Maersk axe hanging over ports

Maersk uses Auckland and Tauranga now but, soon, one of the ports looks likely to be dropped. File Picture

The largest container shipping line in the world, Maersk, will stop using either Auckland or Tauranga ports in a move that will be a devastating blow to the losing port, informed sources say.

Both ports are in negotiations with Maersk in an attempt to win the lucrative business, which includes Fonterra's exports.

Maersk now calls at both ports.

Its business makes up just over 20 per cent of Ports of Auckland's revenue, which totalled $159 million in the last financial year.

At Port of Tauranga, Maersk's business produces about 11 per cent of a revenue which last year totalled $145 million.

A source said Maersk wanted to increase efficiency in its New Zealand business. Stopping at too many ports was costly, so it would choose between Tauranga and Auckland.

Maersk managing director Tony Gibson would not comment on whether the line would be dropping a port in the North Island.

But he said Maersk was analysing its business and looking at port pricing, and would be making an announcement on a new direction within two months.

Gibson has long felt that New Zealand ports are over-invested, under-used and need to be rationalised to maintain the country's international competitiveness.

"We must take a look 30 years ahead in the way New Zealand should look at the supply chain and make a difference to competitiveness ... calling at one port in the North Island would offer more scale and efficiency," he said.

P&O Nedlloyd had been looking at consolidating its port visits to either Ports of Auckland or Port of Tauranga last year, but that decision was put on hold when Maersk took over P&O Nedlloyd last August.

Gibson said Maersk had focused on continuing business as usual for its customers since the takeover, but such a set-up was not efficient in the long term.

The line was duplicating services and under-using vessel capacity.

Fonterra's supply chain strategy general manager, Nigel Jones, said that since the takeover all parties had had to go back to the drawing board, delaying any decision by the co-operative on what proportion of exports from its new Hamilton freight hub would leave through Auckland or Tauranga.

"It is a completely new ball game with the takeover, as we are talking about large amounts of dairy volume being consolidated to the one shipping line," he said.

"The stakes are much higher now."

Fonterra had been working hard on the port options.

"We have been relatively relaxed at the prospect of significant change, as long as the business model is appropriate," said Jones.

Port of Tauranga chief executive Mark Cairns said the port had given pricing details to Maersk. It would be creating a long-term solution based on road, rail, and port connections.

"We are doing our best at the least cost with long-term productivity," said Cairns.

Port of Tauranga has earmarked 32ha to house facilities to support the container trade.

Cairns agreed that ports were facing the possibility that as container ships increased in size, the number of ports used could be reduced to one in the North Island and one hub port in New Zealand.

Ports of Auckland chief executive Geoff Vazey would not comment on his company's negotiations with Maersk.