Business North November 2021

66 | SHIPPING New Zealand Shipping Federation Thriving coastal shipping fleet vital T T Richard Loader The Government’s recent ‘Sea Change’ strategy for local shipping has become a focus for the New Zealand Shipping Federation. “So what Covid has really done is highlight the importance of domestic coastal shipping as essential to moving goods around the country.” D isruptions to international shipping and the movement of goods to and around New Zealand resulting from Covid have highlighted the need for a healthy domestic coastal shipping industry and why it is essen- tial for our economy and national resilience. The government’s recent ‘Sea Change’ strategy for growing coastal shipping has become a key focus for New Zealand Shipping Federation (NZSF), the advocacy organisation supporting coastal shipping in New Zealand. NZSF Executive Director John Harbord says the Government recognises that coastal shipping’s role in a multi-modal transport system has been neglected and needs to be addressed. “If we can use this small window to put in place a strategy for multi-modal transport and the related infrastructure required then coastal shipping will have a bright future. If the Government does not adopt a strategy that recognises all three transport modes — road, rail and shipping — the erosion of coastal shipping will continue through lack of investment and business.” John says an unfair playing field between Kiwi coastal shipping and the international players undermine the long-term viability of our own coastal shipping industry and put jobs at risk, while leaving us vulnerable as a nation. “You have international shipping lines that bring vital imports into the country and they pick up our exports and take them to the in- ternational markets. Products might be deliv- ered to Lyttelton, and the shipping line might sail up to Tauranga, pick up export product and sail back to an international market in Singapore, for example. But they load product in Lyttelton and move that up to Tauranga, to make a bit more money while in New Zealand waters.” Because of where those international ship- ping lines are flagged they tend to pay little or no corporate tax, don’t have to pay GST on supplies they buy when in New Zealand and their crews are employed at well below the New Zealand minimum wage. The international shipping lines can there- fore move the goods at a significantly lower cost than domestic coastal shippers need to charge, just to break even. During the pandemic, New Zealand has felt the global impact of disruption to internation- al shipping resulting from widespread port congestion, highlighting why having a healthy domestic coastal shipping fleet is essential for the economy and our national resilience. For those international shipping lines bring- ing product into the country and taking it back overseas, the international shipping schedules have become unreliable with international ships becoming less willing to come to New Zealand, due to demand constraints and a greater focus on profit maximisation. Put simply, the international shipping lines can make greater profit if they stay closer to major shipping lanes rather that coming all the way down to New Zealand less frequently. The ripple effect is that they are not contribut - ing to the movement of freight and containers around our coastlines. “Suddenly we’re saying we need our do- mestic coastal shipping, but we don’t have as much of it as we used to have. So what COVID has really done is highlight the importance of domestic coastal shipping as essential to moving goods around the country.” John says there is a real opportunity and strong future for coastal shipping. Over the next twenty years domestic freight is forecast to increase by 40-50% largely due to popula- tion growth. “We can’t put all of that onto our roads. Aside from congestion, pollution and emis- sions our roads aren’t built for that volume of heavy vehicle. “One ship can be the equivalent of over two hundred trucks and coastal freight is the cheapest option. It costs around seven thousand dollars to move a container from Auckland to Christchurch by road, and just six hundred dollars by ship with one-eighth the emissions per tonne of cargo.” If we’re serious about lowering trans- port emissions, then coastal shipping is an essential part of the solution, as well as our economy, quality of life and emergency man- agement and national resilience. Following the Kaikoura earthquake only coastal shipping could get supplies in with the roads and rail out of action. So there is a compelling case for ensuring coastal shipping is a strong player in the mul- ti-modal transport system so that we can keep our roads safe, move a lot more and more cheaply and massively lower emissions. “If we can have a playing field where our members can be competitive, then the long- term future looks quite good. So it’s navigating that interim period between disruption and bright future.”