Mainfreight has introduced a vaccination mandate for all of its New Zealand team members and is reporting ongoing international freight congestion and Omicron disruption.
In a recent New Zealand stock exchange (NZX) trading update for the 43 weeks to December 31, managing director Don Braid said its vaccination mandate for all local staff came into effect on January 17.
Preparations also continue for absenteeism as a consequence of the Omicron variant outbreak.
In 2021 Mainfreight employed 2627 staff in New Zealand, and 9240 across all countries it operated in.
Total group revenue for the period across all regions was up 45% year-on-year to just over $4.1 billion and profit before tax was up 85% y/y to $372 million.
This was in light of elevated freight rates with international shipping and airfreight continuing to be impacted by congestion “and with demand far exceeding supply”.
The company reports that COVID-19 Omicron restrictions have impacted service levels through absenteeism in its Australia, Europe and North America operations.
However, it is yet to see any impact in its New Zealand and Asia businesses although China’s border restrictions are tightening.
It is expecting elevated freight volumes to continue as the calendar year progresses and managing service levels on behalf of customers will be “a key priority”.
Mainfreight’s New Zealand transport volumes remain at “elevated levels” compared to prior periods, with 2021 Christmas volumes the largest on record.
Its warehousing business has demand at its “highest levels” as customers look to increase their stock holdings. Additional facilities are providing capacity and it has new warehousing building projects underway in Hamilton and Auckland.
Meanwhile, port congestion and restricted container equipment supply, particularly across Asia and the USA, “remains a concern and is contributing to the congestion issues”.
“We continue to lobby shipping lines for space availability on behalf of our customers – with some success, including finding alternative solutions where possible.
“However, some of the customer growth we are experiencing may be limited by these conditions in the short term,” Braid says.
“Navigating constraints due to Omicron-enforced absenteeism remains a priority for us. Meeting our current customer service requirements is a key objective through to year-end.
“Our intensive network model, with multiple branches and warehouses, provides us with access to alternatives, should we encounter infection issues at specific sites.
“Contactless delivery with increased safety protocols, and split shifts in our warehouses, are also being applied in preparation for further COVID-19 disruption,” he says.
Mainfreight is currently trading at just under $90 per share. Its full year financial results will be released to the market on May 26.
