Container line to bypass Auckland

Port of Tauranga. Photo / APN

A shipping firm's decision to make Port of Tauranga its only New Zealand stop on a new route is a blow for its competitors, such as Ports of Auckland, an analyst says.

Geneva-based Mediterranean Shipping Company, the world's second largest container line, will begin its Oceania Express service in October, with the Bay of Plenty facility its sole port of call in this country.

The new route links Australasia with the Americas. Beginning in Melbourne, it travels up Australia's east coast, crossing the Tasman Sea to Tauranga and then to Panama, in central America, and on to Long Beach in the United States, before returning directly to Melbourne.

Craigs Investment Partners analyst Geoff Zame said the service provided justification for Port of Tauranga's aggressive capital investment plans.

The company intends to invest up to $150 million over the next three years to extend wharves and dredge its shipping channel and berths to accommodate larger vessels.

MSC's decision to make its stop at the Bay of Plenty port was also an example of a structural change in the New Zealand port sector, with Port of Tauranga positioning itself as a key hub and other ports feeding cargo into the facility for shipment overseas, Zame said.

Last week Ports of Auckland reported a 7.7 per cent lift in full-year trans-shipment (cargo being moved ashore from one vessel and loaded on to another) volumes, while Port of Tauranga's rose 52 per cent during the same period.

"The type of dynamics that we are seeing don't really bode that well for Ports of Auckland," Zame said. "[The new service is] clearly excellent for the long-term prospects for Port of Tauranga and justifies the sort of investments, which are pretty significant, they are making over the next few years to accommodate this sort of growth."

Ports of Auckland chief executive Tony Gibson said he did not expect the Oceania Express service's stop in Tauranga to have any real impact on the council-owned firm.

"We have other similar services already calling [on] Auckland," he said.

MSC national operations director Mark Godfrey said the company recognised the Port of Tauranga as an important hub.

"We plan to trans-ship cargo from six other New Zealand ports utilising our three other services currently operating in New Zealand," he said.

Port of Tauranga said yesterday that the Oceania Express service, combined with other new services, meant the company was forecasting container volumes to lift 20 to 25 per cent in the coming year, compared with its last financial year.

Around 40 per cent of the increased volume would result from trans-shipped cargo, the company said.

Port of Tauranga chief executive Mark Cairns said the facility's location, as well as its "superior crane productivity", meant it made sense as a hub.

"We also have an ability to grow - other ports are quite constrained in their land footprints," he said.

Port of Tauranga last week reported a record underlying profit of $57.9 million for the year to June 30.

The facility now ships more than three times the export volume of Ports of Auckland, although Auckland is still the country's biggest port in terms of container volume, shipping 894,383 twenty-foot equivalent units (TEUs) last year, compared with Port of Tauranga's 590,506 TEUs.

Oceania Express

* The route
Melbourne - Sydney - Brisbane - Tauranga - Balboa (Panama) - Long Beach (California) - Melbourne

* Frequency
14 days.