CentrePort eyes further hub expansion

CentrePort's container terminal in Wellington, viewed from Khandalah. Photo / Mark Mitchell

CentrePort says it has a further three potential freight hubs at the concept stage but is focused on completing the expansion of its Waingawa log yard first.

Freight hubs the firm has established in Taranaki, Whanganui, Palmerston North, Wairarapa and Marlborough were key in the firm's increasing tonnages prior to the damage the Wellington port incurred in the 2016 Kaikoura earthquake.

Post-repairs, container volumes are again picking up and the firm is expecting log volumes to be up to 2 million tonnes this year, from about 1.7 million in the June year just ended.

Commercial general manager Andrew Locke says the port's initial focus is the expansion underway at Waingawa.

Daily log loads from the yard south of Masterton earlier this month climbed to 45 wagons from 30. About $3.5 million is being spent to roughly double the space and upgrade the facility with the aim of lifting daily log movements to 58-60 wagons from March.

"That's our priority focus," Locke told BusinessDesk.

He said Waingawa and the Whanganui facility the firm operates with Ali Arc Logistics – and the Metroport facility Port of Tauranga established in South Auckland back in 1999 - demonstrate how effective hubs can be at aggregating freight for long-distance delivery.

Rather than being about ports competing with each other, he said they are now more about competing supply chains and offer shippers, importers and exporters greater choice and more efficient services.

"They're good for the environment and they're good for the freight scene," he said. "I think they're very good for the local communities. They are good investments that bring capacity to places that may not have it otherwise."

Locke wouldn't detail the sites CentrePort is considering for future hubs.

The firms uses a container terminal site in Palmerston North – where KiwiRail is planning a new $40 million freight centre - and also has its own land there.

The company has also looked at additional hub sites in Wairarapa, but to date, discussions with exporters suggest further investment is better put into Waingawa, Locke said.

The upper South Island also still has "scope for growth there," he said.

Hubs need good rail links but must also be able to cater for the local freight available, be that logs or refrigerated containers.

Locke said CentrePort has customers willing to participate in new hubs, which are most likely to be developed through the CentreRail initiative it started with KiwiRail in 2013.

He said rail is of strategic importance to the country's "freight future" and it's good to see the government investing in new services.

But he noted the lead time for new rolling stock, locomotives and other investment needed to support new services, is several years.