NZ Port Sector: Port rationalisation ‘still inevitable’
February 10th, 2010
Port of Tauranga CEO Mark Cairns says losses by container shipping lines ran to about $US20bn in the past 12 months, leaving “a fair bit of blood on the carpet.” He says an estimated 11.6% of the world’s total container fleet is at anchor currently and shipping lines “will be looking for further cost savings in 2010 and ensuring the most efficient supply chains.” Cairns has been a cheerleader for port rationalisation and he says it’s a key theme again this year for a small trading nation distant from markets and with “an unusually high density of ports (16) around our coast.”
Consolidation is likely to be forced by larger vessel sizes but the outcome isn’t necessary for some ports to be closed. Rather, a “hierarchy of ports” needs to develop – international container hubs, regional feeder ports, regional bulk ports. Cairns says such a hierarchy would quickly emerge “if ports simply priced and invested to achieve a cost of capital return as they have been required to do under the Port Companies Act for the last 21 years.”
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