Small container ships expected to keep servicing small NZ ports
The abundant global supply of small container ships is likely to mean they will continue to service a range of smaller New Zealand ports "for the foreseeable future", the chairman of Bluff-based Southport, Rex Chapman, told shareholders at the company's annual meeting today.
Reflecting on the pressure being placed on shipping company economics by the proliferation of very large container vessels, capable of carrying between 12,000 and 19,000 containers, Chapman said smaller vessels were being displaced on major trade routes and that current "all-time low box rates cannot be sustained."
"It appears inevitable that this scenario will lead to further shipping line failures, the scrapping of ships before the end of their productive life and further consolidation of shipping lines and/or services.
"Vessels in the 4500 TEU (20ft container) class service the New Zealand market and the abundance of these vessels is likely to mean, in the medium term, the larger-sized container vessels will not call at New Zealand ports or will do so less frequently.
"This is likely to mean that for the foreseeable future there will be a continuation of international container shipping calls at a range of New Zealand ports, including South Port.
"Given the relatively small size of New Zealand ports, collaboration between ports who are not in competition with each other will increase and that is a very welcome trend, especially for smaller ports like ours."
The port opened its new, $4.5 million intermodal freight centre in Invercargill last month, targeting containerised imports and is "port and transport operator neutral" and accessible by Port Chalmers and Port of Lyttelton by rail.
South Port shares fell 0.7% to $6.10 and are down 39% this year, despite announcing a 13% increase in net profit for the year to June 30 to $8.7 million. Cargo and revenue increases both clocked in at 7%. The company is warning increased maintenance costs will have an impact on earnings in the current financial year, reducing profit by around 15%.
The port expects its main export cargoes to remain stable, while fertiliser and stock food imports "may be constrained by the dairy sector, which is recovering."