The Hidden Risk for NZ Export Crop Growers

Growing a successful crop is only half the challenge for New Zealand's export horticulture sector. Getting it off the farm, into cold storage, onto a vessel, and delivered to international markets — at the right quality and on time — is the other half. And increasingly, that journey involves significant risk.

New Zealand's top export crops — kiwifruit, apples, wine, onions, and squash — depend on a global logistics chain that has been under significant pressure. COVID-era disruptions reshaped supply chains, and ongoing geopolitical tensions have added new layers of uncertainty for growers and exporters.

The Impact of Global Disruption on NZ Crop Export Logistics

Red Sea and Suez Canal Disruptions

The escalation of attacks on commercial shipping in the Red Sea from late 2023, and the subsequent rerouting of vessels around the Cape of Good Hope, added 10–14 days to transit times between NZ and European markets. For fresh produce like apples, kiwifruit, and stone fruit, extended transit times directly affect product quality on arrival.

For NZ export growers, the practical impacts included:

  • **Increased freight costs**: Cape of Good Hope routing added 25–40% to shipping costs on NZ-Europe routes
  • **Cold chain integrity risk**: Longer transit times increase the risk of quality deterioration, particularly for sensitive produce like kiwifruit and cherries
  • **Port congestion**: Rerouted vessels created knock-on delays at NZ loading ports

War Risk in Marine Cargo Policies

Standard marine cargo policies include war exclusion clauses. Vessels transiting through or near conflict zones may void cargo insurance coverage unless a specific war risk extension has been purchased. NZ growers and exporters need to confirm with their insurer or broker that marine cargo cover includes war risk extension where relevant — and understand whether routing through affected regions triggers exclusions.

What Insurance Covers for Export Crop Growers

Marine Cargo Insurance

Marine cargo insurance covers physical loss or damage to goods in transit. For NZ export crops this is critical. Key cover areas:

  • **Physical damage in transit**: Crushing, contamination, breakage during loading, transit, or unloading
  • **Temperature excursion**: Most policies for fresh produce include temperature failure cover for refrigerated containers
  • **Vessel general average**: If a vessel incident requires cargo to be jettisoned, marine cargo insurance covers your share of the cost
  • **War risk extension**: Covers loss from war, strikes, riots, and civil commotion in transit zones

What Marine Cargo Does NOT Cover

  • Market price decline on arrival not caused by an insured peril
  • Customs delays or detention
  • Rejection for contractual reasons unrelated to transit damage
  • Regulatory import restrictions or market access changes

The Boundary Between Crop Insurance and Marine Cargo

  • **Crop insurance** covers loss or damage while the crop is growing, at harvest, and typically through to delivery to the packhouse or cool store
  • **Marine cargo insurance** takes over once the crop leaves the packhouse and enters the logistics chain

Gaps can exist during post-harvest storage and cool store periods — a specialist broker will identify these and ensure continuity of cover.

Revenue Implications of Logistics Disruption

Beyond direct physical loss, logistics disruption has revenue implications that standard crop insurance does not address:

  • Price collapse due to oversupply when delayed shipments arrive in market at the same time as other origins
  • Contract penalties for late delivery
  • Relationship damage affecting long-term market access

Revenue protection insurance and trade credit insurance are separate products that can partially address these risks.

What NZ Export Growers Should Do

1. Review your marine cargo cover annually: Ensure your policy includes temperature excursion cover and war risk extension where relevant

2. Confirm there is no coverage gap: Ensure continuity between crop insurance and marine cargo

3. Talk to your broker about routing changes: Routing changes may affect your cover

4. Consider revenue protection: For export-dependent operations, revenue protection provides a safety net against price and volume shortfalls

5. Keep records of logistics costs: Documentation of freight costs, cold chain records, and delivery timelines will be critical in any transit claim

Our specialist brokers work across both crop insurance and marine cargo and can ensure your export crop operation has seamless cover from field to foreign market. Contact us to review your full insurance programme.