Regional ports at mercy of Fonterra and shipping companies

The Maritime Union says Fonterra's decision to stop shipping containerized exports through Port Taranaki and Port Timaru was an example of how entire regional economies within New Zealand were being disrupted. The recent announcement by Fonterra means the loss of 25,000 boxes of cargo to Port Taranaki in New Plymouth, and the loss of 24,000 boxes to Port Timaru annually. Maritime Union General Secretary Trevor Hanson says the "overnight decisions" by Fonterra and major shipping companies are harming regional communities and regional ports through a process of "destructive competition" where ports experienced major and unpredictable changes in shipments.

The Mari­time Uni­on says Fonter­ra’s decision to stop ship­ping con­tain­er­ized exports through Port Tarana­ki and Port Timaru was an example of how entire region­al eco­nom­ies with­in New Zea­l­and were being dis­rup­ted.

The recent announce­ment by Fonterra means the loss of 25,000 boxes of cargo to Port Tarana­ki in New Ply­mouth, and the loss of 24,000 boxes to Port Timaru annu­ally.

Mari­time Uni­on Gen­er­al Sec­ret­ary Tre­vor Han­son says the “overnight decisions” by Fonterra and major ship­ping com­pan­ies are harm­ing region­al com­munit­ies and region­al ports through a pro­cess of “destruct­ive com­pet­i­tion” where ports exper­i­enced major and unpre­dict­able changes in ship­ments.

“We have a situ­ation where a major pro­du­cer Fonterra and glob­al ship­ping lines are work­ing togeth­er for their own interests, but their decisions are wreak­ing hav­oc on ports and port com­munit­ies which are sub­sid­iz­ing the profits of these con­glom­er­ates.”

Mr Han­son says the losers in the game are New Zea­l­and ports, which were driv­en by short-sighted paro­chi­al com­pet­i­tion and were played off against one anoth­er.

“It is a crazy situ­ation. There needs to be over­sight and reg­u­la­tion so we have a planned port industry that has sta­bil­ity rather than the massive waste of resources that goes into duplic­at­ing infra­struc­ture and machinery for the sake of destruct­ive com­pet­i­tion, and the instabil­ity that it cre­ates for skilled employ­ment in New Zea­l­and ports.”

He says the Uni­on is arguing for a “Kiwi­Port” concept, where ports were integ­rated and nation­ally co-ordin­ated with a level of pub­lic own­er­ship.

“Ports are New Zeal­and’s trad­ing con­nec­tion with the world, and as essen­tial nation­al infra­struc­ture they are far too import­ant to be left open to the short-term manip­u­la­tions of private cor­por­a­tions.”

Mr Han­son says the big catch cry in the industry for the last 15 years is that smal­ler region­al ports will work with major hub ports to gain effi­cien­cies.

“The recent announce­ment is a com­plete change of dir­ec­tion.”

He says Port Tarana­ki and the Port of Timaru are close to pro­duc­tion areas, where­as goods would now be sent hun­dreds of kilo­metres away by rail.

“The cost to the Port Tarana­ki is hor­rendous. This port when it was advised of the intro­duc­tion of “4100 type” con­tain­er ships to New Zea­l­and went ahead and expen­ded $20 mil­lion to deep­en the port in order to accom­mod­ate these ves­sels.”

Mr Han­son says since port reform in the late 1980s, suc­cess­ive Gov­ern­ments have had a “hands off” approach to ports which has led to an unstable industry.

“There are heavy reper­cus­sions for the regions of New Zea­l­and. Ports are sur­roun­ded by infra­struc­ture that require the ser­vices of ports, ports have inves­ted heav­ily in plant and port modi­fic­a­tions to ser­vice con­tain­er exports from their region, and busi­ness decisions in the regions are made on the basis of both these ports in full oper­a­tion­al mode.”

But when com­pan­ies that had vir­tu­al mono­pol­ies on ship­ments made overnight decisions that could “rip the guts” out of ports, it was impossible to run a ration­al long-term industry.

Mr Han­son says because of the dom­in­ant pos­i­tion of a com­pany like Fonterra, it was immune to cri­ti­cism as it could lit­er­ally hold ports to ransom.

“What we are see­ing is the destruct­ive ration­al­isa­tion of New Zea­l­and ports regard­less of nation­al interest, secure jobs, eco­nom­ic devel­op­ment and stable region­al com­munit­ies, to suit glob­al ship­ping com­pan­ies and the short term interests of a dairy con­glom­er­ate.”

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The Mari­time Uni­on of New Zea­l­and was formed in 2002 when the New Zea­l­and Water­front Work­ers’ Uni­on and the New Zea­l­and Sea­farers’ Uni­on joined togeth­er. We rep­res­ent water­front work­ers, sea­farers and related work­ers in New Zea­l­and.

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