The surge in exports of timber through Port of Tauranga has contributed to a jump in more profitable bulk cargo.

The situation was helping offset a decline in container volumes as Ports of Auckland won back business lost during its industrial dispute, said Forsyth Barr transport analyst Andy Bowley.

Port of Tauranga chief executive Mark Cairns said: "The port used to be just a forestry play.

"With our diversification over the last few years, we've really developed the container business."


Mr Cairns acknowledged Ports of Auckland had won back some of its container business, but said the company did not get too hung up on quarterly trends.

The higher log volumes were being driven by sustained high prices, and Mr Cairns said the favourable harvest profile and rotation in the major forestry plantations meant the outlook was positive.

Forestry contributes about 3 per cent of gross domestic product, generating export earnings of $4.7 billion per year, according to the Forest Owners Association and the Ministry for Primary Industries (MPI). The longer-term outlook for wood availability is a potential increase of 40 per cent late this decade, says MPI.

Mr Bowley said that other bulk volumes also appeared to be growing strongly, as evidenced by international trade and shipping stem data.

The other significant change had been the decline in Port of Tauranga's container numbers, which were down 13 per cent (or -26,000 TEU) in the September 2013 quarter, against the previous comparable period. Forsyth Barr said this was partly attributable to losses during Fonterra's food safety scare. But, by contrast, Ports of Auckland saw an increase of 11 per cent (or +20,000 TEU) over the same period, and Forsyth Barr expected Port of Tauranga to continue to lose container share to Auckland in 2014.

Mr Bowley said Ports of Auckland had become more efficient, reliable and consistent in its service. "This is just a function of volume that was shifted towards Tauranga through the industrial dispute, where arguably its natural home was always Auckland.

17 Jan, 2014 8:39am
3 minutes to read

"And Tauranga did very well to hold on to it for as long as they have. But now that shippers and shipping lines have become a lot more confident in Auckland, that volume is returning there.

"We would suggest we held on to a lot more volume post strike than we expected to," said Mr Cairns. "I think longer term, the things we're doing with the cargo owners are paying off."

Forsyth Barr said Port of Tauranga would continue to trade at a material premium to the market. "We expect this to continue in light of the company's high returns, longer-term growth outlook, capital management potential, strong management team, operational execution capability and conservative balance sheet."