Daily Archives: May 16, 2011

Port Otago downgraded to regional status only

UPDATED

### ODT Online Tue, 17 May 2011
Maersk to drop weekly service to Australia
By Simon Hartley
Shipping giant Maersk, Port Otago’s largest customer, is dropping its weekly direct Southern Star transtasman service to Australia, the country’s largest trading partner. While the financial ramifications for Otago exporters are unclear, Port Otago will lose 10%, or about 22,000 TEUs (twenty foot equivalent container units), during the next year.
Read more

(16 May) News of Port of Otago’s downgrade filtered through on (Black) Friday.

It has yet to hit Otago Daily Times’ reporting with any force . . . we might get some analysis if we’re lucky, or interested.

Maersk. Fonterra.
Two cosy words that when read together spell no accident.

It’s been in the offing. Maersk has pulled the rugs on a number of New Zealand ports, Otago included – no doubt to ratchet lower port charges, not merely to facilitate freighting of New Zealand exports into Asia.

It’s far from clear what the costs of reducing local ports of call (in favour of long distance trucking and rail freighting to the North Island’s port of Tauranga) will be for exporters in the Otago Southland region.

We noticed, with suspicion, it was Lyttelton that walked away from a merger with Port Otago. We knew it wasn’t all down to [pretext] #eqnz.

We note too – sadly, for the regional economy – that Otago is frightfully good at exporting raw, not processed, logs. Such a very happy picture we have left of what POL is good for, apart from calls by oil boats and cruise liners.

We lost transhipping with no warning. Wonder if ORC is ruffled or upset. Who knew.

ODT has hidden or failed to surface with the implications of the Maersk decision, preferring to run a diatribe about KiwiRail and “inland ports” for Otago. It’s not as if the subjects are not connected. We expect the local newspaper to make the major news statements and connections palpable, in a timely manner.

A whole weekend has elapsed. Further, Maersk’s decision is in no way surprising, there was ample time for ODT to research the background.

Clues. Fonterra has been using POL logistics to prototype and determine how inland ports can be rolled out across New Zealand.

Worries. Port Otago has been on an export ‘growth wave’, not of its own making, for some years. Does the port board know how to create growth of its own or diversify its activities to meet the challenge dumped on it by (cosy) Maersk and Fonterra?

Did the port company properly attend to risk management before Black Friday?

(Aside) POL chief executive Geoff Plunket reiterates – as we learned from POL’s Peter Brown a few years ago – the company is of the view that State Highway 88 (Dunedin to Port Chalmers) has sufficient capacity to take all trucking freight. Public safety didn’t come into the equation then, and it doesn’t appear to now. But how many trucks won’t be using SH88 at all in the near future.

Lots to think about. Investigation required. News media, DCC, EDU, ORC, Otago Chamber, POL, exporters, port workers, unions, KiwiRail . . . it’s your time to start digging.

****

Friday 13 May
nzherald.co.nz Maersk changes to benefit NZ exporters
voxy.co.nz Maersk Line NZ Strengthens Links With Key Regional Hub Ports

Monday 16 May
odt.co.nz KiwiRail backs inland ports

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Related Posts and Comments:
21.2.10 So where’s the media explosion?
26.2.10 Port Otago: “Next generation” project
27.3.10 Why should Port Otago dredge?
21.4.10 SH88 realignment
21.7.10 SH88 realignment – update

Posted by Elizabeth Kerr

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