RTF UNIMPRESSED WITH INTERISLANDER LEVY

Road Transport Forum (RTF) chief executive Ken Shirley has expressed his members’ displeasure with a pending 15.5% “earthquake levy” to be introduced on commercial vehicles travelling on the Interislander.

Mr Shirley says the levy, which is due to be implemented as from the middle of next month, highlights the “deep seated” issues being faced by Interislander parent company, KiwiRail, which have been “brought to the fore following the damaging earthquakes”.

“The proposed levy is more an ongoing ‘capacity levy’ rather than an ‘earthquake levy’ and the restoration of the Picton to Christchurch direct road and rail routes will not solve the problem,” he says.

“There is a potential for this levy to become permanent once imposed under the guise of an ‘earthquake levy’.”

He says road transport operators are facing resistance from customers when negotiating recovery of this new cost which comes on top of the additional costs stemming from the alternative route connecting Picton with Christchurch and regions further south.

“Fundamentally it is now a different freight task. Many report additional costs of at least 20%.”

However, Mr Shirley emphasises that road transport operators “cannot and should not absorb these additional costs”.

“A greater effort is required to ensure that freight costs are met by the customer and consumer. An awareness and understanding of the problem is always a good starting point.”

CHARGING INFRASTRUCTURE GUIDANCE FOR EVs

A newly published government guidance document on charging infrastructure for electric vehicles (EVs) is expected to enhance the development of a safe and consistent charging network.

With New Zealand’s EV fleet now surpassing 2500 and “exceeding all targets”, Transport Minister Simon Bridges says the aim is to provide clear recommendations for both investors and those enabling the development of charging station sites, such as local authorities.

“While we expect most charging will continue to take place at home or the workplace, reliable public charging infrastructure is crucial to provide drivers with the confidence to make longer trips,” says the Minister.

“It can also influence the decision to buy one.”

Minister Bridges adds that the New Zealand Transport Agency worked closely with local and central government and industry to identify recommendations that would best meet the long-term needs of EV drivers.

“Central to the recommendations was ensuring they took into account emerging fast-charge technology and overseas market shifts, learning from the failures and successes of other countries.”

Supporting the development and roll-out of public charging infrastructure, the guidance document forms part the Government/industry programme to achieve 64,000 EVs in New Zealand by the end of 2021.

LARGER TRUCK MEASURES ON KAIKOURA ROUTE

A widened road as well as new parking bays and pull-over areas are among options being considered for the restoration of the Kaikoura State Highway 1 route in order to accommodate larger trucks in greater volume.

Members of the North Canterbury Transport Infrastructure Recovery (NCTIR) alliance, which has been formed to lead the restoration of the earthquake-affected coastal road and rail network, are understood to be in the throes of finalising plans for the project.

At a recent residents’ meeting in Kaikoura, NCTIR head Duncan Gibb reportedly said the aim was to have the coastal road route reinstated by the end of the year. Albeit, he acknowledged this would be a challenging task.

It is understood that some residents in attendance questioned if all alternative options had been fully considered, with it noted that future slips could still impact the reinstated road and that catering for increased trucking volumes would negatively impact the tourist experience.

In this vein, a viewpoint was reportedly expressed that future consideration could be given to using shipping services over road or rail for non-urgent and non-perishable goods, in order to lessen greenhouse gas emissions, noise and “perceived intimidation” of increased trucking.

STRAIT REBOUNDS, INTERISLANDER STILL IMPACTED

Strait Shipping commercial general manager Ed Menzies says business is now “back to normal” following November’s Kaikoura earthquake, whereas the Interislander is reportedly facing an ongoing downturn.

After an initial dip in passenger bookings following the 7.8-magnitude event, the market quickly returned to its buoyant peak summer season levels with no sign of slowing, says Mr Menzies.

“Meanwhile freight volumes increased significantly in the weeks after the earthquake — a trend that has continued through January and isn’t expected to change in the short to medium term,” he says.

“With our vital Cook Strait link even more important following the quake, it’s very much business as usual as we work 24/7 to move freight and people seamlessly between north and south.”

Mr Menzies adds that Strait Shipping has not made any schedule changes as a result of the quake and has both freight and passenger capacity on most sailings.

Contrastingly, KiwiRail sales and commercial general manager Alan Piper is understood to have recently E-mailed customers advising that the badly damaged Main North Line has had a “material impact on freight volumes by as much as 50% on Interislander ferries”.

It has been speculated that KiwiRail is contemplating parking up the Kaitaki for a period in Nelson.

NRC REFUSES DETENTION CHARGES

Formal notice has been given to major shipping lines that members of the National Road Carriers (NRC) will “not accept any charges for detention on empty containers” in Auckland.

In a letter issued to carriers on Friday January 13, NRC chief executive David Aitken stated the shipping industry had created a situation in the city “where it is not possible to economically and safely return empty containers in a timely manner”.

“Our members are not able return containers and will be forced to leave them at client’s premises or store them elsewhere,” he stated.

“They will recover these costs from their clients, who may in turn seek recompense from your companies.

“The matter of container control is one that your respective companies take responsibility for and it must have been known that this situation would occur.”

Subsequently, NRC port committee chairperson Chris Carr stated that empty container depots were “full to the brim and then more”.

“Shipping lines have known about this building issue and have in fact allowed it to happen,” he added.

“Containers would normally be evacuated from New Zealand, but this has not occurred through increasing export loadings, which is good for New Zealand and bad for transport operators having to deal with the mess.”

TREGURTHA DEFENDS BOOKING SYSTEMS

Pinnacle Corporation and MetroBox Specialised managing director Grant Tregurtha has spoken in defence of the booking systems introduced by Auckland container storage depots, stating recent congestion issues would have been even worse without their contribution.

His comments follow National Road Carriers (NRC) port committee chairperson Chris Carr’s recent criticism that the systems have imposed both costs and “logistical juggling” on transport operators while not delivering such promised benefits as reduced turnaround times.

“Turnaround times have reduced in Auckland, albeit not to the levels that we had anticipated,” counters Mr Tregurtha.

“A 24% increase in empty volumes last year through the Auckland container parks created congestion within all operational aspects of the depots, especially with gate co-ordination.

“Without the gate booking system the gate waiting times would have manifested into significant permanent delays that would have been measured in hours rather than minutes, so we see the booking system as a valuable tool in assisting the successful processing of volume at the gate.”

Mr Tregurtha says the booking systems provide key “visibility”.

“Pre system we were totally reactive to the request which was first notified to us when the truck arrived at the gate.”

He adds that the problematic issues at play need to be tackled on a collaborative basis.

“I firmly believe the difficulties the industry is facing will only be solved if we all recognise that it is an industry issue and work collectively and not as a direct result of failings with individual components of the process.”

SHIPPERS NEED NEW ALLIANCES TO WORK — ARSENAULT

A failure of pending alliances to return the global container shipping industry to profitability could deliver a devastating future reality to the interests of shippers, according to former Hyundai Merchant Marine vice-president David Arsenault.

In a recent address to the International Propeller Club, Mr Arsenault reportedly stated that if those new alliances cannot sufficiently raise rates, then shippers “won’t like the next step”.

That next step would entail rapid consolidation through mergers and acquisitions that would leave the industry with a handful of extremely powerful shipping lines that could set freight rates at will, reports JOC.com.

Mr Arsenault said such a scenario had occurred in the global airline industry, where after many bankruptcies and mergers, the remaining carriers were now in a position to influence capacity so as to keep planes full and fares on a continual rise.

Meanwhile, JOC.com is also forecasting that United States ports will face “unprecedented” operational challenges when containerlines restructure from four down to the three new global vessel-sharing arrangements on April 1.

It predicts that the introduction of The Ocean Alliance, THE Alliance and the 2M Alliance will particularly result in “magnified” challenges for the ports of Long Beach and Los Angeles. Previous congestion issues at such ports has caused significant flow on “out of window” call impacts for New Zealand and other ports around the world.

OOCL TAKEOVER BID?

Marketplace rumours are circulating that one of the world’s largest containerlines could be eyeing a potential takeover bid for Hong Kong-based Orient Overseas Container Line (OOCL).

Currently ranked eighth in the world in regards to capacity at 571,183 TEU according to Alphaliner, the carrier’s shares have been observed to undergo a significant recent surge on the Hong Kong stock market amidst the speculation.

It has been noted that the gap is “widening” between the largest carriers — AP Moller-Maersk at 3.28 million TEU, Mediterranean Shipping Company at 2.84 million TEU, CMA CGM at 2.13 million TEU and COSCo at 1.64 million TEU — and the rest of the marketplace.

Furthermore, Transport Intelligence observes carriers such as OOCL — which is actually slightly smaller than the about-to-be acquired Hamburg Süd — are becoming increasingly “vulnerable” as the larger carriers continue to grow through acquisition.

“Such consolidation cannot be anything other than a challenge for the likes of OOCL,” it states.

“Although it has a better record of profitability than many others, for the first half of 2016 the company experienced a loss, mitigated by the revaluation of assets.

“Creating a new company that will be successful in today’s market is not easy. Yet should the Tung family, that holds a controlling stake in OOCL, wish to initiate some sort of process either of merger, purchase or sale, there probably would be no shortage of targets in the vicinity of the South China Sea.”

PREDICTIONS FOLLOWING ONE OF “WILDEST” YEARS

Pricing becoming “shakier”, further consolidation and alliance adjustments are among predictions for the global container shipping industry made by the JOC.com media outlet, following what it describes as “one of the wildest years in container shipping history”.
“Within one year, the industry witnessed the largest bankruptcy in liner history with Hanjin Shipping, historically low spot rates, the narrowing of the top 20 global container lines to 14 and the dramatic reorganisation of global shipping lines into new, larger vessel-sharing agreements,” it states.
“With the industry in such a dynamic state, 2017 will likely hold its own surprises.”
The Newark (United States)-based media outlet is also predicting a squaring off between labour and employers in American ports and big ships testing that country’s port infrastructure, as well as terminals and ports banding together on the global scene.
On the latter point, JOC.com comments that having observed the operational and cost efficiencies containerlines are generating by teaming up with rivals, ports and terminals around the world have begun to follow suit.
“The ports of Seattle and Tacoma joined forces in 2015 to improve productivity and eliminate excess capacity, and the end of 2016 saw a flurry of activity among ports and container terminals seeking to form co-operation agreements.
“Federal Maritime Commission (FMC) chairman Mario Cordero has said there will be more agreements like these in the future …
“On the other side of the globe, a number of terminals in Hong Kong are uniting in a bid to stop the steady decline of trans-shipment volumes at the port.”

CONTAINER OPERATIONS RETURN PLANNED FOR CENTREPORT

Modified container operations are expected to recommence at CentrePort Wellington by July this year or sooner.
CentrePort chief executive Derek Nind this week announced work is planned to secure its two 86-metre-high and 720-tonne gantry cranes, which were rendered inoperable among the significant damage suffered by the port in the November 14 earthquake.
While CentrePort is to continue working with shipping lines over using geared ships as an interim solution, the port is progressing a plan to both reintroduce crane operations and build resilience in case of another significant event, says Mr Nind.
“For the medium term we are developing a plan for interim works that could restore modified container operations within four to six months,” he says
“This would immediately improve CentrePort’s capacity and productivity, allowing us to serve the needs of importers and exporters in the central region. We will be keeping our customers informed as these plans develop.
“We know how important container shipping is to the regional economy. That’s why we worked hard to quickly restore limited container movements using ships with their own cranes. We are now assessing longer-term options to keep freight costs low for Wellington’s businesses.
“Over the coming days CentrePort will also commence maintenance on the berth pockets alongside part of Aotea Quay Wharf. This will increase the flexibility of operations at the port, since the earthquake has damaged Aotea Quay 1 and Thorndon Container Wharf.”