Pressure mounts on Ports of Auckland
April 30th, 2009
NZ’s biggest container port is under pressure to show an improved financial return as owner Auckland Regional Holdings contemplates a $591.8m drop in income over the next 10 years. MD, Jens Madsen, is proposing centralising container services and stevedoring at the port company’s Fergusson terminal, with the loss of 30 jobs. This will help meet a target of $5m in cost savings over the next 12 months in the face of a slump in import volumes. “The pressure is very, very considerable. During the current economic crisis we’re not doing well enough and that needs to be addressed.”
Madsen paints a grim outlook based on feedback from the major shipping lines, which are currently idling about 10% of their fleet worldwide. The downturn has been swift. Cargo volumes which had grown 7% a year for a decade have dropped by an annualised 7% in the first quarter, led by a 10% slide in imports. The mitigating factor is more robust exports, as the upper North Island recovers from drought and volumes of perishables such as apples and pears rose. Madsen says. “We’re focused on the cost side. I can’t tell you what the world will be like in 12-18 months time.”
The ARH stymied the port’s efforts to form a container business alliance with Port of Tauranga though Madsen says he won’t rule out another approach to the rival operator. The future of the ARH itself is yet to be decided as the super-city proposal takes shape and the ARH’s ultimate master, Auckland Regional Council, is abolished. Local Government Minister, Rodney Hide, who favours asset sales, says it will be up to the new super council to decide whether it retains ownership of businesses such as the port and its Auckland Airport stake.
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