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Home / Hawkes Bay Today

Cruise ship numbers set to bounce back

By Patrick O'Sullivan
Business editor·Hawkes Bay Today·
24 Nov, 2015 12:29 AM5 mins to read

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A full Napier Port in April resulted in cruise ship Oosterdam using tenders to deliver people ashore, a situation harming Napier Port as a cruise destination. Photo / File

A full Napier Port in April resulted in cruise ship Oosterdam using tenders to deliver people ashore, a situation harming Napier Port as a cruise destination. Photo / File

High fees and a shortage of large berths are the reasons this year's cruise season will be down on last year, says Napier Port chief executive Garth Cowie.

Speaking at a recent Institute of Directors meeting, Mr Cowie said in the current season 45 cruise ships were predicted to visit Napier, down from 56 last season, and 69 were booked for 2016/2017.

He said companies booked two years ahead and there were suggestions Napier Port was overcharging.

Pricing was realigned "but that takes two years to work through".

"I think we are starting to see some of the benefits of that in the next year - the 2016/2017 season."

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Other issues were the choice of Gisborne over Napier for ships cruising the East Coast and Napier's lack of large berths.

In April Holland America Line's 282m Oosterdam anchored in Hawke Bay and ferried passengers ashore to Ahuriri because another large liner and three large commercial ships were in port. The exclusion of more than one large cruise ship from Napier Port at any one time was "quite deliberate".

"If you look at the seasonal graph of our container volumes and overlay the cruise season, it comes in exactly the same time. January, February, March and April is the cruise season and so we absolutely do not commit the container-terminal berth in any way, shape or form."

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That left room for just one large cruise ship.

"That is an impediment because a lot of the cruise liners don't like tendering in."

He said there were up to 10 clashes a year which meant the port missed out as a result of not been able to take a second booking "even though a cruise vessel of that size is in a substantial amount of revenue for the port".

"We make no apology for that because we have a fundamental priority to exporters first."

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The ability to accommodate two large liners was on the drawing board.

He said Quantum Class cruise liners were a challenge for the region's tourism industry, arriving with 4900 passengers and about 2000 crew.

The first, the $1.4 billion 348m Ovation of the Seas, is due January 2017. This year, a Royal Caribbean International ship master and Napier Port pilots travelled to Brisbane to simulate berthing. Her visit is projected to inject nearly $850,000 into the local economy as a result of her Napier call, part of a projected $15 million into the New Zealand economy with 18 New Zealand calls.

Port positioned for future: report

Napier Port has delivered an annual report which it says highlights significant investment and positions it for future growth.

The port reported its annual operating results for the year ending September 30, 2015, which showed net profit after tax for the 12 months declined marginally to $12.9 million, down from the previous year's record result of $13.4 million. The port said the result reflects the significant investments throughout the year and the extra people employed.

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Napier Port chairman Alasdair MacLeod said: "This year's results were pleasing. With a spend of $34 million required to help build terminal capacity, we expected some impact on the bottom line. The investments made throughout the year have resulted in increased productivity.

"Trucks are being processed faster and more containers loaded per hour during the peak export season - from summer through autumn when pipfruit is exported and when demand for space is at a premium."

The port's investment for the year included the purchase and delivery of two Terex mobile harbour cranes; the commissioning of an off-port empty container depot; introducing a vehicle booking system; maintenance and capital dredging; building the port's new main office; purchasing New Zealand's first mobile harbour crane simulator; establishing a new inland port freight hub in Palmerston North; and paving the main log yard (6.5 hectares).

During the year the port also processed a record 16.5 per cent increase in container volumes, handling 256,438 TEUs (20-foot equivalent units), cementing its position as the largest port in central New Zealand and the fourth largest container terminal in New Zealand. Revenue during the year increased by 7.6 per cent to $72.1 million off the back of strong container growth.

The chief executive of Napier Port, Garth Cowie, said: "This year we processed for the first time ever more than a quarter of a million TEUs. This was achieved despite the significant loss of dairy volume due to the rearrangement of the supply chain by Fonterra.

"Against this environment of investment and growth, we also improved our health and safety performance with no lost-time injuries," Mr Cowie said.

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"This is a huge credit to all our staff.

"Looking ahead to the next financial year we expect to see an increase in apple volumes and water exports, which should help offset the further loss we expect from the dairy sector.

"We will be targeting higher crane rates and vessel rates to deliver the service outcomes our customers need and maintain our relevance."

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