Port of Tauranga's timing was perfect.
Two weeks after completing its $350 million, 10-year development programme, the first large post-panamax container ship sailed past Mauao and into the beautiful harbour.
When Maersk began its weekly Triple Star service in August last year — sending 9500 TEU (20-foot equivalent units) container ships to Tauranga — it cemented the port company's standing as NZ's international hub. Maersk was the first container line to tie Tauranga and New Zealand to its global mainline networks.
That Maersk service only calls at Tauranga and bypasses Australia, exchanging general imports and exports to and from North Asia. Port of Tauranga has the capacity to receive exports from the east coast of Australia to join the Maersk service to northern parts.
Soon after, Hamburg Sud began its weekly Apsa service to Tauranga using 7500 TEU container ships which carry a lot of the kiwifruit production, among other exports.
The turnaround in the highly-productive Tauranga port is less than 24 hours and it takes the Maersk and Hamburg Sud services 11 days to reach their North Asian gateways.
"The container ships have time sensitive cargo (from New Zealand) and the services provide unrivalled transit time to North Asia via Singapore and Malaysia," says Port of Tauranga chief executive, Mark Cairns. "The acid test is whether the services create economies of scale and clearly they do."
Cairns says it doesn't make economic sense for all New Zealand ports to invest in this (big ship) capability.
"We are seeing the consolidation of hub ports such as Tauranga where trans- shipment (transferring containers from one ship to another) is increasing at a very fast rate.
"Our productivity rates (the best in Australasia) and fast connections to Asia are also making Tauranga increasingly attractive as a hub port for Australian shippers to Asia and South America. This is much better than New Zealand becoming a branch line to Australian ports, which was the fear 10 years ago."
A decade ago Port of Tauranga, 54 per cent owned by Environment Bay of Plenty's Quayside Holdings, planned its long-term growth to become the country's leader in its sector.
The company figured rightly that the shipping lines would undergo significant rationalisation with the smaller services being replaced by the faster, more efficient larger container vessels that produce fewer carbon emissions.
Port of Tauranga had to be ready. The company extended its container wharf to berth the bigger ships, built new warehouses and other buildings at the container terminal, increased the number of its saddle carriers and doubled the number of Liebherr cranes to eight.
The new cranes generate their own electricity, fed back to other cranes or to uses in the terminal including the refrigerated stack, creating further cost savings and a lower carbon footprint. New technological advances will include automated stacking cranes.
Port of Tauranga also deepened and widened its shipping channel in the harbour — its dredging programme cost $50 million and the Maersk container ship arrived two weeks after the dredging was completed.
"We were mightily relieved when the ships began calling, and the services have been more successful than expected," Cairns says.
"The importers and exporters are enjoying economies of scale and the New Zealand Shippers' Council had estimated $300m per year savings to NZ Inc."
Port of Tauranga became the first in New Zealand to handle 1 million containers in a year and it has the capacity to triple that volume within its existing resources.
The port company owns 190 hectares, compared with Ports of Auckland's 75ha, and within that land holding Tauranga has 40ha, presently on short term rental, available for development.
"We have enormous headroom to grow," says Cairns. "And one area is receiving trans-shipments from within New Zealand — especially from the east coast ports (Napier. Wellington, Nelson, Lyttleton, Timaru, Port Otago)."
Port of Tauranga's trans-shipments have grown 86 per cent in the first quarter of the latest financial year compared with the previous corresponding period. The port company expects to welcome four or five more big container ships — "they will be anywhere between 6000 and 10,000 TEUs in size," says Cairns.
Port of Tauranga is the most integrated port in the country, owning 50 per cent of Northport in Whangarei and a similar stake in Prime Port, Timaru.
"This gives us the ability to pull more levers," says Cairns. "Container volumes have quadrupled from Timaru since August 2014 and we will receive more trans-shipments from the South Island."
Port of Tauranga also has transport and logistics covered. "We have organised long-term freight agreements with our key customers that give us the certainty to make capital investment decisions," says Cairns.
The port company has a 10-year agreement with Oji Logistics to aggregate most of its cargo, and has a similar deal with Zespri to send its large volume of New Zealand-grown kiwifruit overseas.
Port of Tauranga handles all of Fonterra's North Island dairy exports and joined Kotahi in a newly merged company Coda Group.
The port contributed its wholly-owned subsidiary Tapper Transport, a container packing and unpacking facility MetroPack and its 37.5 per cent stake in empty container repair and storage business MetroBox. Kotahi put in Dairy Transport Logistics.
"We are looking for efficiency in the domestic supply chain, connecting road, rail and coastal shipping," says Cairns.
"We see a trend of more coastal shipping from the South Island on international flag vessels and more rail in the North Island. There has been a 64 per cent increase in rail containers in the past two years and this has the lowest impact on the community. Each train covers 106 truck movements."
Asked how Port of Tauranga would react if Ports of Auckland was moved to Northport, Cairns says "well, we own 50 per cent of Northport. It makes sense to send some bulk cargo out of Whangarei, but not containers in terms of investment.
"What we really need is a fact-based study to show the origins of cargo and its movements around New Zealand. We are a small country and when we make port investments, let's have the facilities in the most logical place."