Port Reform: Auck-Tauranga Alliance Could Be 3-5 Years Away
February 17th, 2010
Don’t expect any movement on consolidation of North Island ports this year. Any discussions involving Ports of Auckland will have to wait until after elections for the new super city in October. Ports of Auckland CEO Jens Madsen says Port of Tauranga is “no longer on our radar” after an approach for an amalgamation of container activities was rejected by Tauranga a year ago. He says whether a tie-up can be revisited in future remains to be seen “but perhaps in 3 to 5 years.”
Auckland and Tauranga account for 60% of NZ’s container trade and Madsen sees some sort of alliance, stripping out duplication, may help ensure NZ continues to attract shipping lines which will gradually move to larger ships and fewer ports. Madsen says the risk of an Aust port maneuvering to become the hub to NZ’s spokes “is a real one.” With ports across the Tasman spending hundreds of millions to expand and upgrade, winning business from NZ would be the “icing on the cake.”
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Pressure from shipping companies looking to stem losses by cutting costs will continue for the next few years. Alphaliner fleet projections www.alphaliner.com are for a global capacity glut to remain until 2013, with idled vessels amounting to 1.44m TEU capacity currently. Madsen says it’s a once in 20 years situation. At a container shipping conference in Sydney, he urged port shareholders to be patient and accept lower returns as companies adjust to the changing shipping sector.
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