Shipping rates in New Zealand waters have become "unsustainably low" in the wake of supply chain agreements such as between Kotahi and Port of Tauranga, said South Port New Zealand chairman Rex Chapman.
He told shareholders at South Port's annual meeting in Bluff that the company's strategy is to maintain good working relationships with other ports, to take advantage of the "inevitable changes in the port sector".
"Just as Tauranga has now reached into the South Island through Timaru, it is expected that other ports will be seeking to enter into working relationships with one another in order to capture regional cargo outside of their immediate catchment area," Chapman said.
Annabel Young, executive director of the eight-member New Zealand Shipping Federation, said unsustainable rates were "a truism accepted throughout the industry" and coastal shipping "was more fragile than people realised".
Federation members faced a number of issues including competition from Kotahi, the freight venture owned by Fonterra Cooperative Group and Silver Fern Farms, and the unfair advantage of foreign operators who would marginally price their operations around the coast on vessels with foreign crews that didn't have to pay for emissions trading scheme credits on bunker fuel that were imposed on local shippers, she said.
