Ocean freight disruption a risk for primary exporters
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.