Exporters eagerly await English’s international freight changes

Export NZ is eagerly awaiting Finance Minister Bill English's feedback on recommendations in an international freight services report.

So, too, are 98% of Export NZ members who use ships and are facing crushing operational challenges, including a high and volatile dollar.

“Part of the value of having a productivity commission issue reports and recommendations is that the recommendations are actioned,” Export NZ executive director Catherine Beard told NBR ONLINE, saying the organisation would be “supportive” of most of these.

“While the report indicated most of New Zealand’s ports are operating better than world’s best practice, every bit of improvement would benefit exporters,” she says.

The 300-page report by the Productivity Commission was given to Mr English this week and includes plans for improving sea freight efficiency, the costs of which represent about $5 billion - 2.7% of the country’s GDP.

One of the recommendations Export NZ wants to hear more on is the need for more pricing structure transparency.

The commission recommends shipping companies wishing to collaborate to fix prices or limit capacity be required to demonstrate to it that there will be a public benefit which will outweigh anti-competitive effects.

“It’s really about having some transparency in the system so we are sure we are getting the best prices, while balancing the need for shipping lines to sometimes collaborate on their routes,” Ms Beard says.

While pricing may be structured on New Zealand’s distance from market, the default mode of operation, which may have been appropriate 20 or 30 years ago, is not necessarily appropriate now.

“The default option is that you can just do it. They have to show that it is to the benefit of customers,” says Ms Beard.

Part of improving productivity and being globally competitive includes effective port models. The commission said the Port of Tauranga was a good example of how owners and customers can benefit.

The company’s mixed ownership structure and the fact that its majority owner, Bay of Plenty Regional Council, treats it as a financial asset to be managed according to commercial principles, as well as the port’s contestable business model for freight handling, had contributed to its success.

“We need international transport to be as productive and efficient as possible. Finding the most productive port models and promoting them to others is vital,” says Ms Beard.

Link to:

http://www.nbr.co.nz/article/english-give-%E2%80%9Cthorough%E2%80%9D-response-international-freight-report-mb

http://www.nbr.co.nz/article/govts-plain-stupidity-led-nz-export-crisis-checked-and-ready-mb-p-117188