Chief executive Jason Te Brake says around 95% of Zespri’s New Zealand fruit is exported through the Port of Tauranga. Photo / Alan Gibson
By Monique Steele of RNZ
Kiwifruit orchards are humming mid-harvest, but Zespri is concerned that port bottlenecks are becoming a real pressure point for its fruit exports.
The Port of Tauranga is the critical gateway for most of New Zealand’s lucrative kiwifruit from growing hub Bay of Plenty to the world.
Orchardists were expected to produce around 220 million trays of fruit – equating to around 6.6 billion pieces of fruit – for export this season.
Zespri chief executive Jason Te Brake said plans to double those exports in the next decade would depend on efficient ports, freight connections and well-functioning road infrastructure.
“Port bottlenecks are becoming a real pressure point for the kiwifruit industry,” Te Brake said.
“Around 95% of Zespri’s New Zealand fruit is exported through the Port of Tauranga, so congestion or capacity constraints directly affect our ability to get fruit to market on time, protect quality and deliver strong returns to growers.”
Te Brake said constrained transport and port networks increased costs, emissions and undermined confidence for investors.
“With around 80% of our fruit grown in the Bay of Plenty, continued investment in road and port infrastructure is critical – including upgrading access through the Mount Maunganui industrial area via the Connecting Mount Maunganui project, improving productivity and resilience for freight movements to and from the port, and delivering additional port capacity to support future growth.”
Port of Tauranga chief executive Leonard Sampson said while there was no bottleneck as such at present, because product was moving through, its container terminal was particularly constrained.
“We’re at capacity at the moment and, unfortunately, we’re unable to take any further container vessels at the container terminal, so that really is a potential bottleneck for the kiwifruit industry.”
Sampson said it had known about the kiwifruit industry’s growth ambitions for years, and was committed to growing its services.
“At the moment, we’re getting it through on the services that we have but, ultimately, with the aspirations of Zespri and the potential doubling of that cargo over the next 10 years, it could mean exactly that; fruit loss, delays in terms of getting that refrigerated cargo away.
“And ultimately, it potentially makes a number of orchards or that growth unviable, because there’s simply just not that capacity to get the cargo away.”
Sampson said infrastructural constraints meant it had to decline an international shipping line recently, despite the benefits, such as greater competition and more shipping availability, it would have provided.
He declined to comment on the name of the company.
“We have a situation where we’ve unfortunately had to turn away an international service to a new market,” he said.
“That international service offered somewhere between $70-90 million of ocean freight savings back to New Zealand’s importers and exporters.
“That’s obviously revenue that would have otherwise been back in the New Zealand economy, but unfortunately, we’re unable to realise it.”
The port was about seven years into trying to secure consent for its Stella Passage berth and wharf extension, currently still under consideration for a second fast-track application.
Sampson said it re-applied for a fast-track approval for the project, because the constrained nature of the port was costing exporters and importers.
Among opposition to the project was local iwi Ngāti Kuku, supported by Ngā Hapū o Ngā Moutere, due to proposed dredging, land reclamation and other issues.
“Port of Tauranga has been unable to reach agreement with opposing iwi and hapū parties on the appropriate level of mitigation for the cultural impacts of the development,” the port said in an earlier statement.
The Environmental Protection Authority had appointed an expert panel to consider the new fast-track application, with a decision due in September.
In light of the fuel crisis, brought on by the US-Israel war in the Persian Gulf, leaders from the port joined Prime Minister Christopher Luxon in Singapore recently on his fuel security mission.
Sampson said export cargo ships were arriving on time and with little disruption, despite the fuel situation, though he said shipping services had increased their costs.
“It’s pleasing that ... at this point in time, we haven’t seen any deterioration of shipping services.
“So there’s been no reduction in the shipping services coming to New Zealand, nor a deterioration in the on-time performance.
“In fact, it’s better than it was this time last year.”
Sampson said last month’s Cyclone Vaianu caused more disruption to the port recently than the impact of fuel.
But he said the fuel situation had led to a slowdown in some commodity exports.
“We are starting to see from a cost perspective, however, that some of the cost of fuel flowing through to the shipping prices, we are seeing a slowdown in some commodities, particularly the likes of some of the forestry commodities.”
He said around 30% of New Zealand’s export logs went through the Bay of Plenty port, as well as many pulp and paper products from nearby North Island forests and mills.
“It’s a challenge, and unfortunately, I guess it’s one of those commodities – unlike kiwifruit that will need to be picked and sent – the trees can potentially not get harvested, and they can be delayed for a period of time before they need to be harvested, and wait for commodity prices to improve.”
Sampson said half of all New Zealand’s containerised exports went through the Port of Tauranga, and it was a busy period for red meat exports at the moment.
“We’re seeing strong volumes of red meat going through the port at the moment.”
He said a number of meat containers were sent back and re-shipped at the start of the war, but most found connections to the Middle East on other shipping services via North or Southeast Asia.
“But you know, that does obviously come at a higher cost as well.”
Te Brake said Zespri strongly supported the Western Bay of Plenty Regional Deal application, as certainty from government would be met with private capital.
- RNZ