The vulnerability of New Zealand’s trade ties has been exposed over the past year as continued supply chain congestion and rising freight costs continue to hurt the economy, said National Secretary of the Maritime Union Craig Harrison.
Earlier this week, Mainfreight chief executive Don Braid said shipping companies had ‘taken advantage’ of the chaos caused by Covid-19 with rates skyrocketing.
Shipping companies have defended their record.
But Harrison agreed with Mainfreight’s complaint. “New Zealand depends on global shipping companies whose interests are not the same as New Zealand’s,” he said.
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Mainfreight has chartered vessels to transport cargo internationally and meet demand, which it had not done before. Harrison said the move signals a shift in mindset in response to a failing global logistics system.
“Now we need to focus on new solutions that provide security and reliability,” he said.
Power services between the main hub ports and the smaller ports were one way to do this, he said. While international ships could carry inland cargo between local ports, they lacked stopovers due to other priorities.
“The only people profiting from the current chaos are the global shipping companies,” he said.
Braid said shipping companies should think about long-term profit. “It’s easy to eat into the market in the short term, but it doesn’t gain too much loyalty. “
It was clear that shipping companies were making up for the low returns they were getting before Covid, he said.
While their operating costs have undoubtedly increased, a more responsible approach needs to be taken, he said.
Maersk Oceania market chief My Therese Blank responded by saying that he had seen a significant increase in demand for container transport over the past six months, coupled with disruptions caused by congestion at global ports and industrial action in Australia, which had an impact on his working hours.
Ships had been waiting 12 days to dock at Auckland’s ports earlier this year, increasing round-trip sailing times from 35 days to 47 days, she said.
“It’s the same as someone who has to pay 100% for a warehouse but can only use 66% of the space,” she said.
“We still have to cover the cost of the ships.
“Likewise, our container turnaround time is increasing due to schedule delays which are the main cause of the shortage of empty containers, in addition to increasing demand,” she said.
Blank said Maersk responded by adding a seventh vessel to its Southern Star service, introducing an inshore transport service to better distribute empty containers in New Zealand ports and deploying additional vessels on an “ad hoc basis.” to minimize disruption.
Maersk’s operating costs increased due to the investments and the fact that ships sailed at a faster speed and redirected them to meet demand, which increased fuel bills, she said. .
“While we understand the challenge for the industry in these unprecedented times, shipping costs remain below 1% of the global value of goods,” she said.
Harrison said a ports strategy designed to meet national requirements, rather than continued parochial competition between ports, was needed.
But Braid said it was time to act, not to talk more.
There had been enough work on port strategies over the years and now it was time to move something forward, he said, calling it “crazy” to have 13 ports with container cranes in operation. compete with each other.
Long-term strategic planning was sacrificed in the three-year electoral cycle and longer-term thinking was needed on the part of the government, he said.
Transport Minister Michael Wood said a number of agencies are looking at supply chain congestion and the Transport Department is helping coordinate the work through an interagency group.
Wood had also asked the ministry to start work on a national freight and supply chain strategy with supply chain resilience as a key goal. He would identify challenges and opportunities, including in the cabotage sector, he said.
“I expect this work to start in the second half of this year and take around 18 months.”
The Ministry also supported the Transport Agency in the search for investment opportunities through its category of cabotage activities. A report was expected in the coming months, he said.