NZ shipping risks dependence on Oz

Local shipping industry advocate Rod Grout is leaving Pacifica Shipping with a warning for policymakers that New Zealand needs to maintain its infrastructure and not become a feeder to Australian hub ports.

The large international shipping lines could say, "We're now hubbing in Sydney, please make sure you arrange to get your cargo to that port'," Grout said.

This would leave New Zealand exporters in a risky position.

The debate about whether Tauranga, Auckland, Lyttelton or Dunedin could become hub ports was "small fry" compared with the bigger picture.

"If we carry on doing it willy nilly as we are, the chances are Australia will have as much say as anything else."

Grout said New Zealand needed to have an overview of its infrastructure.

"People tend to take a hands-off approach and let the market dictate. The market could easily dictate Sydney or Melbourne."

Grout has been a long-time champion of coastal shipping in New Zealand. He has been chief executive of Pacifica Shipping for 25 years and will continue as a consultant to the company's owner, Skeggs Group, on his departure.

Pacifica survived changes that destroyed most local shipping, such as a move to allow international ships to carry goods from port to port within New Zealand. Many countries restrict international shipping lines from operating domestically, known as cabotage, to protect their local shipping infrastructure.

Pacifica runs the Spirit of Endurance on an East Coast service and Spirit of Resolution on a West Coast service.

"When you allow international shipping lines to take their share of domestic cargo they'll pick the eyes out of it," Grout said.

Governments in New Zealand had deregulated local shipping and were not going to change it.

"We have to live with it."

Grout said local shipping companies competed against road transport and rail and the taxpayer had to be aware of the subsidies to them.

"Every country needs its transport infrastructure and we need a balance of rail, road and sea and air. At the moment the balance is to road and rail because they are heavily subsidised and shipping isn't subsidised," he said.

The bigger picture was that international shipping lines were looking at how they did things in the wake of the global economic downturn.

The outcome could be that New Zealand becomes a feeder to Australian distribution centres.

"New Zealand has to set up its own distribution centre, its own hub, just like companies do."

Grout retires at the end of the month and will continue as a director of Skeggs.

He was president of the New Zealand Shipping Federation for 12 years until 2008.

"Despite the present Government's apathy towards domestic shipping," he said, "I see companies like Pacifica playing a significant role in New Zealand's economic prospects in the years ahead."

- NZPA