivanov, 2020). When New Zealand first went into lockdown in March 2020, the business was planning for a restart in June 2020, however, the lockdowns lasted for over two months. For earthquakes, the respondent stated that the business is prepared for delays and how they will manage them, but that would be if an airline was not operating for a week rather than the usual daily operations. Respondent A believes that the perk with air freight is its short-term nature, meaning they do not need to plan as far out as sea freight are required to do. AIR1’s focus is monthly, so if they can plan for each month they tend to manage well. If any disruptions occur in Christchurch, they have the option 103 of moving products to their Auckland branch if required and can implement charter flights too. The problem is that their short-term plans were not applicable to a disruption of this length and magnitude.

The business has plans in place for diversions and how to deal with these by informing and notifying their customers. These are however standard operating procedures but do also involve discussing the plans going forward. These plans only involve AIR1 and their direct customers, according to the respondent. It may also involve their Auckland branch in some cases when cargo needs to be relocated there, or their branches in Melbourne and Sydney to a lesser extent, with most of their flights transitioning through these ports. If the business did experience disruptions or they did have cargo offloaded at these ports, the respondent stated that they would need to discuss that with the downline stations in order to see what assistance can be provided. AIR1 experienced this with several inbound shipments during COVID-19 where they had services from Dubai to Sydney, but none operating through to New Zealand. This meant they had to move products from Dubai to Sydney and then transfer the product on to another airline’s freighter in order to get the product into New Zealand. This was also only possible because of the relationship they have with other airlines. The business’s plans are driven from a head office level; however, the implementation and planning are both undertaken by the local cargo manager (in this case Respondent A) and that will be in agreeance with the head office in Dubai. The respondent sits in two specific positions within the organisation, the commercial business side and the operations side. From the commercial side, some of the factors required cannot be done from an operational point of view. Disruptions and emergencies come under the operational side of the business. Respondent A has a strong relationship with the Operations Regional Manager who is based in Hong Kong and drives a large portion of the response to certain disruptions including COVID-19. This manager is the main point of contact for any disruption. The business is always looking for feedback from the ground operations team, however, in the case of a pandemic, because there were too many unknowns and the disruption was so severe, the business had to follow the guidance of their head office, working on a month-to-month basis, where previously, they had been working on a 12 to 18-month plan.

When asked whether the Government had any voluntary or mandatory plans that AIR1 had to follow, the respondent stated that every flight they operate into the country needs

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Government approval. They are required to contact the Ministry of Transport and request approval to operate a service. Currently AIR1 has been fortunate that they have accepted all requests and have been more than willing to assist. This agrees with prior literature (Ivanov & Wendler, 2020).

4.11.2.2 Event

The impact of COVID-19 on AIR1’s exporting operations was severe, with operations going to nothing within two days. The airline had bookings in place for their Easter 2020 shipments, however this went from 35 tonnes of freight per flight to nothing due to all flights ceasing, in line with the literature of Luke & Rodriguez (2008). According to the respondent, they had 48 hours’ notice from when the first COVID-19 case was detected in Australia, with New Zealand entering lockdown shortly after. The reason for the service ending in New Zealand was because as soon as Australia had closed their borders; due to AIR1 being a fifth freedom service with long-haul passengers transitioning through Sydney, the business could not operate under Governmental regulations. Australia was not accepting those passengers. Respondent A made it clear that airlines would have continued to operate if it was not for the Government agencies closing the borders. With rulings such as these in place, the business could not operate. Their office was closed until May 2020, with team members on leave until further notice.

The business has agents now that want to book cargo and although these will go into the system, aircraft numbers and flights are fluid, so nothing can be confirmed until these are all in place. In some cases, the business would prefer to have plans laid out, but there are many cases where it is more efficient not to. Being reactive has been a key lesson for AIR1. The respondent stated that “we have managed to bounce back well from the initial disruption and provided customers with creative alternatives in the way we move their products to market”.

Although AIR1 did not experience a loss of products during this disruption, they did have to redirect some of their product from Zurich due to the borders being closed to international flights before the product could arrive. They were able to find a trucking service that could deliver the product to market from Frankfurt on time. The respondent was surprised at how the business managed to maintain their team members during the disruption, but also the team’s willingness to return after the disruption, being prepared to bounce back when

105 needed. There was a significant amount of training that was required for team members and the business was capable of running training sessions and other administration tasks that they normally would not have the time to do during day-to-day operations. When comparing the pandemic to other prior disruptions, Respondent A stated that “nothing has compared to the COVID-19 disruption”. The airline has never stopped flying for this long in its history and this has had a significant impact on the business, especially when missing out on operating its daily services.

According to the respondent, their plans were successful from a relaunch perspective, however, in terms of the initial impact, no plans would have resolved their flights being grounded. AIR1 began to implement how they were going to fill their flights approximately three weeks prior to the relaunch date. From an air freight point of view, that is a long planning time. The first relaunch flight that departed was full of freight and from the respondent’s perspective it showed that their plan had succeeded. They had discussed their plans with several of their agents and the approvals arrived a week prior to the business’s first relaunch flight. The business had a large quantity of meat in cold stores that had been on hold since before the pandemic, so this was a priority, but they also had to bring on additional services in order to get other products out to market too. When asked if the business made any adaptations to their plans during COVID-19, the respondent made it clear that their priority was having plans in place that coincided with any COVID-19 protocols that were issued by the Government, so it was about adapting to what the Government deemed necessary. Team members who were in the office made sure that they were socially distanced and operating split shifts where necessary.

In terms of the supply chain response for AIR1, Respondent A said that the business was fortunate for their strong network with customers and handling agents. Their supply chain responded well, with most destinations operating as AIR1 returned to flying again. There were no major issues with their supply chain overall. As well as this, there were no major impacts on supply chain relationships, with most becoming stronger as a result of the disruption’s impacts. This was not considered to be because of the contracts in place, but more so due to the flexibility and strength of the relationships that AIR1 hold. When discussing resource allocation for customers, the business supported their existing customers throughout the pandemic. When flights returned, these were the first customers that the business

106 approached and offered business to. Maintaining existing supplier relationships during a disruption is crucial according to prior literature (Atan & Rousseau, 2015). AIR1 made sure to communicate their plans clearly to these customers and worked with them to understand their needs and provide the resources they required, also backed by literature (BCI, 2020).

4.11.2.3 Post-event

The business is now operating two flights a week, averaging 85 tonnes of exports over both flights each week. The business is heavily reliant on inbound passengers in order to operate, so the airline has had to keep that in mind. Because the airline is also not strong in stone fruit exports and inbound passenger volumes are generally low from late December to mid- January, operations will cease over this period. The month-to-month planning is still occurring over this period. The majority of AIR1’s A380 fleet are now operating globally which is a positive sign for the business. The respondent believes that half of the world’s airlines are not going to survive this disruption. Furthermore, if this continues for another year, there will be major consequences for all businesses. One positive outcome resulting from the pandemic is that cargo is now being regarded as an important part of an airlines business. According to the respondent, prior to the pandemic, it was commonly treated as a by-product, whereas in some cases, over half of the revenue for an airline has been generated from cargo during the pandemic. There is also more awareness that if an aircraft is filled full of passengers, there is still two thirds of the belly-hold that still needs to be filled with revenue cargo. From the respondent’s perspective, “the cargo that has been moved over the pandemic has effectively kept us alive”. It is not about profits they are making, but more about generating enough revenue in order to survive the disruption.

AIR1 were not flexible in relationship building with new customers because they relied heavily on the existing customer base that they operated prior to COVID-19. The one issue before the pandemic was capacity, so it was difficult for the business to grow networks when they did not have any available space. Their focus has been maintaining the existing customer base and providing them with a quality service. Respondent A does not currently have areas to improve on for their response to the disruption but understands that the business will have a formal review once the disruption comes to an end. The respondent stated that there will be learnings going forward, as supported by literature (Hecht et al., 2019).

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The next chapter will provide a cross-case analysis of the data and also present a modified Haddon Matrix as a decision framework.

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5 Cross Case Analysis and Discussion

5.1 Impact of COVID-19 on Perishable Export Supply Chains in New Zealand

When assessing each response surrounding the impact of COVID-19 on perishable export supply chains, there are several distinct trends that emerge. These impacts have been categorised by sea and air freight, as well as other significant impacts that have resulted from the pandemic. Each of these impacts vary in severity and length, with a cross case analysis of each theme presented below.

5.1.1 Sea Freight

The sea freight industry experienced minor disruptions during the initial outbreak of COVID- 19 in China. A small number of ports were closed or congested, meaning there were limited reefer plugs available for use. GLB5 experienced this and were required to locate and utilise vessels at certain ports to store their reefer containers due to most importers closing. Business continued as normal for most GLBs and shipping lines, with vessels operating as per normal on the common trade lanes. However, as the pandemic continued to spread globally, congestion then became increasingly prevalent at some ports. Non-essential businesses ceased operations and devanning of containers slowed. Cargo then began to accumulate at certain ports around the world. This has since resulted in several delayed impacts that are causing the industry significant issues, and these are depicted in Table 17 below and discussed in detail in the subsequent sections:

Table 17- Impacts of COVID-19 on sea freight operations Impact Experienced during COVID-19

Blank sailings and port congestion GLB1, GLB2, GLB3, GLB4, GLB5, GLB7, SL1, SL2

Equipment shortages (containers) GLB1, GLB2, GLB3, GLB4, GLB5, GLB6, GLB7, SL1, SL2

Customers changing from air to sea GLB1, GLB2, GLB3, GLB6

Re-routing products to new GLB1, GLB5, GLB6 markets/Market collapses

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5.1.1.1 Blank Sailings

Blank sailings or vessels omitting/skipping ports were both common occurrences globally during COVID-19. Nearly all of the GLBs interviewed experienced blank sailings at some point during the pandemic. Respondent B from GLB2 commented that “…shipping lines tend to omit ports in cases like this in order to attempt to catch up with their schedule. They will operate reduced exchanges at ports to attempt to get the vessel through faster”. A few GLBs interviewed noticed the number of services decrease dramatically to the more remote ports in New Zealand including Port Chalmers and Port Nelson. Many shipping lines have determined that the time required to travel to these ports is not worthwhile, considering the limited cargo they were loading or unloading. To a lesser extent, Lyttelton has also been omitted by shipping lines, also due to the lack of cargo volume. GLB4 stated that this impact compounds the problem when attempting to get space on the available vessels that are calling these ports. Furthermore, it adds another level of complexity and costs to the supply chain as they are then required to organise the export containers to be repositioned to a different port for pick up. This highlights New Zealand’s total dependence on the decisions of international shipping lines and how these decisions can adversely impact the supply chain flows, structure and service levels for New Zealand exporters. These issues persist normally however, they were exacerbated significantly during the pandemic.

New Zealand’s largest ports of Auckland and Tauranga have had major congestion issues with cargo building up due to labour shortages and increasing consumer spending on imported products resulting in higher-than-normal volumes. Vessels have commonly omitted both ports to reduce delays, meaning that in some cases, exporters are having to relocate their products to the updated port that the vessel will call. In cases like this, GLBs are having to revise all documentation and pre-planning to adjust the port of departure and relocate the cargo for the exporter. GLB3 commented on the lack of infrastructure in New Zealand, stating “…infrastructure investment by New Zealand is desperately needed… the countries major ports have shown that they are not equipped to handle the resurgence in freight volumes”. Internationally, congestion and blank sailings have also become significant issues, also having an impact on some of New Zealand’s export supply chains. Ports in Los Angeles, the UK and other parts of Europe continue to experience major delays (i.e. ships waiting 14 days before unloading) and congestion leading to further blank sailings.

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5.1.1.2 Equipment Shortages

Many respondents noted that equipment shortages could be increasingly problematic and have devastating impacts on New Zealand’s perishable exports. The traditional shipping model has shipping lines that travel to China, South East Asia and the USA, bringing reefer containers back to New Zealand. This normally occurs over the Christmas period, where vessels will have the capacity to relocate these containers, however, this is not currently the case, with many of these containers either congested at certain ports and waiting to be devanned, or alternatively, the vessels travelling back to New Zealand are at maximum capacity with import containers. The problem that results is perishable exporters in New Zealand are now experiencing a lack of reefers that are required to move their sea freighted products to international markets. GLB3 commented that “…40-foot, high cube reefers are not being repositioned into New Zealand…these reefers are essential in order to supply perishable exporters with the equipment they need”. SL1 have also noticed these shortages in New Zealand and Australia, due to containers beginning to build up in Asia, Europe and North America between April to May 2020. The vessels that normally move these empty reefers are around 60% full and the remaining space can be used for empty containers, however, vessels are currently 110% - 120% full, so they are having to offload cargo and move it to the next available vessel. This means that shipping lines are ultimately having to make a conscious decision to offload a paying customer’s cargo and replace it with an empty container in order to bring it back for New Zealand exporters. GLB1 made that point that “shipping lines are having to make revenue decisions based on relocating equipment”.

5.1.1.3 Service Changes by Exporters

Another common trend that has occurred during the pandemic is a change in service used by many exporters in New Zealand. Due to the severe impacts that airlines and the air freight industry have encountered during COVID-19, many exporters have had to alter their supply chain and freight services to transporting via sea. Prior to COVID-19, products such as avocadoes were being air freighted to Asian markets including Taipei, Shanghai and Tokyo, when realistically they could have all been sea freighted. The air freight rates for this service were at $1.5/kg prior to the pandemic and are now closer to $5/kg. A customer overseas may have previously demanded avocadoes fresh from New Zealand, with two days transit time via air freight, but this drastic change in price has resulted in those same customers tolerating the extended wait time while they are transported via sea freight. As well as the increase in rates,

111 the limited air freight services and capacity available to exporters meant that sea freight services were the foremost option for products that were viable. Highly perishable products such as cherries and fresh or live seafood had to remain on the limited air freight services or be sold on the domestic market. GLB6 noted that “…there was a significant shift of customer’s products from air freight to sea freight and this was a necessary method in order to get their products out to market.” Due to the large influx of demand for sea freight, it has now resulted in congestion issues and a lack of capacity on vessels. Another problem that concerns GLBs is the profitability of the freight that has shifted from air to sea freight. Air freighted products tend to generate more profit for GLBs as the margins are significantly higher than that of sea freight. Several respondents are concerned that this change in channels to market and service could be permanent if the customers adapt and adjust to their new supply chains. This could ultimately impact their bottom line and future business operations.

5.1.1.4 Market Collapses and Re-routing of Products

Throughout the pandemic, exporters have experienced major decreases in consumer consumption, with the most common being China. The USA and UK have also demonstrated they are highly volatile markets, with lockdowns being the primary cause of this. As exporters noticed these market collapses, the objective was to locate and target a new market, before re-routing the products. GLB5 stated that “…significant quantities of product meant for Chinese markets ended up being sold in Europe, meaning that there was then a backlog of cargo from exporters making this change to attempt to re-route products.” Similarly, GLB1 found themselves re-routing products from China to alternative markets in the USA, Europe and Australia and noticed a shortage in vessel capacity. Ivanov (2020) discussed how epidemic disruptions can have major impacts on consumer demands and this has been evident in this research.

5.1.2 Air Freight

The impacts that COVID-19 has had on the air freight industry differed vastly from those impacting sea freight. Because the majority of air freight volume offered for sale resides on commercial passenger service, there is a direct connection between the collapse of passenger volumes and air freight capacity for exporters. Therefore, the initial disruption was far more severe for air freight, with passenger volumes being core to the aircraft operating. The air freight subsides that were introduced by the New Zealand Government through the Ministry of Transport were highly successful in helping to keep some aircraft operating during the 112 disruption. However, the likelihood is that the air freight industry will experience long term impacts as a result of the pandemic. The volumes of freight will ultimately not return to pre- pandemic levels until flight numbers also increase, and this is very much dependent on international passenger volumes. Although passenger numbers may slowly rise with vaccinations taking place, the passenger numbers will still remain below the required volumes for airlines. With strict travel restrictions still in place for many countries, airlines will not return back to operating the same number of Carriers as prior to COVID-19 for an extended period. Ultimately, this means that air freight rates will remain inflated and capacity will be limited for some time to come. The key impacts of the pandemic on air freight are listed below in:

Table 18- Impacts of COVID-19 on air freight operations

Impact Experienced during COVID-19

Rapid halt in aircraft operating GLB1, GLB2, GLB3, GLB4, GLB5, GLB7, SL1, AIR1

Support via Government subsidies a mitigating factor GLB1, GLB2, GLB3, GLB4, GLB5, GLB6, GLB7, SL1, AIR1

Change in product flows – especially concern for long- GLB1, GLB2, GLB3, GLB6 term loss of customers to sea freight

5.1.2.1 Rapid Halt to Aircraft Operations

The most substantial disruption caused by the pandemic according to the respondents was the rapid halt to aircraft operating in and out of New Zealand. AIR1 stated that their operations “…went to nothing within two days”, having severe impacts on their exporting operations. The business had 48 hours’ notice from when the first COVID-19 case was detected in Australia, with New Zealand entering lockdown shortly after. Each airline experienced differing timelines of events, with some Chinese airlines such as China Air and Cathay Pacific ceasing operations earlier due to the outbreak occurring in China, while Air New Zealand continued to operate to certain destinations for a longer period. As New Zealand declared its lockdown and global travel restrictions tightened, airports began to close, with little to no aircraft operating. For airlines to make a profit, they were needing both passengers and freight travelling on the

113 aircraft. Ultimately, this meant that there was a lack of air freight capacity for New Zealand’s perishable exporters. GLB1 mentioned that prior to the COVID-19 outbreak, they were utilising 22 different flights on average per week, while in mid-September 2020, that number halved to 11. This meant that the flight options were slim as competition for space amongst exporters was high and rates also rose dramatically. Therefore, getting the freight to international markets, with little or no flights going to certain destinations was difficult. The theory from Luke & Rodriguez (2008) discussed how food supply chains have a significant degree of dependency on transportation methods and thus, they are vulnerable to disruptions impacting this. During the COVID-19 pandemic, the dependency for air freight was apparent amongst GLBs. Those utilising air freight struggled to transport their products initially, with little aircraft operating globally.

AIR1 mentioned that their airline “…has never stopped flying for this long in its history, having a significant impact on the business”. Both GLB5 and AIR1 were in midst of major air freight programmes during the initial disruption. GLB5 was unable to export 400 tonnes of product due to the drastic decrease in the number of aircraft operating during COVID-19. The price to move the specific product to overseas markets became prohibitive. GLB4 also mentioned that they have allocations with airlines on the existing services out of Christchurch, but the problem is that they have more freight than they have allocations for, resulting in them chasing capacity that has already been assigned. This will likely then lead to a backlog of perishable freight, that could have detrimental impacts on those products.

Another problem that challenged the GLBs was Christchurch International Airport changing their hours of operations during the pandemic. With the help of Air New Zealand, Christchurch Airport manages the Qantas freighter that departs at 6am. The freight for these flights is therefore required to be at the aircraft by 2am. Due to the shortage of team members operating at Christchurch Airport, they were closing at 10pm the night prior. This meant that in some cases, products including live seafood were being delivered to the airline before 10pm the night prior and not being held in a cold store until being loaded into the aircraft for the flight at 6am, thus precipitating issues around product quality and cool storage parameters.

During the nationwide lockdown there was also only a small number of domestic flights, with GLB5 stating they “…went from having 12 or 13 daily flights from Christchurch to Auckland a day, to some days only having one available flight”. Because many GLBs transit their products

114 through Auckland before going to international markets, this caused significant issues for them and their exporters. Certain airlines were having to operate additional flights for GLBs to transport products to Auckland for export. According to GLB5, in some cases, freight space on domestic flights from Christchurch to Auckland was costing more than it would to export the same product to Shanghai.

5.1.2.2 Support via Government Subsidies a Mitigating Factor

The Ministry of Transport and Ministry of Foreign Affairs and Trade have acted swiftly to ease the impacts on the air freight industry, introducing subsidies with help from the IAFC. They have also worked closely with Air New Zealand to operate charter flights when necessary. By continuing to operate a small number of passenger aircraft, regardless of the limited passenger volumes during the lockdowns, it has relieved some of the stress on exporters. GLB3 said that “…airlines have been subsidised by the New Zealand Government to ensure that there is adequate aircraft to export products from New Zealand to various markets around the world”. Most of the pricing and rates, without the subsidises, would have been prohibitive for exporters if they had stopped. Furthermore, there was an increase in freighter aircraft for exporters due to the subsidies, assisting exporters significantly. The respondent from GLB6 believes that the subsidies were used correctly and under the appropriate protocols, with each business that utilised the subsidies benefitting from them as a result. The Ministry of Transport has announced a summer air freight programme that will also be highly beneficial to New Zealand exporters, covering the Christmas meat and cherry programmes, as well as the stone fruit and seafood products heading into markets for Chinese New Year.

A major concern for the industry is that once these subsidies end, airlines are going to have to support themselves in order to continue to operate. GLB5 discussed how the Government cannot afford to continually support flights with the rates they are charging, while exporters cannot afford the prices that they need to charge in order to continue flying. The only factor that has held this together until now is the subsidies. Many of these have however already had their funding cut by the Government and according to GLB4, “…this is impacting exporters at a time where they are demanding more capacity”.

5.1.3 Other Impacts

GLBs have experienced several other impacts during the pandemic that have affected their entire supply chain, for both air and sea freight operations. Some of these impacts have had

115 an impact on the earlier stages of perishable supply chains including packhouses and other primary producing facilities such as meat works and fisheries.

5.1.3.1 Global-scale Disruption

One significant difference between COVID-19 and any prior disruptions that GLBs had experienced, such as earthquakes, the Christchurch mosque terrorist attacks, floods and power outages, was that the pandemic was on a global scale. GLB6 agreed by saying that “…other ports were also impacted and there were limited options for moving cargo. Financially it is the biggest challenge that the business has faced to date with trades and volumes being lost on a much greater scale than any other disruption…the damage caused by earthquakes tend to be repairable in a short period at a local level, while the pandemic is global and has caused significant financial damage compared to infrastructural damage”. Even when comparing the disruption to the global financial crisis, several GLBs stated that it was only a global issue for a short period compared to the pandemic. SL1 agreed that although the global financial crisis did affect economies globally, this impact was not as severe or as long. Ivanov (2020) discussed the associated risks of epidemic disruptions to supply chains, highlighting the long-term nature and unpredictability as well as the ability for it to spread rapidly. This has been a major factor in response for GLBs and Carriers as they did not anticipate the length of this COVID-19 disruption, but also its ability to spread globally.

5.1.3.2 Food Service/Retail Commodity Impacts

There was a minor shift in the types of commodities being exported during COVID-19. With most food products being deemed essential services in New Zealand, the exporting of perishable products continued, however, the demand for certain products on international markets changed. Nearly all GLBs experienced a decline in food service products, while retail food products including fruit, vegetables, meat and dairy have increased in demand. GLB2 stated that “…restaurants and other food service industries remain closed during lockdowns and this will continue to have an impact on these markets… Alternatively, retail products have remained strong while consumers continue to buy from supermarkets and other essential food retailers”. Similarly, GLB1 experienced a decline in exporting of shellfish and other products typically exported to resort destinations such as Las Palmas in the Canary Islands. Because cruises and international travel to these destinations is not taking place during the pandemic, commodities such as these are not in demand. This has resulted in the supply line being cut off and exporters having to find alternate markets to sell in to. 116

5.1.3.3 Volatility of Product Demands

Initially during the early outset of COVID-19, global product volumes tended to decrease with manufacturing in China declining dramatically. As countries began to enforce lockdowns, further decreases in product volumes took place. SL2 stated that there was a significant reduction in the “…volume of non-essential commodities such as timber and paper items. This meant that perishable goods became core to the business, especially during the lockdowns”. As time went on, PPE and other essential, non-perishable products began to increase in volume, meaning that GLBs encountered capacity issues for their perishable products. GLB4 faced issues with air freight capacity for one of their customers who was exporting frozen animal serum. This was to be used in the development of potential vaccines for the pandemic. They stated that “…a large proportion of this space on the aircraft was instead used to transport large shipments of PPE”. With many countries now out of lockdown, both essential and non-essential products have started to move again, resulting in further port congestion and capacity issues.

5.1.3.4 Impact of Social Distancing and Hygiene Protocols

With the introduction of social distancing and hygiene protocols in New Zealand, led by the Governments COVID-19 response, several necessary changes were made along perishable export supply chains. GLB2 and SL1 agreed that packhouses and other primary producing facilities were impacted due to social distancing protocols. GLB2 stated that “…workers were required to socially distance meaning that their productivity in some cases decreased due to less workers operating at one time.” Alternatively, SL1 mentioned that some perishable commodities had an early, but short drop-off during the outbreak in New Zealand because the production efficiency of some growers or producers reduced as they adapted to the new social distancing and hygiene protocols. One example they gave was that “…meat processing workers were required to increase their social distancing leading to production output decreasing significantly”.

Another area of the supply chain that was impacted due to social distancing was some ports including those in New Zealand. GLB6 said that port labour and efficiency was impacted during the New Zealand lockdowns, with operations slowing. This was highlighted during the Level 3 and 4 lockdowns especially. Ports were having to utilise skeleton staff in order to meet the social distancing protocols. SL1 agreed and found that some equipment at the ports including straddles and cranes had to be sanitised after operators changed shifts, causing some delays. 117

Furthermore, some GLBs found that there were restrictions around the container exchange time windows and processes as a result of sanitising and social distancing protocols. In the prior literature, Ying et al., (2007) assessed several impacts on businesses during a pandemic disruption, with social distancing requirements being one of these. Although it was not detrimental to the response of the GLBs and Carriers featured within this study, it did play a part in operational efficiencies and additional costs.

5.1.3.5 Recognised Seasonal Employers and Labour Shortages

One unique impact that the pandemic is causing for GLB3 now is that products including apples and stone fruit cannot be picked from the trees due to a lack of workers. The packhouses have an insufficient number of labourers due to the difficulties in recruiting RSE workers from overseas. RSE workers commonly travel to New Zealand during the peak fruiting season, assisting with the picking and packing of fruit. Due to COVID-19 and the travel restrictions in place, these workers have been unable to travel to New Zealand and carry out this work. There is concern for GLB3, that if packhouses and growers cannot attract the local workforce, it may result in fruit being left on the trees and no product available for GLB3 to export.

5.1.3.6 Supply Chain Relationships

The impact of COVID-19 on supply chain relationships has varied between GLBs. The most common outcome experienced by the respondents was that supply chain relationships tended to grow stronger as a result of the pandemic. GLB5, GLB6 and AIR1 all had mutual experiences where the disruption had more of a positive impact on their supply chain relationships as they became closer with their customers and other stakeholders such as shipping lines and airlines. GLB5 stated that there was additional communication as a result of the disruption and the business’s strong relationships with airlines was a defining factor in their continuation. Prior literature discusses how maintaining supplier relationships in order to mitigate disruption impacts is crucial and this stems from increased collaboration and communication (Atan & Rousseau, 2015; BCI, 2020). One question asked to respondents was whether contracts defined relationships or increasing flexibility resulted during the disruption. Most GLBs found that flexibility was key to being able to operate successfully during COVID-19. GLB4 commented that “…existing mutual agreements or contracts between certain parties were overwritten because most parties enforced force-majeure”. GLB2 added to the point by stating that there are many moving parts within the sea freight industry, so there tends to be 118 a general understanding among those that are involved. They made mention that in their experience “some contracts have ruined or impacted supply chain relationships, so service changes are commonly built into contracts with shipping lines, allowing for additional flexibility”. SL1 also experienced additional flexibility during the pandemic, saying that “…there was always leniency associated to relationships during the pandemic as the industry understood the difficulty of operating during the disruption”. Both SL1 and GLB6 noticed ports extending berthing windows for cargo arriving and departing the port.

Alternatively, some GLBs found that the disruption tested their relationships and, in some cases, negatively impacted them. GLB3 found that it has affected their relationships with some suppliers as it exacerbated certain existing pressures. They also made mention that contracts with other parties such as suppliers, airlines and shipping lines have all remained in place, however, there has been a much greater emphasis on flexibility throughout the disruption rather than enforcing contract clauses.

5.1.4 Future Outlook

Several respondents shared their opinions on the future impacts or outcomes of COVID-19 on perishable export supply chains. GLB7 believes that heading into the peak export season for meat, dairy and apples (February to March in New Zealand) there is likely going to be similar or more severe issues as they continue to build up. There is potential for serious harm to the industry if these issues are not resolved before then. The primary concern going forward is that there is a lack of vessels calling New Zealand in comparison to the volumes of exports that require space. It is also difficult for exporters to change their method of transport from sea freight to air freight in the current circumstances and product characteristics. Although air freight services around the world have continued to operate, the freight rates are considerably higher than prior to the pandemic. This means that exporters for certain products will not be able to afford the current rates, but regardless, there is also insufficient air freight capacity to transport the sea freight volumes that need to be exported. GLB1 highlighted that the capacity of a single 40ft container can hold 25 tonnes worth of product, whereas the maximum load for a freighter aircraft is 60 tonnes of cargo. This portrays the comparison of cargo capacity between air and sea freight.

There has been discussion over a multi-modal sea and air freight scenario in the future where products such as avocados or certain meat products that are less perishable are air freighted

119 a partial distance to market and then sea freighted the remaining distance to the final market. This shortens the transit time, but also lowers the price for exporters. Multi-modal transport has become highly beneficial to some exporters during the disruption, but there is further discussion as to whether this can be accomplished on a greater scale.

According to AIR1, they predict that approximately half of the world’s airlines will not endure the pandemic and its impacts. If the disruption continues to impact the industry for an extended period, there will also be major consequences for exporters.

One positive outcome resulting from the pandemic is that air freight cargo is now being regarded as an important part of an airline’s business. Prior to COVID-19, cargo was commonly treated as a by-product, with passenger volumes being the priority, whereas in some cases, over half of the revenue for an airline has been generated from cargo during the pandemic. There is also more awareness that if an aircraft is full of passengers, there is still two thirds of an aircraft’s belly-hold that is still required to be filled with revenue cargo.

5.2 Timeline of COVID-19 Events and Impacts

In order to gain understanding around the timing of certain COVID-19 events including the lockdowns in New Zealand, a timeline is used below (Figure 10). Furthermore, another timeline has been created to illustrate the timing of several impacts that have resulted from the pandemic up until this point (Figure 11).

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Figure 10- A timeline of COVID-19 events in New Zealand

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Figure 11- A timeline of COVID-19 impacts on perishable export supply chains in New Zealand

Together these timelines demonstrate some relationships between the lockdowns in New Zealand and the impacts that were had on perishable supply chains, while alternatively, there are also a number of other events outside of the lockdowns that have had resounding impacts on these supply chains. For example, as the first case of COVID-19 entered New Zealand and the Government introduced new guidelines such as social distancing, increased hygiene practices and deeming essential services, GLBs and Carriers had to adapt to these changes and that did decrease productivity in some circumstances. The first lockdowns initiated by the Government were a learning curve for most GLBs and this is where they were tested on their preparedness. However, once they had experienced Alert Level 3 and 4, the lockdowns that they encountered later on did not prove to be as much of a factor on their operations. Because GLBs and Carriers continued to operate right through these lockdowns, with the exception of some airlines, it was not a case of these certain events having an impact on the supply chain, but more a case of external pressures building up. Although a range of factors did play a part

122 in these pressures, including reduced labour at some ports; port congestion, blank sailings and container shortages all resulted from bottlenecking.

One point to make is that lockdowns in other countries did have an impact on the supply chains of some GLBs. For example, lockdowns in China, USA and the UK did impact consumer spending and the types of commodities demanded. With lockdowns closing restaurants and resort type markets, this altered the products that were being exported, but also created market volatility. With some countries repeatedly entering and exiting lockdowns, it created inefficiencies in operations for some GLBs.

5.3 Resilience Plans and Adaptations Utilised by GLBs During COVID-19 Response

The aim of this section is to identify the specific resilience plans and adaptations that GLBs have implemented during the COVID-19 disruption. This will include a thorough analysis of plans and adaptations during each of the three stages of the disaster cycle including the preparation, response and recovery phases. Following this, the hypothesised Haddon Matrix presented at the beginning will be revised from this analysis (see Table 20), providing a detailed and specific overview of the GLB’s response to the COVID-19 disruption.

5.3.1 Preparation Phase

The preparation phase of this disruption has proven to be influential in the response phase for GLBs and Carriers during COVID-19. Many of the respondents lacked planning, specifically for a pandemic due its uniqueness and rarity. However, in New Zealand, the industry did have a small lead time from the initial outbreak in China to implement any further planning before the pandemic began to impact operations and spread to New Zealand. Below, the pre-event phase has been depicted from the NVivo data analysis:

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Figure 12- Key themes from the pre-event phase of COVID-19

5.3.1.1 Host Factors in Preparation Phase

When categorising the host factors within the preparation phase, the first is the awareness of potential disruptions. Three quarters of the respondents were aware of some potential disruptions and had plans in place for these, with all of them preparing for further earthquakes. GLB7 gave an industry wide perspective by saying that “…most businesses in the current environment are prepared for some disruptions such as earthquakes, especially those in Christchurch that have dealt with them before”. Similarly, GLB6 commented that the business has planned for natural disasters as New Zealand has recently experienced several major earthquakes, but also flooding and road closures. Ying et al., (2007) discussed how businesses tend to have BCPs in place that focus on natural or man-made disasters, however, lack plans to prepare for disruptions such as a pandemic. This proved to be the case for this research with most respondents. The utilisation of first-hand experience was evident among respondents with GLB3 believing that there is “…nothing that can prepare a business for disruptions better than first-hand experience”. SL2 added that for their business, the experiences of the global financial crisis prepared shipping lines for the events occurring due to COVID-19. The major lesson for the business was that they needed to respond faster to the changing environment and reduce exposure to costs. Although utilising first-hand experience was successful in some respects when preparing and responding to COVID-19, other aspects were not viable. This includes the length and global scale of the disruption, as well as several other factors. Two of the GLBs discussed the use of RORPs under MPI, in place for outbreaks 124 such as HFMD. These plans cover the procedures that are in place for notifying stakeholders and shutting down the business. Ultimately, this has provided some awareness for the specific GLBs around potential disruptions and furthermore, GLB1 admitted that they have been applicable in some cases when responding to the COVID-19 pandemic. This has included communicating any changes to the operations with the customers and providing updates when necessary.

In terms of a risk assessment phase, only a small number of respondents stated that they performed this during the preparation stage. According to the respondent from GLB4, within each of their BCPs, there is a risk assessment phase. This covers the minimum standards that are required to keep the business operating and that can be as basic as the number of team members that are needed at the branch, or the equipment that is required to operate. GLB6 also mentioned that ultimately their level of action towards a disruption depends on the degree of risk. Scanning the environment for disruptions was also carried out by some GLBs including GLB3 and GLB6. GLB3 had a brief scan of the disruption environment and assessed how it may impact their operations, while GLB6 mentioned how they have a board of directors who are constantly monitoring any kind of risks such as war, cyberattacks or shipping line changes.

In terms of scenario analysis, only one respondent developed and assessed a ‘what if’ scenario. As GLB3 was the only respondent to do this, it is likely that there were several unknowns surrounding the pandemic, especially considering the rare nature of this type of disruption. Without any prior knowledge, there may have been some difficulty for respondents to predict outcomes or impacts.

Plan development has been prominent among respondents, with a wide range of planning and methods in place. Commonly, respondents discussed broad planning that was in place for general disruptions. GLB7 discussed how most plans made by GLBs are too broad and are not specific enough when considering each type of disruption, but rather a wider response plan for any type of disruption that may occur. They added that it is a matter of adapting and responding to the situation at hand. GLB6 agreed, saying that their response plans are broad for all types of disruptions. According to GLB7, these general plans often cover disruptions such as natural disasters, fires, production delays, a loss of power, or other similar problems. AIR1 discussed how they have plans in place for diversions and how to manage them through

125 informing and notifying their customers. These are however standard operating procedures but do also involve discussing the plans going forward. All but one GLB indicated that they had developed BCPs prior to the pandemic. GLB2 was one of those that did have a BCP in place and said that “…we continue to use BCPs both globally and regionally and ultimately, these are implemented and updated by the business’s Quality, Safety, Health and Environment team in Auckland, as well as the other main hubs situated around the world”. Respondent B from GLB3 described how they utilise formal plans and emergency protocols when preparing for disruptions. Finally, the duration or period of time that these plans cover has been an important talking point for a few respondents. AIR1 discussed how they lacked planning to the length that this pandemic has lasted. When New Zealand first went into lockdown in March 2020, the business was planning for a restart in June 2020, however, the lockdowns lasted for over two months. The plans they had in place were simply not applicable to a disruption of this length and magnitude.

The documentation and practice phases were also not commonly discussed among respondents. GLB4 mentioned implementing a business continuity management system that allowed for them to access other functions of their business network that were not impacted. Alternatively, GLB6 stated that the business has documented handbooks on actions and what is required in the event of a crises, as well as the ‘go to people’. Two respondents utilised internal and external audits as a measure of preparedness prior to the disruption. GLB2 described how external and internal audits have helped them to determine whether the overall business or single business units are prepared for a disruption to the operations. Similarly, GLB4 said that their policies are driven by the regional office in Singapore and they conduct the external reviews on the branch. The key points that they examine are documentation and the facility, as well as their critical vendor list.

The primary responsibility and involvement in planning is different for all of the respondents featured within this study. Most of the GLBs or Carriers place their primary responsibility in the hands of a branch manager or head office level manager, depending on the size of the business. For example, GLB1 and GLB4 stated that the specific branch manager at the site is responsible for implementing the plans, while for GLB1, their National Training Centre Team help to coordinate a national response, providing guidelines and compliances that must be followed. Alternatively, GLB3 stated that they utilise a corporate team comprised of global

126 managers and senior team members to manage the planning phase. GLB7 agreed that commonly the planning within a GLB is discussed between board members, senior team members or managers rather than operations team members. When discussing whether supply chain specialists were involved in the planning phase, this was uncommon among respondents. Although some respondents actively look for feedback or team involvement, this disruption was so severe that they had to follow the guidance of their head offices. GLB5 added that there was insufficient time to be consulting team members about the disruption planning. SL2 conversely discussed how their BCPs require the support and assistance of all divisions within the business. Additionally, they need support from suppliers of equipment, storage space, feeder services and the likes. GLB6 operate a Senior Leadership Team that generally covers each department of the business such as customer service, operations, HR and the commercial side of the business. This team oversees the business’s planning phase. Similarly, SL2 has a formal protocol and a BCP team of senior managers monitoring the situation and making any necessary changes and adjustments. AIR1 discussed how they managed to achieve integrated planning with other branches including in Auckland and their Australian branches in Melbourne and Sydney to a lesser extent, as most of their flights transition through these ports. If the business did experience disruptions or they did have cargo offloaded at these ports, the respondent stated that they would need to discuss that with the downline stations in order to see what assistance can be provided.

5.3.1.2 Agent Factors in Preparation Phase

Table 19- Preparedness of GLBs for the COVID-19 disruption

Impact Self-reported as sufficiently Self-reported as not sufficiently prepared prepared

Preparedness for COVID-19 GLB1, GLB2, GLB3, GLB4, GLB1, GLB5, GLB7, AIR1 GLB6, SL1, SL2

When discussing the preparedness of each GLB or carrier for the COVID-19 pandemic, there was a range of responses, with several believing they were sufficiently prepared, while others were not as prepared. From the interviews, each respondent self-reported whether or not they believed they were prepared for COVID-19 and this has been illustrated above (Table 19). Respondent C from GLB1 believes that their business was prepared for a disruption of this

127 scale and that they were as prepared as any other GLB. Similarly, GLB4 believes that their business was also reasonably well prepared for a disruption to their supply chain, stating that they were far more prepared than others in the industry for the recent pandemic. This was in part because of their business continuity management system that they had in place, allowing them to access other functions of their business network that were not impacted. Pre- bookings also worked in their favour for sea freight as vessels continued to call, while this was not viable for air freight. GLB2 found that they were prepared for the initial impact, however, they were more reactive in preparing for specific disruptions in specific locations, rather than being proactive. They also continually evaluated alternative shipping options and pricing for customers.

Alternatively, several respondents found that they were not sufficiently prepared for the pandemic. Both Respondents A and B from GLB1 agreed that they were underprepared for COVID-19. Although they had business continuity plans in place, they lacked detail on disruptions such as a pandemic. GLB5 was also not prepared for the disruption, however, they relied on the strength of their relationships with airlines and shipping lines, in hopes it would suffice. GLB7 does not believe that any of the GLBs were prepared for a disruption like COVID- 19, but they also they did not consider the length of time the pandemic has disrupted their supply chains.

5.3.1.3 Physical Environment Factors in Preparation Phase

In terms of the physical environment factors, resilient or backup infrastructure was commonly raised by respondents. Over half of the GLBs and Carriers discussed how during the preparation phase they ensured their staff had the ability to WFH and the required infrastructure was in place in the likelihood of a disruption. A number of these respondents discussed how prior disruptions had driven them to develop and prepare infrastructure for future disruptions. For example, GLB3 discussed how they had already set up infrastructure to allow for team members to WFH effectively following the Christchurch earthquakes. Respondent A added that each team member had the ability to process and work out of office and that occurred almost automatically, with the difference being that the team had additional notice of it occurring during the pandemic, unlike the earthquakes. Similarly, SL2 discussed how their branch in Auckland had plans prior to the pandemic for staff to WFH and these were refined during the Sky City fire in Auckland the previous year. Furthermore, all team members have laptops with the systems being cloud based for a seamless transition to 128 a WFH scenario. GLB1 and SL1 also discussed how the accessibility to vital resources was an important step in the preparation phase. This included having power generators as well as forms of communication such as company phones and laptops available to staff. Another important point raised by some respondents in the pre-event phase was preparing IT for an increase in demand during a potential disruption. GLB2 stated that IT support was a factor in their preparation phase and “…preparing them for an increase in demand during external operations was one key to success”. Likewise, GLB1 performed disaster recovery preparation for their main IT servers as a precaution for access issues during a potential disruption, however, they had not prepared for a sudden increase in access to the server from remote IP addresses, rather than access always being from within one warehouse. The business operates a mirror server that stores their required data in an offline server and is backed up every 24 hours. This data stored on their servers was crucial to them being able to function. A few respondents also discussed having alternative branches that were available to assist in the event of a disruption. AIR1 mentioned that if any disruption was to occur in Christchurch, they have the option of moving work to their Auckland branch and can also implement charter flights too. Similarly, GLB3 said that the business has other branches in various locations such as Melbourne that can assist in operations if required. On a different note, GLB1 ensures that when a branch is setup, they have sufficient storage and loading space for containers. They have found that this allows for each branch to be more lenient with their customers and provide additional storage if required during a disruption. They can also setup makeshift or temporary depots in the wake of disruptions and this proved to be a reality during the Kaikoura earthquakes in 2016. They were able to set up a depot to assist with the lack of access to the railway and State Highway 1 and this was highly successful.

Two respondents discussed the importance of operating a safe working environment, with a core focus on health and safety when preparing for a disruption. SL1 described how their business model is based around a priority for team members and this relates to ensuring that they have a safe working environment to operate in. Similarly, GLB3’s plans have a core focus on workplace health and safety.

5.3.1.4 Socio-Cultural Environment Factors in Preparation Phase

Collaboration with key stakeholders or supply chain members was frequently discussed by the respondents in this study. Firstly, the involvement of external organisations in planning was undertaken by some respondents, however, some tended to avoid this. GLB7 gave an 129 industry-wide perspective, expressing that firms commonly involve other organisations in their specific plans. When discussing perishable products, they added that GLBs utilise air and sea freight specialists in moving those products, as well as complying with mandatory MPI requirements and documentation for overseas markets. Therefore, they believe that organisations such as these would be involved in the planning phase for most GLBs. GLB2 said that their plans are also communicated with suppliers or customers as they see these interactions as a crucial part of doing business. Being able to keep a constant flow of communication is included within the plans. Alternatively, several respondents stated that they do not involve external organisations in their planning. GLB6 mentioned that their plans do not currently involve any other organisations. Potentially at a global or senior country level there may be engagement either with the New Zealand Government or Government agencies, as well as the ports and their senior management. The respondent believes that there is only ‘communication’ between customers rather than them being fully involved in the plans in order to avoid initiating any authoritarian behaviour on the relationships. On a similar note, GLB5 stated that outside of notifying their customers of any changes in procedures, there was no external involvement.

Complying with mandatory Government requirements was another talking point amongst respondents. GLB1 admitted that although there are several mandatory Government requirements in place, these are not solely for emergency preparedness. Such requirements include authorisation with RACA for aviation security, MPI food safety schemes and abiding by New Zealand Customs. GLB3 added that the Government and any of their mandatory requirements do have impacts on GLB3’s plans, with the major one being health and safety for RSEs. Respondent B from GLB3 stated that aside from the OSH requirements, the Government-initiated requirements were left to individual businesses, apart from actual rulings as experienced with COVID-19. From a carrier perspective, AIR1 discussed that every flight that they operate into New Zealand needs Government approval. They are required to contact the Ministry of Transport and request approval to operate a service and they have been fortunate that all their requests have been accepted, with the Government being more than willing to assist.

GLB5 was adamant that cementing strong relationships with their Carriers prior to the events of COVID-19 was beneficial for their response. Respondent B from GLB5 believes that the

130 business’s strong relationships with airlines was the defining factor in keeping them operating during the pandemic. They added that their senior management has always advocated for these relationships with airlines, especially with Air New Zealand as they want to support the national airline. The respondent noticed that during the pandemic, airlines began to only deal with freight forwarders that they had strong existing relationships with. Some freight forwarders that did not have these relationships, found it difficult to acquire any space as a result. AIR1 also found that they had benefits to having strong relationships with other airlines as they could utilise them for connecting flights to destinations that they couldn’t operate in to. GLB1 and GLB5 both admitted that they both have an informal agreement with another freight forwarder with the intention of sharing facility space in the event of an isolated COVID- 19 outbreak. This initiative began before the pandemic for both respondents but has carried over during the current disruption. Although each business has control over temperature inspections and hygiene measures, if GLB1 or GLB5 had a positive case of COVID-19 within their branch, the facility would be closed and out of action for at least two weeks. With this initiative, it allows both businesses to work externally at each other’s freight forwarder facilities if faced with this outcome. This arrangement also removes any stealing of customers and maintains operations until the specific business is up and running again.

GLB3 touched on their annual allocations with Carriers, employed prior to the disruption. If those allocations were met and the vessels continued to call New Zealand ports, then the disruption was minimal. Although this was not the case with COVID-19, this forecasting was something that the business relied on for other disruptions. Similarly, GLB4 ensured that they had several pre-bookings in place with Carriers prior to the outbreak. However, this only tended to work well for sea freight because the vessels generally continued to call, however, this is not so much the case for air freight, with airlines dramatically reducing the number of aircraft operating to certain destinations.

Both GLB1 and GLB2 associated a lot of their success in their preparation phase to their diverse supplier base and a variety of customer’s products. Firstly, GLB1 discussed how their business is highly dictated by their wide customer base, and they believe that is why they have performed so well in the current situation. When one customer has reduced volumes, another customer’s volumes will increase and vice versa. Similarly, GLB2 stated that having a

131 reasonable cargo mix has also assisted in keeping their business stable during the pandemic. They can lean on other parts of the business if one product or customer is struggling.

5.3.2 Response Phase

The response or event phase of the COVID-19 disruption has lasted much longer than was anticipated by most GLBs or Carriers from the time of the initial outbreak. With the initial outbreak occurring in December 2019, this phase has lasted for over 16 months. Ultimately, this means that the plans and adaptations utilised within this period by GLBs and Carriers have been crucial in determining the success of their response. Below, the event phase has been depicted from the NVivo data analysis:

Figure 13- Key themes from the event phase of COVID-19

5.3.2.1 Host Factors in Response Phase

The execution and success of the initial plans from the preparation phase were crucial in determining how each respondent coped with the disruption. The level of success for each respondent differed significantly, with some plans resulting in little to no success during the pandemic, while others were somewhat more successful. Respondent A from GLB1 admitted that the plans they had in place were worthless when responding to COVID-19. On the other hand, most other respondents described the success of their plans as being ‘as good as they could be’. Respondent B from GLB3 believes that although many factors were outside of the

132 business’s direct control, the plans they did have in place worked. From a carrier’s perspective, AIR1 mentioned that their plans were successful for their flight relaunch after the lockdowns, however, in terms of the initial impact, no plans would have resolved their flights being grounded. Their first relaunch flight that departed was at full freight capacity and so this suggested to the respondent that their plan had succeeded.

The adaptation and flexibility of plans was a common trend among respondents, with all of them stating that they implemented changes to their initial plans or operated with additional flexibility. The most common adaptations made were to comply with the Government’s protocols and rules that were introduced as the pandemic progressed. For example, Respondent A from GLB1 stated that “…the only adaptations made to the initial plans were the requirements to use PPE and increase hygiene practices in compliance with the New Zealand Government”. Respondent C added that “…disaster planning and recovery is useful, but it is important to also understand that each disaster or disruption will have its own unique attributes, impacting the outcome differently”. This suggests that businesses must be adaptable in their approach and not blindly adhere to a pre-set plan too rigidly. GLB5 agreed, saying that they made several adaptions to their response including the safe practices protocols introduced by MPI that involved hygiene and social distancing. From an industry wide perspective, GLB7 noticed “…increasing amounts of flexibility in how operations were carried out by GLBs”. Furthermore, Respondent A believes that most firms have looked at their business and the plans they have in place since the disruption and made improvements as a result, with some still implementing new aspects to their response. GLB6 found that other than the compulsory adaptations made, they had a strict plan and followed it throughout the pandemic. A few respondents utilised a reactive response approach during the disruption. AIR1 noticed that although in some cases the business would have preferred to have plans in place, during COVID-19 there have been times where it was more efficient not to have them. According to the respondent, “…being reactive has been a key lesson for the business”. Alternatively, GLB5 described the need for a more proactive approach after utilising a reactive approach, stating that they could have been more proactive closer to the initial outbreak. Two respondents discussed how having an open-minded approach has been or could be successful for them during the disruption, especially when meeting their customers’ demands. AIR1 has strived to exercise creative and new alternatives when getting their customers products to

133 overseas markets, while GLB1 believes that they could have initiated this further in order to demonstrate to their customers that they were doing everything they could to meet demands.

Leadership and internal communication were important for some GLBs during the response phase of the disruption. For example, GLB1 have a National Training Team Centre that were responsible for advising all the various branches of the business in New Zealand including warehousing, transport and A&O and they found this to be highly successful. Each branch received daily updates after the Government announcements from the training team. They would relay these updates via email to each branch manager and outline any key points that related to the business’s operations. As well as this, global managers from the business were involved in weekly or sometimes daily calls where they shared learnings from the disruption, helping to establish an understanding of the unique response methods being used. GLB1 found these calls to be useful and assisted in the response phase. Similarly, GLB4 utilised video calls in the lockdown for their team members, allowing for daily updates to be communicated as well as any other important information. They also operate an Incident Management Team that is formed by four team members including Respondent A. This team assists in responding and recovering from a disruption.

A spatial dispersion of business units or multinational operations has been deemed a competitive advantage by two of the respondents. Firstly, GLB1 discussed how because their business is based in 24 countries, they believe that they have been protected from the lockdowns as the flows shifted in their global supply chain. When New Zealand entered a nationwide lockdown and GLB1’s domestic transport numbers were struggling with freight volumes and customers, their Australian business units were still functioning with high demands for business. In terms of their global supply chain, when one business unit was struggling, another business unit or region was performing particularly well in terms of profit. Respondent A made mention that “…the business has found a similar trend throughout the last 5 – 10 years, that when one market enters a recession or has a period of uncertainty, another area is thriving”. They believe that their business model has been secure in that case. Similarly, GLB4 stated that competitors have communicated their struggles and outlined that in times like these, working for a multinational company is far more of a safeguard from economic impacts. Respondent B from GLB1 added that it is not only their multinational operations that has assisted in their response, but also their end-to-end supply chain that has

134 been equally advantageous as they are able to lean on other parts of the business where necessary. It is noted that a geo-spatial dispersion of operations over different regions and around the globe allowed for greater flexibility and supply chain resilience.

5.3.2.2 Agent Factors in Response Phase

The urgency of response to the COVID-19 disruption proved to be critical to some GLBs. The respondents from GLB5 both discussed how their business took the outbreak seriously from an early outset and this had positive attributes to their overall response toward the pandemic. Conversely, GLB6 believe that they reacted slowly to the initial outbreak of COVID-19 because they did not know the full extent and severity of it. Although this may not have dramatically impacted their overall response, it created more difficulties and set them on the back foot.

5.3.2.3 Physical Environment Factors in Response Phase

The use and allocation of resources was a popular talking point among respondents, with the majority discussing how crucial it was to allocate resources to customers during the disruption, as well as the approach to how this was accomplished. Some respondents including GLB2, GLB3 and GLB7 mentioned that for the most part, the allocation of resources to customers remained the same as prior to the pandemic, with GLB3 stating that they were fortunate that as the congestion and delay issues occurred, their peak season had mostly passed, so they were able to allocate resources reasonably well their network of customers. GLB7 added that although this allocation may not have been in the same timeframe as prior to COVID-19, freight forwarders have mostly been able to accomplish this. As for other respondents, some of their customers had a priority to receive resources before others. GLB6 said that they have priority customers handling essential products, and so they were the first to be approached. Generally, products that need to move urgently take priority over those that do not, so they are the customers to be allocated resources first. GLB2 added to this by saying that perishable freight tends to take priority over dry goods, however, the allocation of equipment and time continued as they did prior to the disruption. Yet, GLB1 experienced difficulty in allocating resources during the disruption, stating that they “…did not execute this well”. They found that for the most part, this allocation was based on demand. Seasonal peaks of air freight mean that there will always be times when there is limited freight space and greater demand than available space. For GLB1, it was a different process, but the answer was still the same; they had to “…give a small amount of space to some customers and increasing amounts to the other larger customers, while justifying the outcomes and keeping all 135 customers satisfied”. As for the Carriers interviewed, AIR1 found that they supported their existing customers throughout the pandemic and when flights returned, they were the first to be approached and offered business to. Both SL1 and SL2 made the decision to reduce capacity and resources in order to match demand during the disruption. This involved off hiring vessels and containers, resulting in reduced vessel and fleet sizes for an extended period. According to SL2, this helped to reduce the cost of operations, especially with surplus capacity not being used during the initial decrease in freight volumes during the outbreak in China. SL1 stated that these vessels were brought back to operate as the Chinese volumes recovered.

Next, the availability of contracted logistics assets was crucial for GLBs in order to continue exporting products out of New Zealand during the disruption. GLB1 admitted that they were fortunate to have a wide range of airlines that were available, including some who continued to operate freighter aircraft. Freighter services were not as impacted by the pandemic and because GLB1 had utilised them prior to COVID-19, they had a priority for space. Almost all the GLB respondents experienced a shortage of operational aircraft during the initial outbreak of COVID-19 in New Zealand. Due to the sudden decrease in passenger volumes, airlines ceased most of their flights, having more of a dependence on passengers rather than freight volumes. Interestingly, this concept has changed during COVID-19 for some airlines, where they are now recognizing the value of freight volumes to their operations.

The adaptability of labour was another key factor that played a part in the response phase for most of the respondents. All but one respondent discussed the importance of staff willingness and ability to work from home and assume different roles during COVID-19. There was a consensus among the respondents that this transition was seamless, with some minor implications initially for a small number. GLB5 stated that after adapting to the initial change, most team members adjusted well to WFH, while SL1 said that they received frequent praise regarding how smooth the WFH situation was implemented and conducted. GLB6 noticed that their team members followed the discipline well and found it simple to adapt, with many preferring it. Some GLBs implemented rostered shifts during the pandemic in order to adhere to the Government’s social distancing protocols. GLB1, GLB4 and GLB6 all setup rostered shifts to create a safe bubble for team members to work in. Overall, GLBs and Carriers found that their team members adapted well to the change in operations and new processes that were

136 put in place. GLB5 discussed how their team members “…responded and adapted well to the new systems that were introduced, including online documentation, that in turn created a simpler process during COVID-19”. The respondents experienced several differences regarding the relocation of staff during the pandemic. Although three GLBs and one carrier were able to relocate staff at certain times during the response, this was made difficult by the restricted travel during the nationwide lockdowns in New Zealand. GLB1 said that during the Christchurch earthquakes in 2011, the relocation of staff to assist with the clean-up and recovery was possible due to it being a localised disruption, while for COVID-19, it has been a global disruption, so the relocation of staff has been difficult at times. When travel restrictions were eased, the relocation of staff was then made easier for these GLBs and Carriers. The sufficiency of labour was another important factor during the disruption and was a challenge for one respondent in particular. GLB1 discussed their constraints for labour due to a hiring freeze being implemented during the initial outbreak. This was used to reduce overheads but instead resulted in a shortage of labour during an extended peak season. Alternatively, GLB4 stated that it was important to ensure that they had the available team members to meet demands and continue to operate during the disruption. The management of workflow was accomplished by some respondents including GLB4 and GLB5. The respondent from GLB4 stated that there were difficulties around managing workflow while also considering other factors outside of the workplace that each team member was experiencing.

5.3.2.4 Socio-Cultural Environment Factors in Response Phase

The influence of the New Zealand Government’s actions and decisions has had on GLBs and Carriers during the COVID-19 disruption has been profouond. Firstly, the Government introduced several guidelines or protocols that the industry were required to follow if they intended on continuing to operate. For this reason, it has been important for GLBs and Carriers to consider the Government within their plans and adpatations during the response phase. Nearly all of the respondents commented on how these guidelines were followed during their response and this included social distancing and sanitation. AIR1 discussed how their priority was to have plans in place that coincided with any Government COVID-19 protocols that were issued by the Government and adapting to what they deemed necessary. GLB5 discussed how through MPI, the Government also implemented a ‘Safe Practices’ protocol that involved continuous monitoring of freight forwarders and exporters handling perishable products. Compliance of these steps were again compulsory if GLBs were to continue to operate.

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Another Government-initiated scheme was deeming certain businesses as ‘essential services’ during the COVID-19 pandemic. The Government defines these as being “businesses that are essential to the provision of the necessities of life and those businesses that support them”. Almost all the respondents stated they were deemed essential, while several of them also pointed out that their entire supply chain had been deemed essential. GLB2 mentioned that “…our supply chain responded well as a whole, and this was mostly due to the other operators within the supply chain also being deemed essential services”. Both GLB5 and GLB6 discussed that because they are heavily orientated towards perishable exports, they continued to operate under the scheme. Alternatively, SL2 said that there was a significant decrease in the volume of non-essential commodities such as timber and paper items due to their customers within this industry not being deemed essential. This meant they shifted their core focus to perishable products.

The Government’s approach when responding to COVID-19 has a significant impact on the way that GLBs and Carriers also respond. Both GLB6 and GLB3 discussed how ultimately, the response is determined by the leaders of the country to give the appropriate advice and actions, as well as the appropriate measures and then it is a matter of adapting to that outcome. Three quarters of the respondents mentioned that they had received guidance or communicated with the Government during the disruption. This was not necessarily direct communication with the Government, as stated by some respondents. For example, GLB5 found that whilst they were impacted by the Government and what they were doing to assist at that time, it was “…more indirect because it was coming from airlines or customers who were seeking Government subsidies for freight”. Similarly, GLB4 was heavily involved with the Ministry of Transport, particularly around the charter flights that they were operating. GLB4 were receiving enquiries from various customers who were trying to acquire space on these flights, so they had to be engaged with the Government to arrange this. The Government subsidies that came into place during the pandemic were praised by the respondents. GLB7 stated that The Ministry of Transport and The Ministry of Foreign Affairs and Trade acted swiftly to introduce subsidies with help from the IAFC. Almost all the GLBs mentioned that they utilised these subsidised flights and they were highly beneficial to keeping the operations going. GLB5 pointed out that if the Government had not provided the financial support to keep flights operating, most of the pricing would have been prohibitive for exporters. Furthermore, GLB7 believes that the industry is not yet experiencing the full effects of the

138 pandemic because of the subsidies that are still being granted by the Government. The respondent mentioned that flights are not going to be supported long term and the Government has confirmed this. Businesses that are utilising these subsidised flights are going to have to support themselves if they intend on continuing operations in the future.

Another socio-cultural environment factor that was discussed by most respondents was the flexibility of contracts controlling relationships along the GLBs supply chains. There was a mixed review among the respondents on whether there was additional flexibility provided between parties within the supply chain, or whether the relationships abided by contractual obligations. Three of the GLBs found that relationships with airlines continued to follow contracts closely during the pandemic. Respondents A and C from GLB1 found that Air New Zealand were particularly stringent in abiding by their contractual agreements with their customers. One change they made was that if freight forwarders booked cargo on a flight 72 hours in advance and confirmed it, they were opting to pay for the freight regardless of whether the booking was used or not, something that had not been carried out prior to the disruption. GLB4 also agreed that contracts with airlines were monitored closely, however, this was necessary in order to guarantee access to an aircraft and the flight crew per trade lane, as well as a specific payment commitment. On the other hand, each respondent discussed at some point how there was a degree of flexibility attributed to the relationships between supply chain members during COVID-19. For example, Respondent A from GLB3 stated that contracts tended to be put to the side, while there was increasing accommodation between parties and an element of flexibility throughout the disruption. GLB4 also experienced this flexibility, finding that “…mutual agreements or contracts between certain parties tended to disappear or be overwritten, with most organisations enforcing force- majeure”. Carriers such as SL1 noticed that there was always leniency associated to relationships during the pandemic as the industry understood the difficulty of operating at that time. When discussing about the ports, SL1 had mutual agreements regarding extended berthing windows for cargo coming in and out of the port. These berthing windows tended to disappear, meaning that the ports were then operating on a first in, first served basis.

Finally, collaboration with customers was another common theme among respondents during the response stage of the pandemic. Approximately half of the respondents stated that they were actively communicating with their customers during this phase. GLB2 believes that their

139 biggest task during this period was communicating with their existing customers and reporting any delays that may have been caused. GLB4 added that this communication may include “overnight or daily updates from regional teams or customers”. With a general overview of the industry and perishable export supply chains, GLB7 discussed that this phase was where communication and flexibility between exporters, airlines and other stakeholders was key. Furthermore, it is crucial for GLBs to communicate with their customers and understand their desired method of transportation for their products. GLB4 and GLB5 both stated that they had a certain willingness to obtain the desired outcomes for their customers by any means necessary, while GLB2 implemented certain restrictions around their customer’s freight volumes, especially for their air freight business. The prioritisation of freight is another point raised by GLB1 regarding them collaborating with their customers during COVID-19. They found that they were making allocation or priority decisions based on the limited space, but also finding a home for other customers. These allocations or priority decisions are also often dictated by the customers that are prepared to pay a higher price, or alternatively, the customers that accept delays for space at a lower rate. Urgency of delivery is also another factor that needs to be considered. If GLB1 felt that there was a short window for a product such as beer hops being exported to the West Coast of the USA, they would then recognise the need to get these products to market in the same season as the local producers in California to avoid missing the peak season. Collaboration with customers differed between each respondent, however, it was noticeable that this was crucial and commonplace among most GLBs and Carriers during the event stage of the disruption.

5.3.3 Recovery Phase

Although several of the respondents believed they had not yet entered a ‘recovery’ or ‘post- event’ phase of the COVID-19 disruption, it is important to highlight the resilience plans or adaptations that GLBs and Carriers have utilised in the latter stages of their response. Below, the post-event phase has been depicted from the NVivo data analysis:

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Figure 14- Key themes from the post-event phase of COVID-19

5.3.3.1 Host Factors in Recovery Phase

Feedback from employees or customers and a review of the disruption response was commonplace among the respondents of this study. The majority of GLBs and Carriers believed that they had performed well in responding to the pandemic, with some even commenting that they would not change their approach. GLB4 and SL2 both stated that they performed well with preparations in place and would not alter their approaches. Alternatively, some respondents had highlighted successes and failures of their response, as well as points to improve on or changes that they would incorporate. As an example, GLB6 believed that having a plan and a lead team to guide and drive the changes was the correct approach. Furthermore, it was also “…crucial to listen to the Government and communicate with customers and team members on a regular basis to provide guidance”. GLB7 discussed how improvements could be made industry-wide, including the need to communicate when certain issues arise. The example given was that some exporters or GLBs required assistance during COVID-19 to harvest or sell products through an alternative supply chain route, however they lacked communication with other parties to assist.

Some of the other respondents had not yet determined their successes or failures, however, planned on having a formal review of their response to the disruption once it comes to an end. AIR1 mentioned that they will have a review when the disruption has passed and there will be learnings going forward. GLB1 added to the point by saying that it will not be the last

141 disruption the business faces, but it is a matter of learning lessons from each experience and improving from it. Another approach to reviewing performance and gaining feedback is the use of internal surveys. GLB4 conducted their annual employer opinion survey, a measure of active leadership and employee engagement. After scoring an 87% acceptance level in 2019, this increased to 94% in 2020. The respondent deemed this to be a good indication that the level and quality of information that GLB4 were feeding into their organisation was satisfactory for the team to feel as though they were being well looked after.

As well as reviewing internal business responses, there was discussion around reviewing the performance of customers during the disruption. Respondent C from GLB1 said that although it is still a developing situation, at a later date “…there will be a review of the customers that did well and those that did not”. As well as this, it is crucial to understand what the differences are between their responses and the improvements that need to be made.

5.3.3.2 Agent Factors in Recovery Phase

The focus of the recovery or post-event phase is to reduce any long-term or delayed impacts caused by COVID-19. GLB6 discussed that because they now have first-hand experience of a global scale pandemic, they have built on a contingency disaster plan that focusses on new pandemics or waves of COVID-19 in the future. There will be the steps in place to reduce long- term or delayed impacts from the current pandemic, but also any future pandemics that they may encounter.

5.3.3.3 Physical Environment Factors in Recovery Phase

Infrastructure repairs and re-stocking were necessary for some GLBs following the COVID-19 disruption. Respondent B from GLB3 mentioned that these steps were crucial, especially considering the major ports of New Zealand have demonstrated they are not equipped to handle the resurgence in freight volumes; evidenced by Auckland’s port congestion and the flow on effects around the country.

There were mixed views surrounding whether re-stocking and acquiring backup resources was necessary by the respondents. GLB1 believed that due to a large proportion of their business consisting of perishable freight, the fast-moving nature of these products results in there being little to no long-term storage, meaning that restocking was not required. On the other hand, GLB3 disagreed saying that it was critical for them and is still an ongoing task. In terms of

142 acquiring back-up resources, GLB2 has been purchasing new containers to replace damaged or old containers, but also to operate backup equipment if needed. Although COVID-19 has not altered this dramatically, GLB2 has treated it as a prime opportunity to purchase several additional containers in case they are needed in the future.

5.3.3.4 Social-Cultural Environment Factors in Recovery Phase

Relationship building with prospective customers was prominent amongst the respondents throughout the disruption and has extended into the recovery phase for some GLBs. Respondent A from GLB1 discussed how they had become increasingly accommodating to any customers that approached them for assistance during COVID-19. This even included prior customers who they had experienced difficulties with prior to the pandemic, as they recognized the struggles that exporters were facing. Respondent B added to this by saying that “…securing new customers and opportunities has been our strength over this time”. GLB4 and GLB5 similarly found that relationship building with prospective customers has been core to their business following the disruption. Because some exporters were not getting the desired support from their existing freight forwarders, GLB4 found that they have been tasked with taking on new customers and meeting their specific demands. GLB5 credit their sales and management teams for finding new business during the disruption and believe that this is vital in keeping them operating in the future. Alternatively, some respondents did not find a need to build new relationships as a result of the disruption and instead relied on existing relationships that they had. GLB6 did agree that flexibility, additional communication and support was necessary, however, the business did not receive any new customers as a result. SL1 and AIR1 agreed that the core focus during this time has been maintaining the existing customer base and providing them with quality service. SL1 added that this is partly because of their sales team’s inability to actively find new business with COVID-19 restrictions in place.

Some GLBs have found that their customers have been increasingly adaptive and adjusted to the ‘new normal’ following the COVID-19 disruption. Respondent A from GLB1 discussed how the post-event has been positive due to their customers adjusting to the altered conditions of the operations, including the limited flight schedule that has resulted. Similarly, GLB5 has noticed how their customers have adjusted well to the pricing and rate changes that have increased dramatically as a result of the pandemic.

Lastly, GLB1 discussed how ongoing collaboration with Government agencies will be crucial

143 when responding to future disruptions. They stated that they will continue to work with the Government and agencies including NZTE as they were the key contributors in arranging for the charter flights to operate during the disruption.

5.4 Analysis Summary

When summarising this analysis chapter, the key research objectives were to firstly determine the extent of the impact of COVID-19 on perishable export supply chains in New Zealand, and secondly, to identify resilience plans and adaptations that GLBs and Carriers have implemented in order to overcome the disruption during the preparation, response and recovery phases of the disaster management cycle. From this, the following task was to evaluate the initial effectiveness of these resilience plans and adaptations in the evolving crisis.

When assessing the impact of COVID-19 on perishable export supply chains, there was a common theme among the respondents, with the initial impact being on air freight exports. This was due to the drastic decrease in aircraft operating globally due to travel restrictions and lockdowns being introduced. As well as a shortage of capacity, air freight rates also saw an increase, impacting entire supply chains. The introduction of Government subsidies to support airlines and the wider industry allowed for a limited number of aircraft to continue operating to international markets. This has kept the air freight export operations afloat during the disruption and mitigated serious harm to the industry, with gradual increases in volumes as time progressed. On the other hand, the initial impact on sea freight exports was minimal, with vessels continuing as per normal. As the pandemic spread globally, this began to change as certain ports experienced labour shortages and congestion of both vessels and containers. Ultimately this then led to a higher frequency of blank sailings at some ports. The industry is now experiencing significant long-term impacts on the sea freight operations and several of the respondents suggest this will continue for several months to come. Other than air and sea freight impacts, there are also a small number of other impacts that perishable export supply chains have faced as a result of COVID-19. Some of these include the global- scale nature of this disruption, impacts on supply chain relationships, a volatility of product demands and consumer spending, impacts of social distancing and hygiene protocols, and shortages of labour including RSEs.

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Following this, the resilience plans and adaptations utilised by GLBs and Carriers during the COVID-19 disruption were analysed. This analysis was formed around both the disaster management cycle and Haddon Matrix, meaning the factors were broken down into the phase of the disaster (pre-event, event and post-event), as well as the specific factor categories adopted from the Haddon Matrix (host, agent, physical environment or socio-cultural environment). This analysis helped to develop a revised Haddon Matrix that is discussed in the following section. The Haddon Matrix approach has been utilised because it is a simple to use tool that divides each phase of the disruption, as well as the certain factors within each phase. This allows for more specific findings within each phase and clearly outlines the factors of response. By conducting this research, a revised Haddon Matrix has been created in order to provide industry managers or researchers with a fresh, new planning tool that will assist in overcoming further waves of COVID-19 or new pandemics that may occur in the future.

5.5 Revised Haddon Matrix

Prior to the data collection phase, a hypothesised Haddon Matrix (Table 5) was depicted from various sources of literature. The purpose of this was to form a preliminary understanding around potential resilience plans and adaptations that GLBs and Carriers could utilise for the COVID-19 disruption. Upon completing case studies with several GLBs and Carriers, a revised Haddon Matrix has been formed to outline the resilience plans and adaptations that these respondents within the study have utilised during the preparation, response and recovery phases of the disaster cycle (Table 20).

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Table 20- Revised Haddon Matrix applied to COVID-19 disruption response

Phase Host Agent Physical Socio-cultural (Global Supply Chain - GLB) (COVID-19 environment environment disruptions) (Physical assets, (Relational climate of

labour, built inter-organisational environment, IT) links)

Pre- - Primary responsibility - Preparedness - Operating a - Diverse supplier and involvement in towards a safe working base event planning pandemic environment - Collaboration - Awareness of potential - Resilient or with key disruptions back-up stakeholders infrastructure - Risk assessment

- Scenario analysis

- Plan development

- Documentation/practice

Event - Execution and success - Rapid - Availability of - Contractual of plans response to a contracted flexibility with (during) pandemic logistics assets external - Adaptation and (containers, stakeholders flexibility of plans trucks, air & sea Carriers) - Government - Leadership and internal influence and communication - Adaptability of fiscal support labour - Dispersed and - Collaboration multinational - Resource with customers operations allocation and use

Post- - Feedback and review of - Effort to - Infrastructure - Relationship disruption response reduce long- repairs and building with event term or upgrades prospective - Implementation of delayed customers necessary changes to impacts - Re-stocking and the supply chain resulting acquiring back- - Customer from a up resources adjustment to new operations pandemic - Ongoing collaboration with the Government agencies

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When comparing the hypothesised and revised Haddon Matrices, there are many similarities, but also some noticeable differences in each of the three phases. In the pre-event or preparation phase, it was clear there was awareness around potential disruptions and plan development, however this was heavily focussed toward prior or common disruptions including earthquakes, fire, cyberattacks or loss of power. There was also much more of an emphasis around the primary responsibility of planning and who was involved in the process during the preparation phase, with most organisations relying on high level management teams or managers. Operating a safe working environment was essential to some respondents, discussing the importance of safety for their staff during a disruption. Furthermore, resilient or back-up infrastructure was prominent among respondents, with most operating emergency resources or protocols in the likelihood of a disruption. In terms of the socio-cultural environment, this was almost identical to the hypothesised matrix, with respondents discussing the need for a diverse supplier base and collaboration with key stakeholders prior to a disruption. Although some did not involve external organisations within their planning phase, continuous communication was stressed by the respondents.

In the event or response phase of the Haddon Matrix, again there are a number of similarities between the matrices, while a small number of variances are also present. Respondents discussed how the execution of their plans was a factor in response to COVID-19, with some experiencing successful plans, while others found the disruption to be far more severe and last longer than what was anticipated. This required them to be far more adaptable in their approach, with many of the respondents outlining that flexibility was required when following their initial plans, but also in terms of their contracts with external stakeholders such as customers or Carriers. Internal and external communication was critical during the response phase, with almost every GLB and carrier stating that their communications had increased dramatically during the pandemic with all of their stakeholders. Another factor that was prominent in the response phase of COVID-19 was the Government’s influence and fiscal support toward GLBs and Carriers. Subsidised flights were the most common talking point among respondents, with the New Zealand Government and their agencies funding specific airlines to continue operating a small number of aircraft to support exporters. Furthermore, they were responsible for implementing COVID-19 protocols including social distancing and increased hygiene practices following the pandemic. The approach that the Government took had a telling effect on the response of GLBs and Carriers. In terms of the physical environment

147 factors, the availability of contracted logistics assets was critical in the response phase and has been evident with the shortage of aircraft operating during COVID-19. Without these assets available to GLBs, their exporting operations become increasingly difficult to maintain as they have no way to move the products to international markets. The adaptability of labour was also discussed by the respondents, with several GLBs and Carriers making changes to the way their staff operated, including WFH and split shift scenarios. Lastly, resource allocation and use was another commonly discussed topic, with respondents suggesting that although this may not have been within the same timeframe during COVID-19, it was essential to allocate resources to customers. Some respondents stated that certain customers required a priority of resources and this was most commonly those who handle perishable commodities.

The post-event or recovery phase also had similar findings. Although some respondents believe they are still operating in the response phase of the disruption, feedback and a review of the response to COVID-19 is necessary, with an evaluation of both the performance of external stakeholders, but also their own internal performance. As well as this, respondents discussed how any necessary changes to the supply chain have been implemented to improve the response. A small number of respondents discussed the need to repair infrastructure or re-stock resources. Much of this discussion was surrounding sea freight and the congestion issues at New Zealand’s ports during the pandemic, with recommendations to upgrade this infrastructure, while a need re-stock reefer containers was also raised by some respondents. Finally, the socio-cultural environment factors were also similar to the hypothesised Haddon Matrix. Relationship building with prospective customers was mentioned by approximately half of the respondents, while the other half tended to support their existing customers during the pandemic. What differed was that some respondents said their customers adjusting to new operations had been crucial in the recovery phase, with significant changes being made in regard to air freight rates and capacity shortages. A small number of respondents also discussed the need for ongoing collaboration with Government agencies following the disruption to prepare for future waves of COVID-19 or other disruptions that may occur.

5.5.1 Importance and Relevance of Approach

The purpose of this section is to outline why it is both important and useful for future managers or researchers to adopt or utilise this revised Haddon Matrix. After analysing the COVID-19 preparedness of each of the GLBs and Carriers within this study, approximately half

148 believed they were prepared, while the remaining half believed they were not. It is no surprise that around 50% were unprepared since this is the first time any of these firms have experienced a pandemic disruption to their supply chain. There are a wide range of resilience plans and adaptations that are applicable from other prior or anticipated disruptions. This can be observed through the similarities of the hypothesised and revised Haddon Matrices (Table 21). Within this table, the similarities between both Haddon Matrices are highlighted in each phase of the disruption, as well as any additional factors that have been included into the revised Haddon Matrix. The experience that COVID-19 has provided GLBs and Carriers is unprecedented. It has been influential in developing their knowledge and understanding of the factors that can have an impact on each stage of the specific disruption. Several factors have been specified by the respondents of this study to have attributed to their response to COVID-19 and therefore, they now feature within this Matrix. The revised Haddon Matrix provides a fresh and relevant approach for managers of these specific firms, to plan for further waves of COVID-19, or new pandemics that may occur in the future. This matrix is specifically suitable for a pandemic as this was the core focus of the research and therefore the respondents were questioned on this basis. Although this matrix could be adapted to other forms of disruptions, the factors of this matrix are formed around the COVID-19 pandemic. This should be considered when applying this matrix to other forms of research or business planning and response.

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Table 21- Comparison between the hypothesised and revised Haddon Matrices

Phase of Factor Similarities between both matrices and new additions to the disruption revised Haddon Matrix

Host Similarities: Risk assessment, awareness of potential disruptions, plan development

Additions: Primary responsibility and involvement in planning, scenario analysis, documentation/practice

Agent Similarities: Preparedness towards a pandemic

event

- Physical Similarities: Resilient or backup infrastructure Pre environment Additions: Operating a safe working environment

Socio-cultural Similarities: Diverse supplier base, collaboration with key stakeholders environment

Host Similarities: Execution and success of plans

Additions: Adaptation and flexibility of plans, leadership and internal communication, dispersed and multinational operations

Agent Additions: Rapid response to a pandemic

Physical Additions: Availability of contracted logistics assets, adaptability of

Event environment labour, resource allocation and use

Socio-cultural Similarities: Government influence and fiscal support environment Additions: Contractual flexibility with external stakeholders, collaboration with customers

Host Similarities: Feedback and review of disruption response

Additions: Implementation of necessary changes to the supply chain

Agent Similarities: Effort to reduce long-term or delayed impacts resulting from a pandemic

event

- Physical Additions: Infrastructure repairs and upgrades, re-stocking and environment acquiring back-up resources

Post Socio-cultural Similarities: Relationship building with prospective customers, environment Additions: Relationship building with prospective customers, ongoing collaboration with the Government agencies

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5.5.2 Model Critique

Within this study the Haddon Matrix was utilised as the primary conceptual framework to generate resilience plans and adaptations within the pre-event, event and post-event of COVID-19. The temporal dimension of this tool is specific to the disaster management cycle (Safran, 2003) in that it divides the event into specific phases, therefore the dissecting of relevant information is a more straightforward and clearer task. As well as this, the specific contributing factors of the Haddon Matrix are also divided into the host, agent, physical and socio-cultural environment. Within this research, the agent factor proved to be ineffective. The nominated agent factor was ‘COVID-19 disruptions’, however there was a lack of information gathered from respondents on this factor. Prior literature on the use of the Haddon Matrix suggested that the merging and splitting of some cells within the Haddon Matrix may be necessary, due to the paucity of information in some cells and alternatively, the abundance of information in others (Sadeghi-Bazargani et al., 2012; Bradley, 2016). Using the identical format when categorising the data may not be the most suitable approach in all cases of research. On a different note, the factor may have been too conceptually broad to obtain specific information from the respondents, or alternatively, the interview protocol may not have been aligned to this factor, therefore, the questions that were asked to the respondents did not correlate to this agent factor. Because this research was highly focussed on the global supply chains of GLBs and Carriers (host factor), it is also likely that the agent factor was not as necessary to this research as the host, physical and socio-cultural environments were. To improve this outcome, either the research protocol needed to be more relevant to the ‘COVID-19 disruptions’ agent factor by basing questions on the preparedness, rapid response and attempt to reduce long-term impacts of the pandemic, or alternatively, the agent factor does not need to be utilised within this study.

Another point of discussion in terms of the Haddon Matrix is the level of adaptability that it has. Different users of the Matrix would identify alternative contributing factors or have different depictions of an identical factor according to the theoretical conceptual framework they use (Sadeghi-Bazargani et al., 2012). Because of this there is a sense of bias in terms of what the specific user deems the contributing factors are. This may result in the issue discussed above where certain cells are more productive than others, ultimately impacting the data collection phase. Furthermore, with only a limited number of factors utilised within the Matrix, the findings within this research are only based on what the respondent comments

151 on. Therefore, this information provided by the respondents does not give a complete picture of their response to COVID-19 and the steps they took. There would have been more observable and obvious actions that GLBs and Carriers took that were not mentioned in the interview phase and so the Haddon Matrix may lack specifying these. This is an inherent limitation of the Haddon Matrix.

The author of this research noticed several advantages when using the Haddon Matrix in a qualitative research methodology. Firstly, in conjunction with the interview protocol, the Haddon Matrix aided in designing the appropriate questions to obtain data from the respondents that would help to answer the research objectives. By dissecting the temporal phases of COVID-19 and the contributing factors, the interview questions were able to be based off these and thus contribute to the data collection phase. As well as this, it allows for the researcher to understand what areas or ‘cells’ of the research are rich in information or conversely, what areas need attention or are lacking information. This relates to the agent factor and the noticeable lack of data gathered. However, in some cases the quantity of data within a certain cell does not necessarily account for the quality of data. Finally, the analysis provided on this Matrix may help to improve the findings and future discussions on other forms of research that utilise this method.

Overall, the Haddon Matrix has proven to be an applicable framework in this qualitative research, during the methodology, data collection and analysis phases. The findings that have been provided are detailed and rich information that may be useful for firms when responding to a pandemic disruption, specifically perishable export supply chains in New Zealand.

The final chapter aims to provide a summary of the findings throughout this research and give insight into whether or not the Haddon Matrix approach was successful. Furthermore, it focusses on any theoretical and managerial implications that were experienced during the course of this study, as well as the contributions to literature or the industry that resulted. The potential for future research will then be covered.

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6 Conclusions

This final chapter presents the conclusions of this research, with further discussion on the prior chapters. A summary and reflection of the research questions will be examined, as well as a conclusion of the research findings. Following this, the contributions of this research to literature will be presented, along with any research and theoretical limitations. Lastly, areas of future research will be considered.

6.1 Summary

The aim of this research was to firstly, determine the extent of the impact of the COVID-19 pandemic on perishable export supply chains in New Zealand. The second research question or objective was to identify the resilience plans and adaptations that GLBs and Carriers have implemented in order to overcome supply chain disruptions during the preparation, response and recovery phases of the cycle. Finally, the third research question was to evaluate the initial effectiveness of these resilience plans and adaptations in the evolving crisis.

After assessing the impacts of COVID-19 on perishable export supply chains, it can be determined that there are several key findings. Initially, there was a major decline in the number of aircraft operating during the pandemic due to the decrease in passenger volumes, therefore resulting in limited capacity for New Zealand exports to international markets. Although the Government subsidies have supported some airlines and the wider industry by allowing for a limited number of aircraft to continue to operate, inflated freight rates have still impacted GLBs and exporters. Passenger volumes have had gradual increases since the outbreak, but capacity has only slowly increased for exporters. In terms of sea freight, the initial impact on exports was minimal, with most vessels and ports continuing to operate as per normal. This changed as the pandemic spread globally, with some ports experiencing labour shortages and congestion of both vessels and containers. GLBs then began to experience blank sailings at some ports, causing a number of issues along the supply chain. Longer term impacts are now prevalent in sea freight operations and these are expected to be present for several months to come. This includes further port congestion and capacity issues, as well as blank sailings. There has also been a number of other impacts that perishable export supply chains have faced as a result of COVID-19. The global-scale nature and length of this disruption has caught many respondents by surprise as their plans did not consider this

153 outcome a possibility. The pandemic also caused volatility in terms of product demand and consumer spending, especially during the lockdowns when restaurants were closed and the demand for food service products dropped off significantly. The impacts of social distancing and hygiene protocols in New Zealand has also impacted the efficiency of some operations along the supply chain, including in packhouses and port operations.

When evaluating resilience plans and adaptations that were utilised by the respondents in this study, several of the attributes were successful and assisted in their response to COVID-19, while only one stood out that was negative. The most crucial attributes as discussed by the respondents were continual communication and collaboration with their stakeholders along the supply chain, the adaptation and flexibility of plans during the response, operating resilient or back-up infrastructure, the government’s influence and fiscal support provided throughout the disruption, and lastly, the adaptability of labour. Each of these factors were discussed by almost all of the respondents in this study and played a critical part in their response to the disruption. For the most part, GLBs and Carriers utilised these successfully, and overall, they attributed these to the mainly positive outcomes experienced. In terms of the attributes that did not assist in the response of GLBs and Carriers, these were limited but an obvious one was the availability of contracted logistics assets including containers, trucks, sea and air Carriers. Several respondents discussed capacity and asset shortages, but also the unavailability of containers, especially refer containers, that is currently still a serious problem for exporters in New Zealand. For the most part, it was not a matter of GLBs and Carriers employing unsuccessful plans and adaptations in their response, but instead, it was several uncontrollable factors that caused most problems. Capacity and labour shortages are factors that were out of the control of GLBs and ultimately, these have led to the major impacts during COVID-19 such as port congestion and blank sailings.

6.2 Theoretical Implications/Contributions

There are several theoretical implications and contributions relating to this research. Prior to this research there was a limited amount of corresponding literature and theory relating specifically to pandemic disruptions or their impacts on perishable supply chains, as well as resilience plans or adaptations to counter them. There were some relevant theoretical frameworks including the literature on disaster management (Safran, 2003; Ivanov & Wendler, 2020; Van Wassenhove, 2006), and supply chain resilience (Pettit et al., 2010; Hecht et al., 2019), however, they lacked detail on perishable supply chains and especially the 154 impacts caused by pandemic disruptions. However, these foundations of literature did help to evaluate several key ideas around the ways that firms and their supply chains mitigate and respond to disruptions and their associated impacts.

Another noticeable implication was that because this research commenced shortly after the initial outbreak of COVID-19, there was very little literature on the pandemic. However, as time wore on, theory has started to build on pandemic disruptions, meaning that new literature has been introduced after the early stages of this research.

An additional theoretical contribution is the use and adaptation of the Haddon Matrix for pandemic disruptions. Indeed, the original use of the Haddon Matrix was for public health emergencies as a development and planning tool that could help organisations to better understand, prepare and respond to events and even disasters (Barnett et al., 2005). It had however previously been applied by other authors in areas such as the spread of influenza pandemics, emergency preparedness and drowning prevention for health services (Barnett et al., 2005). Following this research, it has now been applied to perishable export supply chains and more specifically, the response of GLBs and Carriers during the COVID-19 disruption. It is, however, important to review the functionality and performance of the Haddon Matrix within this research in order to demonstrate its applicability toward other forms of research.

Indeed, this research has provided good evidence of the usefulness of the Haddon Matrix as a primary interpretative framework for this study. The purpose of the matrix is to identify four specific factors within the three different phases of a certain event. This helps the researcher and manager to consider and cross-tabulate issues and areas of interest with different factors over different phases. The phases of the matrix are the pre-event, event and post-event, while the factors are host, agent, physical environment and socio-cultural environment. When applying the Haddon Matrix to this research, the factors that were used included: Global supply chains of GLBs (Host), COVID-19 disruptions (Agent), physical assets, labour, built environment and IT (Physical environment) and lastly, relational climate of inter- organisational links (Socio-cultural environment). Although the formatting of the matrix was somewhat appropriate, there were two noticeable issues. The first was that several respondents argued the industry had not yet experienced the ‘post-event’ of COVID-19. This phase of the event was present on the matrix, so it meant that there was disparity between what the respondents considered a ‘post-event’ in comparison to the research. This may have impacted the results or findings during this phase as the respondents may not have truly

155 experienced it. Indeed, this is an important temporal issue that other researchers may face and has been exacerbated as the duration of the current pandemic has exceed everyone’s estimates. Secondly, the agent factor also proved to be ineffective. The nominated factor was ‘COVID-19 disruptions’, however this factor may not have been suitable as the agent factor due to the limited information sourced from the respondents regarding this. It may have been that the factor was too conceptually broad to obtain specific information from the respondents, or alternatively, the interview protocol may not have been aligned to this factor, therefore the questions that were asked to the respondents did not correlate to this agent factor. Because this research was highly focussed on the global supply chains of GLBs and Carriers (host factor), it is also likely that the agent factor was not as necessary to this research as the host, physical and socio-cultural environments were. To improve this outcome, either the research protocol needed to be more relevant to the ‘COVID-19 disruptions’ agent factor by basing questions on the preparedness, rapid response and attempt to reduce long-term impacts of the pandemic, or alternatively, the agent factor does not need to be utilised within this study.

Overall, the Haddon Matrix was used to firstly develop a hypothesised matrix of resilience plans and adaptations from prior literature. Following this, a revised matrix was then developed from the case studies within this study, with recommendations given when responding to a supply chain disruption such as COVID-19. The key advantage of the Haddon Matrix is that it is simple to use, conceptually easy to grasp and proved to be a useful tool in providing a range of findings for this research. With this in consideration, the Haddon Matrix approach would be recommended for alternative types of research as it is a practical, user- friendly tool that can be modified to suit specific factors and phases of any event.

6.3 Managerial Implications/Contributions

There are a few managerial implications or contributions that have resulted from this research. Because air freight capacity has and continues to be an issue for New Zealand exporters during the COVID-19 disruption, attracting international tourists or visitors to New Zealand would increase aircraft operations and therefore provide much needed additional freight capacity for time sensitive cargo bound for international markets. This should involve both Christchurch and Auckland International Airports, as well as other tourism partners including New Zealand Tourism, making larger investments in promoting tourists and international visitors to visit New Zealand. With New Zealand having the advantage of being

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COVID-19 free, it acts as a major selling point to tourists. As New Zealand begin to open their borders to other COVID-19 free countries including the recent move to an ‘Australia – New Zealand bubble’ on the 19th of April 2021, this will open up the possibilities for tourists to visit and ultimately provide airlines with an incentive to operate additional aircraft.

Another change that was urged by some respondents within this study is the need for infrastructure upgrades at New Zealand’s major ports. Along with many other ports globally, the ports of Auckland and Tauranga have demonstrated they were not equipped to handle the resurgence of freight volumes following the initial COVID-19 impacts. This has been evidenced by major port congestion and the flow on effects around the country including frequent blank sailings and cargo relocations. By making such upgrades, it could better prepare the ports as well as the industry for future disruptions and reduce the impacts had on export supply chains. The commercial paradox for managers to grapple with is the lack of economic incentives for this additional capacity investment vis-à-vis the investment needed for resilience by carrying a degree of redundant/overflow capacity.

The final contribution from this research is the application of the Haddon Matrix and the development of a revised Haddon Matrix outlining the resilience plans and adaptations that GLBs and Carriers within this study have utilised during the preparation, response and recovery phases of COVID-19. This research has validated a revised Haddon Matrix and suggests that this can be used by managers or researchers when planning for future pandemic related disruptions. Especially given the further waves of COVID-19, or the likelihood of a new pandemic or epidemic in the future. As the industry moves into a post-event phase, there are likely to be additional factors that could be added to this Matrix, however, according to the respondents of this study, that phase could still be some time away from happening. It may be that only certain parts of this Matrix, as it stands, are useful or adopted by managers or researchers. This is especially relevant if they operate as a different node or tier within the fresh produce supply chains of this study, as they would have a different perspective to the disruptions. This may include primary producers or growers that may have been impacted slightly differently to GLBs or Carriers during this disruption. Indeed, this is an area of further research.

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6.4 Limitations

There were several limitations regarding this research. Firstly, the impacts of COVID-19 influenced the participation of some GLBs and Carriers within the population, who could not take part in the research as a result. The operations of most GLBs became busier due to the pandemic, with an extended peak season occurring over the interview phase of this research. Therefore, a small number of GLBs and Carriers declined taking part in the research. As well as this, due to there being travel restrictions within New Zealand around the time of the interview phase, this meant that travelling to Auckland for further interviews was not accomplished in-person. Therefore, this reduced the sample size of GLBs and Carriers to a total of ten businesses and 13 respondents.

In terms of any limitations regarding the use of the Haddon Matrix, when choosing four factors that fit within the model (host, agent, physical and socio-cultural environments), this may have limited the findings of this research, or not provided a comprehensive outline of the disruption. For example, there were several external impacts that also resulted during COVID- 19 that may have played a role in the performance of GLBs and Carriers during this time. These included port strikes in Australia and a death at the Port of Auckland that both resulted in decreased labour and efficiency. These factors were not fully accounted for when using the Haddon Matrix and ultimately, it may mean that other information was missed during this study.

The case study method was utilised well in this research, however, there were some limitations when using it. Some GLBs and specific respondents provided more information than others during the interview phase, and although conducting several interviews resulted in alternative perspectives on the disruption, this differing level of detail may have caused some bias. Those that provided more information in the interviews were likely to have their ideas come across more in this research than those that did not.

6.5 Future Research

When reviewing the results and implications of this research, there is potential for several areas of future research. This specific research is focussed on two nodes of the perishable exporting supply chains in New Zealand and they are the GLBs and the Carriers, including airlines and shipping lines. The recommendations for future research are to:

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a) Examine the earlier stages within this supply chain process, gaining insight into how perishable commodity growers, producers and packhouses have been impacted as a result of the COVID-19 disruption, and whether this has in turn, impacted the latter stages of the supply chain process.

b) Secondly, investigate the response of GLBs and Carriers to future pandemics/epidemics in order to understand whether experiencing COVID-19 has further prepared them to withstand supply chain disruptions of this nature. Furthermore, outline if these firms have implemented any new or alternative resilience plans in order to prepare and overcome such disruptions.

c) Lastly, identify the long-term impacts of COVID-19 on air and sea freight operations in New Zealand. As the industry is not yet considered in a ‘post-event’ phase, further awareness around the lasting impacts of the pandemic would provide a conclusive picture of the total impact that COVID-19 has caused, not only to these supply chains, but more particularly, the Carriers that transport these perishable products to the final markets.

6.6 Final Remarks

The COVID-19 pandemic has proven to be a unique and challenging disruption globally. This is no different for the perishable export supply chains studied here with many impacts resulting from the pandemic and testing the resilience of these supply chains in the process. The length and global-scale nature of this disruption is something that was not considered by most within the industry. As the global demands and freight volumes remained or even grew in some periods, GLBs and Carriers were required to meet the needs of their customers while enduring a several major impacts caused by the pandemic including capacity, labour and equipment shortages, as well as severe port congestion. The majority of GLBs and some Carriers coped well despite their lack of specific pandemic planning in place, but flexibility and communication was key. The New Zealand Government’s influence and fiscal support during the pandemic was vital to keeping freight moving and providing safe working environments. This study utilised a Haddon Matrix approach that has helped to evaluate the response of GLBs and Carriers during COVID-19 and provide an updated, fresh planning tool for managers or researchers to approach further waves of COVID-19 or new pandemics that may occur.

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Appendix A – Interview Protocol

Part 1 - Introduction and Background Information 1. Can you tell me a little bit about the business? - How many employees do you have working here? - What is your role within the business and what does this involve? - How long have you been with the business? 2. How many tonnes of perishable products do you export on average per year? - What products are you exporting that are perishable? Part 2 - Pre-event (COVID-19) 1. How prepared would you say the business was for this disruption to the supply chain? - What was the business doing to prepre for such disruptions? - What kinds of disruptions were you preparing for? - What risk management processes/approaches/tools are in use to identify and access risks? - How would you characterize the level of ongoing effort in preparedness? - Does the organisation record incidents and near misses to reflect on? 2. Do you have a formal plan or emergency protocols? What about informal planning? - What do the plans entail? - How often are they updated? - How are the plans communicated within the business? Are they ever tested? - Do these plans involve other organisations? If so, what ones? - What motivated the organisation to develop these plans? and when? - How effective did you think your team would be in carrying out the plan? - Do you know whether your suppliers planned for such disruptions? 3. Who has the primary responsibility for emergency planning and response? - Who decides on the protocols? - To what extent are supply chain specialists (purchasing, logistics, operations) formally involved? 4. Besides the business’s plans, are there any other voluntary/mandatory Government requirements for emergency preparedness that you must follow? 5. Have you experienced any other disruptions that have initiated the use of these plans? - If yes, how did it go? 6. What were the expectations for employee attendance during the disruptive event? Part 3 - Event (COVID-19) 1. How did the virus impact your exporting operations for perishable products? - What was the biggest surprise or impact that was had on operations? 2. Have you ever experienced impacts quite like this pandemic? If so, what? - How has this impacted your operations differently from any other disruption? 3. How successful were the plans that were in place? - Did your employees execute the response plan? 4. Were any adaptations made that were not in the plan? If so, what? - Were they successful? 5. How did your supply chain respond as a whole? - How did it affect your supply chain relationships? - Was there flexibility or did the contract control the relationship? - How did you allocate resources to customers? 6. Did you receive any Government advice or guidance during disruption? Part 4 - Post-event 1. What did the post-event look like? - Did any infrastructure repairs or re-stocking need to be carried out? - Did you have to be flexible in relationship building with new suppliers/customers? 2. What confidence do you have in your organization’s ability to operate during another disruption and recover from it? 3. What would you do differently? i.e. what did not work/how would they improve on it

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