KEY POINTS:
The decision by Danish shipping company Maersk to concentrate its northern freight activities at Ports of Auckland raises important questions about the future of transport in the top half of the North Island.
Traditionally, much of New Zealand's export and import activity has centred on Auckland, with extensive shipping, customs and trucking infrastructure.
But Maersk's decision to concentrate its activities at Auckland is clearly a profit-maximising decision by a single and major company which has a 40 per cent share of New Zealand's sea-freight market. And it is a decision that will impact on the country's transport network.
With the Auckland region home to more than 1.3 million people - 32 per cent of the country's population - it is imperative that we achieve cost-effective transport for the upper North Island, designed to reduce road congestion around Auckland city.
We cannot leave the design of a country's transport network to a handful of companies such as major exporter Fonterra and shipper Maersk, all individually seeking to maximise their own profits.
There is a clear need for parameters to be set in the public interest on behalf of all New Zealanders. The Government should outline an overview of upper North Island transport logistics linking the major ports of Whangarei, Auckland, Tauranga and New Plymouth.
This will permit cost-effective exporting and importing by our major industries into the foreseeable future by maximising co-operation between ports and rail, leading to a considerable reduction in road usage by trucks carrying containers.
Tauranga is the country's largest exporting seaport. For the year to June, exports through Tauranga totalled $7.3 billion, or 3.5 per cent of the total New Zealand production, including: dairy, $2.1 billion; kiwifruit, $600,000; meat, $900,000; and logs and wood-based products, $1.1 billion.
Continued cost-effective exporting for these major drivers of the economy is of paramount importance for the future wellbeing of all New Zealanders.
No extensive research is required to identify the major gainers in any optimal plan of future port activity in the top half of the island. Whangarei and Tauranga will become major ports with Port Taranaki possibly assuming a greater role. The Port of Tauranga has already demonstrated the feasibility of its inland port based in Onehunga (MetroPort).
For the past eight years container throughput at Tauranga has grown 21 per cent a year and is now 423,000 containers compared with 670,000 for Ports of Auckland.
Much of Tauranga's container growth is attributable to MetroPort, which could be expanded to better service the south Auckland region.
Fonterra has completed a major facility north of Hamilton. Increased exports from Waikato and Taranaki, together with exports from the lower North Island, could be directed through Port Taranaki.
An inland port north of Auckland, perhaps at Wellsford or Warkworth, linked by rail to Whangarei and Auckland, could service Auckland city north of the harbour bridge as well as fast-growing regions - and future cities - such as Gulf Harbour.
With at least three major ports in the top half all linked by rail, the impact of a closure of any one port by a natural event such as an earthquake, could be minimised.
The Auckland region, with one third of the country's economy, would remain a focal point for any transport plan for the top half of the island. Auckland importers will oppose any reduction in activity at Ports of Auckland.
Given that our current account deficit with the rest of the world is 10 per cent of gross domestic product, cost-effective exporting must be our top priority. If the cost for importers rises as a result of bringing exports through Tauranga or Whangarei instead of Auckland (an extra $250 for a car has been suggested), then it is the price New Zealanders must pay for a viable future as an independent country.
By using inland ports and rail more effectively, the capability exists to remove all container traffic from Ports of Auckland, leaving it to service cruise ships, ferries and coastal ships.
Planning for Auckland's optimal future stevedore workforce should begin immediately to smooth the transition.
Transforming the upper North Island's port operations in the way outlined would mean that trucks with containers would no longer trundle through Auckland's picturesque eastern suburbs. Alternative uses for the container wharves - remaining publicly owned with leased facilities - would enhance the city's international appeal.
The stadium is a no-go for the moment, but art galleries, a showpiece for Maori life and culture, museums, helicopter or submarine excursions, outdoor stages, events such as Christmas on the Waterfront and other leisure attractions, have the potential to make Auckland a world tourist mecca.
* Dr Warren Hughes teaches managerial and financial economics at the University of Waikato Management School.
