Jamie Gray

Jamie Gray is a business reporter for the New Zealand Herald and APNZ wire agency

Port row: $100k a week down drain

Ports of Auckland chief executive Tony Gibson.
Photo / supplied
Ports of Auckland chief executive Tony Gibson. Photo / supplied

Business worth $100,000 a week to Ports of Auckland is likely to end up at Tauranga and Napier after Fonterra said it would move shipments away from Auckland.

The dairy giant confirmed yesterday it would move the shipments worth $27 million a week from the end of January because of an industrial dispute between Ports of Auckland and the Maritime Union.

"The co-operative made this decision to ensure certainty of supply for its international customers," said Dave Christie, Fonterra's general manager for customer supply chain.

Ports of Auckland chief executive Tony Gibson said Fonterra's move was directly related to the threat of strike action.

The union and the port company have been at loggerheads over an employment contract, sparking off a strike and a lockout last month in the busy pre-Christmas period.

Gibson said Ports of Auckland was beefing up resources to keep terminal operations open through the continued industrial action.

Further strike action is planned for a 48-hour period, starting on January 9.

To date, the industrial action has cost the port $2.82 million in lost revenue, port spokeswoman Dee Radrakrishnan said.

From the end of this month, Fonterra will direct product through Tauranga and Napier instead of Auckland, the port company said.

If Fonterra follows through, it will mean the loss of a second major customer for the port in a month following shipping line Maersk's decision to re-route its Southern Star service to the Port of Tauranga.

The prospect of more business has given Port of Tauranga's share price a boost. The stock rallied by 15c yesterday to close at $10.10 - a record high.

Gibson said that with the union threatening further strike action, it was "inevitable" that customers would look for alternatives and contingencies.

"Shippers need certainty and reliable service," Gibson said.

But Maritime Union president Garry Parsloe said shipping companies, exporters and importers change their ports all the time.

"They [Fonterra] may have shifted for that reason but to me it seems a bit strange that they woke up this morning and decided to go through Tauranga rather than through Auckland," he said.

Following Fonterra's decision, Gibson said he had told the union that the company had made its final offer.

The offer included a 10 per cent rise on hourly rates, performance bonuses of up to 20 per cent on hourly rates, and the retention of existing benefits and entitlements in return for a new roster system that will provide increased flexibility.

Over Christmas, the company supported more than 500 truck moves during strike action using non-union staff, managers and supervisors.

Maersk announced last month that it was switching its Southern Star container service from Auckland to Tauranga. It said industrial action at Auckland had played a part in the decision. The loss of the Maersk service amounts to nearly $20 million in annual revenue.

Ports of Auckland's on-dock empty container depot, multi-cargo wharves, cruise business, vehicle import trade, marine services, Onehunga seaport, Wiri Inland Port and Seafuels barge Awanuia are not affected by the strike action.

Ports of Auckland, which delisted from the NZX in 2005, is now wholly owned by the Auckland Council.

SHIFTING FORTUNES

$27m

value of Fonterra's shipments though Ports of Auckland a week

$100,000

what the shipments are worth to Ports of Auckland a week

$2.82m

lost in revenue to Ports of Auckland so far from industrial action

- APNZ

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