Sole big-ship capable hub floated

A shipping report modelled 10 possible scenarios, one of which was Port of Tauranga becoming the country's sole big ship capable hub.

New Zealand shippers were not consulted on the Future Freight Scenarios Study, released by the Ministry of Transport earlier this month, until after it had been finalised, says Mike Knowles, chairman of the New Zealand Shippers' Council Inc.

The report, carried out by Deloitte, modelled 10 possible scenarios, one of which was Port of Tauranga becoming the country's sole big ship capable hub, which the study said would result in the highest operating costs for the country's freight services.

"Even though larger vessels with higher utilisation have been assumed in this scenario, these benefits do not offset the higher domestic transport costs," says the study, which does not advocate any one scenario. The benefit-cost ratio for Tauranga as a single hub was the worst of the options.

"We didn't have any input into the report," said Mr Knowles, who is also shipping manager for one of the country's major exporters, Tauranga-based Zespri.

"Obviously it would have been better if we had been consulted earlier on in the process."

The study had looked at "extreme" scenarios, he said, adding that The NZ Shippers' Council's own 2010 report, A Question of Bigger Ships, had envisaged all four of New Zealand's major ports becoming big-ship capable.

"If Tauranga was the only big ship capable port in New Zealand, well of course costs would go up dramatically because everything would have to be moved to Tauranga. But having one massive superport was not envisaged by the Shippers Council at all and is very unlikely to happen."

Port of Tauranga chief executive Mark Cairns said he was not able to comment on the study as the Port CEO Group had agreed on a joint statement.

The Port CEO Group statement said all export ports would over time handle larger ships than was presently the case, but only some ports would have the largest ships servicing New Zealand.

They also pointed out that although non-container export freight weighed substantially more than container freight, it had been excluded from the study.

"How it all plays out involves far too many variables for anyone to model outcomes with accuracy," the group said.

"There are always tradeoffs between price and service, which only the market can resolve."

The Ministry of Transport said the study showed that more big ships coming to New Zealand would reduce the cost of international transport.

"But these savings are likely be outweighed by higher domestic transport costs, particularly for exporters and importers far away from ports able to handle the larger ships," said Nick Brown, general manager aviation and maritime.