Coast shippers making hay after quakes
Coastal shipping trade out of Auckland nearly doubled after the North Canterbury earthquakes in November 2016.
But the big test will come at the end of the year when the Kaikoura state highway and the rail line are back in operation.
Steve Chapman, the chief executive of coastal shipping company Pacifica, estimated the increase had settled back to about 20 per cent to 25 per cent above pre-quake levels.
‘‘We’ve been able to put some freight on international ships travelling south,’’ Chapman said.
Pacifica rival, KiwiRail, was among the winners in this year’s Budget with the Government committing $450 million in capital funding, which may skew cargo movements back to rail via the interisland ferries
The commitment was critical to fund the uninsured portion of the main north line between Picton and Christchurch.
The financial effect of the earthquakes on freight forwarders may become evident when Mainfreight reports its annual results soon, against a strongly rising share price in recent weeks.
Chief executive Don Braid said Mainfreight’s mix of rail, truck and shipping was commercially sensitive.
Meanwhile, Auckland, Tauranga, Napier and Lyttelton ports are enjoying a surge in business.
Lyttelton Port’s container volumes were 15 per cent ahead in the second half of 2016 - and up 35 per cent in December 2016.
It was because freight was being sent direct via shipping from Auckland to Lyttelton after the Kaikoura railway line was knocked out, chief executive Peter Davie said.
Shipping Federation chief executive Annabel Young, said the big lesson from last year’s earthquakes was how quickly the market could move.
‘‘Overnight, the amount of freight going through Auckland almost doubled as freight forwarders looked to coastal shipping to move goods south.
‘‘Port of Tauranga couldn’t believe it. Napier Port was also a big winner because of the effects on Wellington’s container terminal. Cargo bound for Wellington has been landing at Napier and trucked south.
‘‘Napier has had to scale up operations in six months what they expected would take about seven years,’’ Young said.
Heavy reliance on trucking allowed for quick overnight movement of goods, but the earthquakes forced businesses to re-prioritise fast delivery for perishables, Young said.
Young said the future of maritime transport relied on feeder ships taking cargo from smaller ports to larger ports.
Dredging to allow deeper drafts is a waste of rate-payer money in most ports, she said.
‘‘Aggregation of cargoes at inland ports is the trend. This increases the likelihood of fewer big ports servicing international routes.
’’It also makes over-capitalised ports with high charges unattractive.’’
The latest Shipping Federation report said one of the biggest impediments to coastal shipping is lack of government interest because it owns rail and road infrastructure.
About 15 per cent of New Zealand’s inter-regional freight is carried by sea and domestic freight volumes are forecast to more than double by 2040.
Even with massive investment in land transport this increase can’t be accommodated by road and rail alone, Young said.