Ocean freight dis­rup­tion a risk for pri­mary ex­porters

Exporter - - MAKING NEWS -

Some ex­porters from New Zealand's pri­mary sec­tor are ex­posed to po­ten­tial service dis­rup­tions as the down­turn in global ship­ping drives con­sol­i­da­tion in the in­dus­try, says David Ross, CEO of Ko­tahi, New Zealand's largest ex­port sup­ply chain col­lab­o­ra­tion.

“We're ex­pe­ri­enc­ing a global over­sup­ply of ship­ping ca­pac­ity. To­gether with low fuel costs, we're see­ing a con­tin­ued de­cline in ocean freight rates which freight own­ers are en­joy­ing, how­ever these cur­rent mar­ket con­di­tions are not sus­tain­able.

“We need to take care that con­sol­i­da­tion, cost sav­ing ini­tia­tives and co-op­er­a­tion amongst ship­ping lines doesn't de­grade the qual­ity and service lev­els for New Zealand's ex­porters and im­porters. A sig­nif­i­cant por­tion of pri­mary ex­ports such as chilled meat, pro­duce, seafood and dairy have a short shelf life and as a re­sult have a unique re­quire­ment to ac­cess ship­ping ser­vices that can of­fer fast tran­sit times to all cor­ners of the globe.”

Ko­tahi con­tin­ues to de­velop a se­cure, sus­tain­able sup­ply chain with a fo­cus on di­rect trans­port links, be­tween man­u­fac­tur­ing site and key in­ter­na­tional mar­kets, that is right for all eco­nomic mar­ket con­di­tions, he says.

“By con­sol­i­dat­ing cargo, pre­dom­i­nantly ex­port, we have the abil­ity to drive ef­fi­cien­cies and take waste out of the sup­ply chain. We're able to achieve more for our cus­tomers than what they can achieve in­di­vid­u­ally, through im­prov­ing as­set util­i­sa­tion with the flex­i­bil­ity that our cargo pool­ing gives us.”

Ross says Ko­tahi works with lo­gis­tics part­ners to build so­lu­tions that are based on cus­tomer needs, with a strong fo­cus on qual­ity fea­tures that are essen­tial for the char­ac­ter­is­tics of New Zealand pri­mary ex­porters.

“Some ex­porters and im­porters will be in­flu­enced by low freight costs and we un­der­stand this. But longert­erm, we don't want to risk low prices driv­ing out qual­ity ship­ping ser­vices that have the fea­tures essen­tial for brings sig­nif­i­cant ben­e­fits to the coun­try.”

By 2017, the Coda in­ter­modal freight hub will con­sol­i­date and move by rail, the equiv­a­lent of 8,000 heavy ve­hi­cle trips of cargo. Each year this will save over 1.5 mil­lion litres of fuel and 4,000 tonnes of car­bon emis­sions.

“The ex­pan­sion will more than triple the ca­pac­ity of the ex­ist­ing Coda rail of­fer­ing be­tween Auck­land and New Zealand's re­quire­ments.”

Ko­tahi is able to pro­vide New Zealand with a well utilised, col­lab­o­ra­tive sup­ply chain, he says. “By work­ing to­gether with lo­gis­tics part­ners in ocean freight, ports, rail, road, land­side in­fra­struc­ture and our cus­tomers, we're pro­vid­ing cer­tainty of cargo sup­ply. This has al­ready fa­cil­i­tated sig­nif­i­cant in­vest­ment in as­sets and in­fra­struc­ture across New Zealand, sup­port­ing the in­tro­duc­tion of more ef­fi­cient ‘Big Ships' in the fu­ture.” Palmer­ston North, pro­vid­ing fur­ther op­por­tu­ni­ties for lower North Is­land ex­porters to ac­cess the two main ports in the North Is­land. The site is also strate­gi­cally lo­cated to most ma­jor do­mes­tic man­u­fac­tur­ers and dis­trib­u­tors who move prod­uct around the coun­try on a daily ba­sis,” says Brown­lee.

The Coda in­ter­modal freight hub will be fully op­er­a­tional by De­cem­ber 2016.

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