Meat and dairy exporters secure largest ever container ship for Asia run

The Kotahi joint venture between Fonterra Cooperative Group [NZX: FSF] and Silver Fern Farms is launching a new weekly service to Asian export markets using the largest container ship ever to call at a New Zealand port.

The service will operate through the Port of Tauranga, where a $350 million port expansion and dredging operation will allow visits by a ship capable of carrying more than twice the usual number of containers seen on cargo ships operating through New Zealand.

The new service will see ships with a capacity of 9500 TEUs – 20-foot container equivalents – calling at Tauranga on their way from the west coast of South America before heading to ports in North Asia.

The new route requires the Maersk ships to divert to New Zealand before heading to destinations in China, Japan, and Korea, among others.

The South American and New Zealand cargoes are complementary primary produce loads requiring refrigeration, which the ships to be used on the run are well-equipped to provide.

The new service will effectively replace the current Triple Star service, which has been operating a dedicated New Zealand-Asia route on a roughly fortnightly basis, and is a direct product of collaboration with Maersk under a 10-year agreement signed two years ago, Kotahi's chief executive, David Ross, told BusinessDesk.

However, cost savings are not a feature of the improved timetable, with international freight rates already delivering negative returns for much of the global shipping industry.

Instead, the new route represented an investment in a sustainable and more regular service for New Zealand exporters, said Ross. The ships were more fuel-efficient than the 2000-4500 TEU-sized vessels that commonly service New Zealand ports and would cut carbon emissions between New Zealand and Asian ports by about 22%.

However, even at 9500 TEUs, the new ships servicing Tauranga are dwarfed by container ships commonly in use on northern hemisphere routes, which are capable of carrying as many as 18,000 TEUs.

Ross said Kotahi didn't expect the route to attract any more cargo than already moves on the Triple Star service at first, although he expected it would begin to attract new sources of freight over time.

Kotahi provides export services for more than 40 companies exporting a wide range of primary and other products to some 440 ports around the globe.

(BusinessDesk)