Help small ports to exit business, says report

Transport Minister Steven Joyce. Photo / Rotorua Daily Post

A report on the future direction of the sea-freight industry suggests the Government should be able to help smaller ports that want to exit the business.

That could include reducing exit costs associated with the Resource Management Act and perhaps even help in redundancies, the report, prepared for the Ministry of Transport by the New Zealand Institute of Economic Research (NZIER), said.

Once shut, guarantees should be sought to ensure the ports stayed shut. Ports adopted an approach that defended market share at all costs, the report, made public yesterday, said.

"Ship operators are all too well aware of this and have used these fears to good effect in negotiating new schedules with ports."

For smaller ports, losing ship operators did have a major impact on activities, and that was part of the risk taken for owning a port.

For bigger ports the long-term solution was to involve more commercial operations. That did not mean local government should sell ports and facilities, but it did mean local politicians should have less say in running ports.

A possible option was to adopt the Australian model, which would require port companies to become landlord ports and allow competition between stevedores for both the break bulk and containerised trades.

Despite issues with the shape of the sea freight industry, NZIER concluded three alternative scenarios it investigated were all marginally less beneficial to the economy than the "direction of travel" it thinks the sea freight sector will take during the next 20 years.

Transport Minister Steven Joyce said the report proposed the best approach for Government is to leave final decisions in the hands of shippers and let ports react to those with their own investment decisions. That was consistent with the Government's view.

"Attempts to pre-empt future likely market developments are unlikely to produce better results for the economy.

"The best role for Government is to ensure the right price signals are in place and land-based infrastructure such as roads and rail can meet the needs of the freight industry as it evolves."

The alternative scenarios, put together under direction of the Ministry of Transport, includes hubbing of New Zealand export and import containers through Australian ports.

Another is a two-port strategy involving the development of one large port in the North Island and one in the South Island for container traffic, with the third being a reduction in ship operators willing to service this country.

- NZPA