Australasian Feature Third Lead

Resisting calls from some within the sector to “encourage” the predominant council shareholders to view assets commercially, Transport Minister Steve Joyce says shippers and the next-generation of vessel callers will already provide sufficient “drivers”.

“What I am seeking to do is overall take a watching brief and encourage those who are shipping the goods and the logistics companies and port companies to work together to the best interests of getting stuff to markets as quick as they can,” he says.

“I don’t believe there is anything stopping them from doing that and we are seeing developments in that area with some of the decisions that Fonterra has taken this year and I think we’ll see further developments.”

The country’s leading shipper, Fonterra, recently announced it was rescinding a previous policy to ship from the ports nearest to its dairy factories and instead target ports that provide direct export services to its global markets.

As a consequence, the ports of Auckland, Tauranga, Lyttelton and Napier have gained solid volumes, while considerable container throughput has been lost by such ports as Taranaki, Timaru and Otago.

Although numerous opinions are being proffered on exactly how the local port scene should evolve, there is undoubted consensus that rationalisation is required in some form given the duplication of investment and predominantly average financial returns across the country’s multitude of international ports.

These realities were brought home in the Long-term optimisation of the New Zealand port sector report prepared by Auckland Regional Holdings, the parent of Ports of Auckland.

The report hypothesises NZ’s small and fragmented container volumes may not prove attractive to future international direct callers given both global shipping industry consolidation and the pending onset of larger vessels.

With Australia’s three major ports also planning considerable investment to handle greater volumes, the report says NZ’s future international container trade may fall victim to hubbing via Australia.

“New Zealand’s international competitiveness depends on its ability to connect directly with its large export markets,” says the report. “Loss from export delays of perishable agricultural products is around 3% of trade for each extra day.”

The report urges consolidation to possibly three international container ports – two in the North Island and one in the South Island – with other local ports evolving to feeder roles.

A report is pending on a possible merger of the country’s two major Southern ports – Lyttelton and Otago – while it remains to be seen if Auckland and Tauranga can shelve their competitive differences and re-open merger discussions.