Freight and logistics management company Kotahi – a key partner of Fonterra – and the Port of Tauranga have struck a ten year deal that alongside others will see a big step-up in New Zealand’s international trade capability.
Kotahi chief executive Chris Greenough said Kotahi is focused on helping keep New Zealand competitive on the world stage, by paving the way for the new generation of container vessels to call in New Zealand’s waters, delivering significant efficiencies for exporters and importers.
The plans include a deal between Kotahi and shipping giant Maersk.
“New Zealand doesn’t have a big ship capable port and now is the right time for key players to work together to build a capability within New Zealand to receive these large vessels with all the efficiencies they will bring to New Zealand,” says Greenough. “These ships will ensure New Zealand does not become a spoke to the larger hubs across the Tasman, which would add 7-10 days to export transit times.
“We can help level the playing field for New Zealand in international markets. Increased collaboration will smooth out the peaks and troughs of our agriculture-driven export sector and drive a step change in efficiency for the Kiwi export supply chain. These larger vessels will also be a catalyst for further efficiencies in land-based transport and the better co-ordination of truck and rail movements,” Greenough says.
The new arrangements are founded on the following:
– Kotahi has committed to provide up to 1.8 million TEU export cargo containers to the Port of Tauranga over the next 10 years, commencing 1 August 2014;
– Kotahi has committed significant export cargo to Timaru Container Terminal (TCTS), for the next 10 years commencing 1 August 2014;
– The Port of Tauranga has committed to investment in infrastructure to enable visits from the larger 6,500 TEU container ships within the next few years;
– Port of Tauranga will, subject to certain conditions, issue shares to Kotahi and Kotahi will take a stake in TCTS; and
– Kotahi has committed to provide up to 2.5 million TEU export cargo containers to Maersk Line for the next 10 years, commencing 1 August 2014.
Port of Tauranga chief executive Mark Cairns says the agreement with Kotahi will be immediately earnings accretive for port and will ‘transform the New Zealand supply chain.’
“The cargo commitments give Port of Tauranga the certainty to proceed with the infrastructure to accommodate the 6,500 TEU ships,” says Cairns. “This will in turn spur the development of New Zealand’s coastal shipping industry as freight consolidates on Port of Tauranga as a hub port for the country.”
“Our ability to accommodate the next generation of large ships will also address New Zealand’s disadvantages in international export markets, including the country’s distance from major transport routes and its relatively small and dispersed freight volumes.
“We are looking forward to expanding our already highly-productive relationship with Kotahi and to increased visits from the Maersk Line fleet,” Cairns says.
