New Zealand needs a strategy re-think

Addressing the Fourth Intermodal Asia 2010 Conference in Sydney, Mr Madsen said “new standards have been set” and there was “no going back”.

“Capital expenditure must be controlled, waste must be eliminated, customer service standards have been raised with customers becoming even more demanding, and competition will become even tougher in the future,” he said.

Predicting a slow post-recession recovery, Mr Madsen said port shareholders needed to accept lower interim returns and port management needed to focus on optimising existing assets and curtailing capital expenditure.

“I believe that many ports will only be prepared to make major investments on the back of very firm, long-term customer commitments and contracts, not in a speculative fashion – which probably has been the case, to some extent, in the past.

“Variable costs, including labour, will also come under increased and ongoing scrutiny, with new, more flexible labour models needed for ports to remain competitive.

“The new dynamics also require fresh thinking and a focus on identifying new revenue streams that offer synergies with ports’ core businesses.”