Fonterra is urging caution ahead of any consideration of radical restructuring for New Zealand's ports. This week, the Local Government Forum, a business-led lobby group,suggested local authority ownership of most of New Zealand's ports stymied
Fonterra is urging caution ahead of any consideration of radical restructuring for New Zealand’s ports.
This week, the Local Government Forum, a business-led lobby group,suggested local authority ownership of most of New Zealand’s ports stymied their ability to improve international competitiveness and export growth.
The forum recommends rationalisation of port services, infrastructure and ownership.
It has recommended that councils should sell their shares in the port companies and the roles of landlord and stevedore should be split, as in Australia.
However, New Zealand’s biggest exporter, Fonterra said far more investigation is required.
“The whole topic needs to be thought through a bit more,” Fonterra’s supply chain strategy general manager Nigel Jones said.
The Local Government Forum report suggests the ports had considerable scope to improve efficiency.
However, Mr Jones said the concept of efficiency needed to be considered in the context of how the ports operated and their value in the total supply chain.
The report was critical of a perceived focus of ports competing with each other domestically while failing to optimise infrastructure to boost exports.
Mr Jones said rationalisation could lead to reduced competition between ports and higher costs for exporters and importers, which would ultimately be passed on to end customers anyway.
He noted that while the report was critical of an underutilisation of port equipment such as cranes, Mr Jones compared them to a formula one pit team.
He said during a three-hour race, the pit team does just a small amount of hands on work amounting to just minutes. However, the ramifications of the pit team not being there was huge in terms of winning the race.
“If the ships come in and there isn’t the capacity to cope with them, then the whole supply chain gets affected. It’s dangerous to look at crane productivity in isolation.”
Mr Jones said it could be in New Zealand’s best interest to have lower productivity in order to speed up the total supply chain.
