Bigger ships create opportunities and risks for New Zealand

Larger international container ships visiting New Zealand create both opportunities and risks, a Ministry of Transport study launched today says.

The finding is one of a number of insights from the Ministry of Transport’s Future Freight Scenarios Study, which was commissioned to provide impartial information to help the freight sector plan effectively for increasing numbers of larger ships visiting New Zealand.

“The study shows that more big ships coming to our shores will reduce the cost of international transport, but these savings are likely be outweighed by higher domestic transport costs, particularly for exporters and importers far away from ports able to handle the larger ships,” says Nick Brown, General Manager Aviation and Maritime.

“This further highlights the importance of existing Government and private sector initiatives to lower domestic freight costs.”

Mr Brown says larger ships coming to New Zealand will only be an advantage if the private sector and Government continue to take action to lower domestic freight costs and increase efficiency in the port and shipping sectors.

“The Government has a role in providing land transport capability and regulation that help to reduce domestic freight costs. Our investments to improve road and rail links to ports, through the Roads of National Significance programme and the KiwiRail Turnaround Plan, are examples of this. The introduction of a permitting regime for high productivity motor vehicles is also an important contribution.”

Inland port and intermodal logistics hub developments — which provide a way of consolidating cargo and moving it cost-efficiently to and from container ports — are other encouraging developments.

“The international trend towards larger ships will change New Zealand’s port sector and the wider freight system.

“An efficient port and shipping sector is vital to New Zealand, as 99 percent of our freight by volume is carried by sea. New Zealand’s international sea freight costs are 21 percent higher than Australia, and while the introduction of bigger ships will help to reduce costs, it is important we also address domestic transport costs,” says Mr Brown.

The study provides a national perspective of the impact different decisions in the shipping and port sectors could have on the freight system and New Zealand’s economy. It does this by modelling ten possible future scenarios, to draw a picture of different futures in the port and freight sector, depending on different decisions made by the sector.

Mr Brown encourages the sector to consider the study and use its results.

“The study provides valuable information to inform decision making and debate on issues that will shape the future of New Zealand’s freight system. The Ministry looks forward to working collaboratively with the sector to shape New Zealand’s freight future in a positive way.”

For more information see the Ministry’s website:

www.transport.govt.nz/research/future-freight-scenarios-study/

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