Dire Strait is an investigative series on how our inter-island ferries came to be in such a state of disrepair - and how the situation can be fixed.
As freight movers join frustrated travellers in baying for blood over continuing disruption to Cook Strait ferry services, Interislander service operator KiwiRail says it can’t fast-track delivery of its new ferries and it’s hard to find second-hand vessels at short notice.
In response to questions from the Herald about what it is doing to counter the breakdown issues plaguing its ageing ferry fleet, the state-owned enterprise said there was no opportunity to get its $550 million order for two new vessels delivered from South Korea ahead of the scheduled dates of 2025 and 2026.
“It is not possible to obtain other new ferries earlier than 2025. There is a limited market of suitable ships for our route, and it is difficult to source appropriate second-hand freight and passenger ferries at short notice,” the company said.
The other Cook Strait ferry operator, Bluebridge, also last month experienced a mechanical problem with its newest vessel Connemara, but says its service is now operating normally again with two ferries.
Connemara was recently purchased to expand capacity and to fill a gap while the Bluebridge vessel, Strait Feronia, is in drydock for maintenance. Bluebridge is owned by the private company StraitNZ. One of its ferries currently plying Cook Strait, Straitsman, has been sold to a Channel Islands ferry operator. It’s not yet known when it will leave the service, but Bluebridge says when Strait Feronia comes out of drydock, it will, alongside Connemara, offer a seven-day-a-week crossing service.
Meanwhile, the $25 billion New Zealand freight and logistics industry is also feeling the frustration of the ferry cancellations and delays that have driven passengers to complain to watchdog Consumer NZ. The consumer advocate has in turn asked the Commerce Commission to investigate the recent practices of both ferry operators.
Nick Leggett, chief executive of road transport industry advocate Transporting New Zealand, said for his sector, Cook Strait was an extension of State Highway 1. Any delays getting across it had a big impact, particularly for food and perishable goods and livestock transport.
While it was “useful” that KiwiRail had put on extra services by its leased freight vessel Valentine, any time a truck was stuck in Picton for hours, that added to freight costs and schedule delays. It meant challenges for drivers in finding refrigeration space or plug-in points for their chillers, said Leggett, whose group represents 1200 road freight companies.
“We have a fragile supply chain anyway. What’s happening with the ferries is a symptom of that fragility. It’s another unnecessary time delay and cost increase on the movement of freight.”
Leggett suspects KiwiRail’s two new ferries are “probably half a decade away, given the slowness of getting anything done in the world today” and has called on the Government, as KiwiRail’s shareholder, to get involved.
“Tourists are coming back and they want to travel between the islands. So there will be continuing dissatisfaction, which will ultimately put pressure on the Government to really shake the tree.
”Yes, we need immediate communication of a delay, but what about the next three months? We would like to see a plan. What are they doing to rectify the issue over the next three months, what’s the plan, who’s in charge of it and what’s the resource required, and can you let us know along the way?”
KiwiRail responded it was putting in place “an amended master timetable and adjusting crewing across the fleet for the next two weeks”. This was to maximise the number of passengers and freight sailings across its working Aratere, Kaiarahi and freight-only Valentine vessels, it said.
Rachel Madden, president of the Customs Brokers and Freight Forwarders’ Federation, agrees the ferry disruption amplifies “how fragile the supply chain is”. Freight forwarders handle logistics for importers and exporters.
Madden said the Cook Strait ferry issue highlighted New Zealand’s under-investment in supply chain infrastructure.
“Here we are in 2023 with main supply chain truck routes heavily impacted that will take time to fix due to recent weather events. We are then more reliant on other means of transport around the country, only to find we have a compounding issue with Cook Strait ... on top of this we have significant rail track repairs being done and ports with their known issues.”
NZX-listed transport companies Mainfreight and Freightways are frustrated.
Freightways chief executive Mark Troughear said the company relied heavily on the ferries “to move significant volume, mainly via our Parceline and Big Chill services”.
Parceline is an express courier service, and Big Chill Distribution operated a fleet of more than 200 temperature-controlled trucks and trailers moving time-critical chilled and frozen goods, he said.
Between the two services, Freightways moved 25-plus trucks a day each way on Cook Strait ferries.
Cancellations “play absolute havoc” with networks, already challenged by the impacts of Cyclone Gabrielle in Napier, Gisborne, Northland and the Coromandel, Troughear said.
Don Braid, managing director of global logistics company Mainfreight, said the issues with the ferries were “extremely frustrating” for his team, customers and, probably, KiwiRail.
“The sooner a fix is found, the better. The arrival of the replacement ferries cannot come soon enough.”
KiwiRail said the volume of freight carried to date this year was in line with forecasts and higher than previous years, “though there have been some delays in its passage”.
It said the cost of the disruptions was commercially sensitive.
KiwiRail said there was “no one root cause” for the problems. The ships were nearing the end of their useful lives, and the company was focused on their safe and reliable operation as it awaited delivery of the two new, much bigger, hybrid diesel-electric ferries.
“Safety is our top priority, and we will not sail ships unless we are satisfied it is safe to do so.”
Chris Edwards, owner of freight forwarder Go Logistics, said cyclone damage to Hawke’s Bay and Gisborne roads was causing more freight backlogs than the Cook Strait ferry problems.
“That’s in part because we have the Bluebridge service and because trucking companies have got very good at communications, unlike the old days. They tell us well in advance of delays and issues so we know about it, and so does the client.”
To get around Cook Strait crossing problems, Go Logistics would often bring cargo into Auckland then send it by coastal shipping to Lyttelton port.
Directing other vessels to Lyttelton also helped.
“Most trucking companies have a variety of options, so it’s just part of the landscape for us.”
The change may add $25m annually to costs during a cost-of-living crisis.