Fonterra and Silver Fern Farms launch cargo partnership

A new freight partnership launched today by dairy giant Fonterra and meat company Silver Fern Farms expects to turn over $400 million worth of cargo next year as part of a bid to improve the country’s supply chain.

The two companies have formed a new company called Kotahi to manage the movement of cargo to and from ports.

Kotahi, which translates to “we stand as one” will be headed by former Fonterra logistics specialist Chris Greenough and will start operations on August 1.

At the launch in Auckland today, Fonterra managing director of trade and operations Gary Romano said Kotahi would provide a “catalyst” to help New Zealand businesses be more competitive in global markets.

“It’s going to make a huge difference,” he said, adding that other export companies as well as importers were welcome to join the partnership once it got going.

"Export earnings are New Zealand's bread and butter, just last year the collective return was over $40 billion. This is a great success story but as the world changes there is a real risk we will be squeezed out.

"We are the most remote developed country in the world relative to international markets and the way we get our products to and from these markets is critical to continued success."

Mr Greenhough said Kotahi’s initial focus would be on working with exporters and ocean carriers to drive greater efficiency and service enhancements in sea freight.

Silver Fern Farms chief executive Keith Cooper said exporters faced a loss of international business if ocean freight services continued to decline.

"By coordinating our freight needs we will be much more consistent in our scheduling and will be able to better utilise freight capacity going north and south, on both land and sea. This means we will be able to attract better shipping schedules and bigger ships as well as reducing our carbon footprint by getting better at using what we've already got to full capacity," Mr Cooper said.

Mr Cooper said collective volumes from the two co-operatives in the partnership would total about 175,000 Twenty foot equivalent units per annum (one TEU equals about 12 register tonnes), worth about $400 million. 

Kotahi aimed to attract shipping lines that could offer a faster service for perishable goods exporters and give more certainty around volumes.

Ports of Auckland chief executive Tony Gibson welcomed the new venture.

"We're pleased to see New Zealand cargo owners seeking to play a larger role in decisions over logistics infrastructure and sea freight services, and look forward to working with Kotahi in the future," Mr Gibson said.