Friday, 8 December 2017

Labour's 2017 campaign transport policies [6]: Ports and Coastal Shipping


Coastal Freight Strategy

The Sea Change strategy was first introduced in the final year of the previous Labour government. It recognises that coastal shipping can play a much greater role in bulk freight transport around New Zealand than is currently the case. given the proximity of most major population centres to the coastline and the long thin shape of the country. A key aspect of this policy is that coastal shipping is likely to be competitive against rail transport for significant bulk freight between two ports and therefore the development of such services is a worthwhile alternative to expending significant funds on new rail development projects.

Let's look at an example: regional freight transport needs in the Eastland region. Historically a part of these needs for about 70 years was met by the now-closed Napier to Gisborne rail line. While significant the rail line has never carried large volumes of freight, partly because Gisborne is served by highway routes going north as well as south, and because of the major port at Tauranga not being equipped with a direct rail connection to Gisborne. A historical proposal to develop a rail line between Gisborne and the Bay of Plenty has never been realised and is unlikely to be in future. Hence when Labour has said the case for the line needs to be sustainable they are in some measure reflecting on the difficult economics of the Napier-Gisborne line and the viable alternatives.

The Napier-Gisborne rail line is difficult to justify the continued operation of because of high maintenance costs and a low level of population between the two extremities. It is possible that logging traffic out of Wairoa for shipping from Napier might be worthwhile by rail as this part of the route has been much easier to maintain over the historical life of the railway and is in much better shape than points further north where nearly all the maintenance cash has historically gone.

In the Gisborne region there are many forests that are nowhere near a rail line and will not benefit from any developments on the NGL, unless it is considered necessary to ship logs south to Napier for export or processing. At present several processing facilities exist or are being built in Gisborne for the export wood trade. Logging is a bulk freight that is quite cost sensitive and it is not a given that all the logs should be transported to Napier for shipping when coastal freight services can be and in fact are currently operated in conjunction with Port of Tauranga. Logging ships often call into Gisborne to load from empty before heading north to Tauranga to finish loading and head to their overseas destination because Gisborne has limited shipping draught. Logging traffic through Port of Gisborne has developed in a major way over the past 30 years and volume continues to increase.

Likewise some of the other types of traffic that have been touted for the re-opening of the NGL are currently being handled by ship, these include the squash traffic to Japan and kiwifruit from the Gisborne region. The latter in particular has followed the international trend of eschewing containerised transport in favour of specialised reefer ships owing to the increased efficiency and resulting eco-friendly advantages. This means the alternative of railing containers of kiwifruit to Gisborne is not as guaranteed as some claim. At present reefers come into Gisborne to take a full load of kiwifruit for overseas markets. These are other examples of how coastal shipping can be more viable than rail.

Port of Tauranga is well placed to serve the Gisborne region from coastal shipping services. It has in recent years operated a coastal container service from Timaru making that port able to compete for international freight against Christchurch and Dunedin. As the same ships currently sail past Gisborne on their route between Tauranga and Timaru it would be easy to implement port calls at Gisborne to shift containers of freight to/from Tauranga, or alternatively have a separate weekly service in operation. There are currently no container services operating at the Port of Gisborne.

Ports Strategy

A national ports strategy is a long overdue concept. It is unlikely however that a Labour government will be willing to rationalise the major ports as there is likely to be significant political cost in so doing.

This policy addresses some of the following considerations:

  • Calls for Northport to be developed as an alternative to Auckland and to take over all the freight transport from Auckland.
  • The need for the larger regional ports to invest in development to handle larger ships and other significant financial expenditures.
Currently in the North Island the major freight ports are at Northport, Auckland, Tauranga, Napier, Wellington and Taranaki. Taranaki is the only one of these which does not have any container services at present. In addition, Port of Gisborne is a significant regional port in Eastland. 

Due to agitation at local level in Auckland against the increased development of the port in the Waitemata Harbour the Auckland Council has been forced to consider alternative sites for a new port and this has also led to the situation where Northland interests have suggested the port at Marsden Point could replace the existing Port of Auckland operation. However Auckland Council is not likely to agree to such a strategy and is looking at sites within the Auckland region as being more suitable. Relocating the port of Auckland operations to Northport would impose additional haulage and environmental costs due to the greater expense of moving freight in that volume by rail and would also require massive investment in the rail link between the two centres totalling billions of dollars. This has to be contrasted with the alternatives of coastal freight transport which of course is how most freight already reaches Auckland. 

For the rest of the North Island it is a question of how best to serve areas and which port they should be served from. The key question here is the service of the area from Tauranga to Wellington. At present Port of Tauranga competes with Napier and Napier competes with Wellington. The west coast up to Taranaki is a different scenario altogether, and is impacted by the relative lack of shipping services up that side of the country. Because most of the ports in New Zealand are on or close to the east coast, shipping services can prioritise the east coast for movements between ports and therefore east coast ports have an advantage. This would be also a major consideration should Manukau or another west coast site be chosen as an alternative for the Port of Auckland in the future.

The competition between Tauranga and Napier is evident in the proposals by Napier to reopen the Napier-Gisborne railway line to move freight to and from Gisborne. Gisborne has long been served by road and rail transport alternatives from the north and its position roughly between the two regional centres as well as its own significant port operation (not seen anywhere else in NZ at present for this size of population) makes coastal shipping via Tauranga a viable alternative to Napier based shipping services. Napier also lacks significant freight infrastructure such as full container cranes that means their throughput of handling containers is slower than ports like Wellington that have the historical high volumes of container volume and resultant infrastructure.

Given the existence of viable rail services between most regions the following rationalisation of ports in the North Island is realistic:
  • International container ports for the North Island be at Auckland, Tauranga and Wellington as these centres already have the infrastructure developed or in place to handle large shipping volumes. Auckland is subject to the development of an alternative West Coast site.
  • Feeder services by coastal shipping or rail from secondary ports or centres such as Napier, Gisborne, Northland, Taranaki, Palmerston North and Hamilton.

South Island:
  • The West Coast of the South Island has never had a viable international deep water port development. It seems unlikely the government will agree to fund one in future. Rail is a very expensive alternative given the long distances involved that limits the economic potential of the West Coast. However successive governments seem to accept that the West Coast is not going to be a future economic centre of major importance that justifies a port development.
  • Rail development between Nelson and the West Coast makes more sense than New Zealand First's proposed Picton-Blenheim route. This would give access to Port of Nelson for freight volume from the West Coast. However there is no distance advantage for the West Coast compared to Lyttelton. This means that a rail link for Nelson is very unlikely to ever be developed.
  • There are three major East Coast ports all competing for freight. It is questionable that all of these facilities are needed and Lyttelton should be prioritised over the Timaru and Dunedin ports given the need for facilities for new large container vessels. 
  • Port of Nelson is in a different position as they have no rail link to any other port. Coastal services from this port to other ports such as Picton and Wellington is quite viable to serve either Nelson or Marlborough regional freight needs.

Ports and Coastal Shipping

Labour will:
  • As part of a national freight strategy, develop a national ports strategy with a particular focus on the upper north island.
  • Refresh and move to implement the ‘Sea Change’ strategy to revitalise Coastal shipping.