Early port shake-up expected

New Zealand ports could feel the shake-up from the proposed merger of heavyweight shipping lines Maersk and P&O well before Christmas.

A shipping industry source said that while Maersk, the world's biggest shipping line, would have "huge" merger issues to resolve in Europe, the United States and Asia, New Zealand's high volume reefer or refrigerated cargo market was an important business.

"Maersk may be keen to jump in quite quickly and make some pretty rapid change," the source said.

"I would expect that in the fourth quarter of this year, and the first quarter of next, it will start to make some noise.

"There will also be pressure from customers asking whether they are prepared to enter into a contract from September and October and if they will have a service. Maersk could be forced to make some early decisions."

Maersk's takeover of P&O, the world's fourth-biggest shipping line, is expected to be ratified by late August or early September.

The source said the two lines had such different operating cultures that the merger should be "interesting".

Together the shipping companies, trading in New Zealand as Maersk Sealand and P&O Nedlloyd, are estimated to carry about 80 per cent of Fonterra's ocean freight and 40 per cent of national freight. Fonterra is P&O Nedlloyd's biggest customer globally, excluding freight forwarders.

"Maersk seems to be quite regionally focused and happy to call at ports such as New Plymouth and Timaru, whereas P&O are quite the opposite. They support the hub concept," the source said.

"A lot depends on how Maersk allows P&O to operate. Maersk is also very independent, whereas P&O is very aligned and conference orientated. They are involved in quite a number of consortia."

Maersk, which calls at most New Zealand ports, could leave P&O to operate as a separate brand but that seemed unlikely given the takeover was to gain efficiencies.

The takeover has put the brakes on a decision by P&O Nedlloyd whether to concentrate its Asian and European services at the ports of Auckland or Tauranga.

Analysts believed the decision, in which Fonterra was a major influence, was in its final stages when the takeover was announced last month. P&O Nedlloyd partners with four other shipping lines on the European service, which operates 10 ships that carry 4100 containers, the biggest container ships to call here.

The source said the 4100s were high earners for P&O Nedlloyd so the contest could still be on.

"Then again, Maersk might put much bigger ships into one or two ports and create a hub concept within the country and have a regional vessel calling at a few outports and feeding to one major outport," the source said.

"They could totally change the way they do their business, it's hard to tell. Traditionally, Maersk is at the forefront of transshipment globally."

Shipping business

* Maersk's takeover of P&O, the world's fourth-biggest shipping line, is expected to be ratified by late August or early September.
* The two shipping companies are estimated to carry about 80 per cent of Fonterra's ocean freight and 40 per cent of national freight.
* Fonterra is P&O Nedlloyd's biggest customer globally, excluding freight forwarders.