The Auckland fuel tax always looked doomed, just not quite this quickly

New Zealand had a regional fuel tax during the early 1990s, but it was abandoned as the impact spread across the country.

SIMON MAUDE/STUFF
New Zealand had a regional fuel tax during the early 1990s, but it was abandoned as the impact spread across the country.
OPINION: When the Government signalled plans to introduce a special fuel tax in Auckland, transport officials warned Transport Minister Phil Twyford that such a measure had been tried before and failed. At least twice.

For all the good intention – that motorists benefiting from major transport projects pay their share – there is little that can be done to prevent the impact of the tax increase spreading across the country.

Proving exactly who is paying what when it comes to excise tax on petrol is hard, because the giant tax bill is paid in bulk.

But there are signs that rather than spilling over when the tax comes into force, that the sharp price increase in recent weeks could be price spreading in anticipation of the price increase.

Prices are rising strongly in areas where competition is limited in comparison to Auckland, where the increase has been much more muted.

When Twyford introduced legislation to enable the new tax, which is supposed to add 11.5 cents a litre to the price of petrol in Auckland but nowhere else, the average petrol station in Auckland was charging about 4c a litre less than in Christchurch.

By last week, as prices hit the highest of all time in areas subject to the “national” fuel price, the average difference between Auckland and Christchurch, was more like 16c.

Transport Minister Phil Twyford was warned that regional fuel taxes had been tried and failed before and is now refusing ...

MONIQUE FORD/STUFF
Transport Minister Phil Twyford was warned that regional fuel taxes had been tried and failed before and is now refusing to discuss signs that the impact may already be being felt by motorists elsewhere.
 According to information from Gaspy, a mobile app which monitors prices based on observations of thousands of drivers, the growth in the gap between Auckland and Wellington has also surged since late March.

In rough terms, the degree of price increases in many areas has grown by the scale of the impending Auckland regional fuel tax.

So come July 1, if prices in Auckland do actually increase by 11.5c, can it really be said that Aucklanders are the ones paying the regional fuel tax?

Or, as the Ministry of Transport warned could happen (and has happened before), has the impact of the Auckland regional fuel tax actually been spread across the country?

It appears the fuel companies are doing something akin to front running the increase. A sharp price increase is coming to a highly competitive area and prices in areas where there is less competition than Auckland are quickly drifting higher ahead of the move.

Z Energy, which has consistently fronted up to comment when its rivals have refused, denies prices are rising in anticipation of the fuel tax.

A spokeswoman said the price gap between the cheapest and most expensive stations tended to grow sharply during times of rising crude prices, and then narrow when oil prices stabilised.

Gaspy, which crowd sources petrol prices from around the country, has noticed a conspicuous widening in the gap between Auckland prices and other parts of the country, especially Christchurch. Z Energy says the price gap is typical of periods when crude prices rise strongly.

Perhaps this is the case, but if so it would simply highlight how different areas are much less competitive than others.

The Z Energy spokeswoman also declined to give assurances that the gap would narrow as crude oil prices stabilised. Come July 1, the company would add the Auckland regional fuel tax to stations across New Zealand’s largest city, but then it would be a case of market forces at play.

A spokeswoman for BP said the recent changes in its national pricing “are a function of the rising crude/falling [New Zealand dollar] environment we are currently operating in, together with competitive factors playing a part, rather than a response to the proposed introduction of the regional fuel tax.”

If the regional fuel tax were legislated, BP “will apply the Auckland regional fuel tax from 1 July within the identified boundaries” the company said.

Larry Green, co-founder of Gaspy, said the price gap between Auckland and other areas was growing at such speed it was “impossibly unlikely” that it was not related to the impending price increase.

“The more they [the petrol companies] spread it over time, the less it looks like an anomaly”.

This has all happened before, suggesting Governments never learn.

During the early 1990s, New Zealand had a regional fuel tax, but it was abandoned as the impact spread across New Zealand.

The Government passed legislation for another regional tax in 2008, but never introduced it because of fears of price spreading.

We know this because it is contained in a very clear warning to Twyford about what could happen to his increase.

“If price spreading was to occur the larger companies have the ability to spread the cost of the tax to all fuel sales made across their network. For example, fuel companies could charge approximately three cent tax nationally across their network to cover a 10 cents per litre regional fuel tax required in for each litre of fuel sold in Auckland.”

To give Phil Twyford credit, it is not as if he is prone to simply accepting what government officials tell him.

When he didn’t like what Treasury said about how much of an impact KiwiBuild would have on the housing market, Twyford accused “kids at Treasury” of being “disconnected from reality”.

Whether or not he accepts that the regional fuel tax will have integrity is hard to know.

Apart from a vague promise to increase monitoring of prices to assess whether price-spreading occurs, Twyford is refusing to comment, saying there is nothing he can add.

But given how stark the warnings were, the regional fuel tax simply looks dishonest. The Government should admit it will not work, replace the regional tax with a smaller nationwide one and drop the charade.

 – Stuff

LPC Ready to Meet Canterbury’s Doubling Freight Demands

18 MAY 2018

 

With the 2011 earthquake rebuild behind it, Lyttelton Port Company (LPC) is now focused on enhancing its infrastructure to efficiently manage Canterbury freight volumes, forecast to more than double in the coming three decades.

LPC Chief Executive, Peter Davie says, “We have recently been granted resource consent to dredge the harbour shipping channel to increase our draught. This will enable larger ships to call at Lyttelton Port providing Canterbury’s importers and exporters the best possible and most cost effective international shipping solutions.

“We have also been granted resource consent to expand our land area to cater for growing Canterbury imports and exports,” says Mr Davie.

“What’s critical for us is that these two developments allow us to grow Canterbury’s trade. It is really important that we have the facilities to enable larger ships to move cargo as we continue to grow. Since the earthquakes we have doubled our container volumes and we expect that to continue.

“The dredging programme means larger container ships, which have virtually doubled in size during the last 10 years, will be able to call at Lyttelton. It is estimated this will decrease freight costs for Lyttelton customers by more than 10 per cent.

“The channel deepening lengthens the navigation channel by approximately 6.5km and widens it by 20 metres. The work will occur in two stages. Stage one will allow vessels with a 13.3 metre draught to call at Lyttelton. Completion of stage two will allow unrestricted sailing for 14.5 metre draught vessels across all tides,” says Peter Davie.

Chairman of the International Container Lines Committee (ICLC), which represents most major container carriers calling at New Zealand, Mark Scott welcomes the news that LPC is about to embark on its channel deepening, and undertake further reclamation.

Mark Scott says, “It is vital that Lyttelton positions itself well and has the capacity for larger ships to call at the Port. Shipping companies are making decisions now on where these large ships will call in New Zealand and the dredging programme gives them assurance that Lyttelton Port is a major player.

“Currently container vessels visiting Lyttelton commonly carry 4,500- to 5,000 Twenty foot equivalent units (TEUs), that will increase to 5,500 -6,500 TEUs with larger vessels. However it is quite conceivable that with the dredging of the channel vessels carrying 8,000-9,000 TEU will be able to call at Lyttelton.”

Mike Knowles, Chair of the New Zealand Shippers Council says it is really encouraging from a shippers point of view that the Port Company is able to proceed with the dredging and expansion programmes.

“Bigger ships will continue for the foreseeable future and as Lyttelton is the major port in the South Island it is essential that it gears up to accommodate them.

“The infrastructure initiatives taking place at Lyttelton means it will remain competitive for international shipping lines, facilitating Canterbury exporters’ and importers’ access to world markets,” said Mr Knowles.

LPC was granted its channel deepening consent in March 2018, with Environment Canterbury satisfied that LPC’s plans balanced what is best for the environment, the community and Canterbury’s growing regional economy.

Peter Davie said the overall dredging programme would be the country’s biggest, and that LPC had already implemented the largest environmental monitoring programme ever undertaken for a New Zealand dredging project.

“We have awarded the initial stage of the channel deepening programme work to Netherlands-based contractor Royal Boskalis Westminster N.V. – a leading global operator with more than 100 years’ experience. Their dredge will start operating in late July/early August and the dredging programme will last around 11 weeks.

“At the same time we will expand our reclamation at Te Awaparahi Bay by 24 hectares, which includes the construction of a new 700 metre container wharf. Last year the existing reclamation at Te Awaparahi Bay reached 10 hectares.

“This expansion is critical to enable the Port, as the South Island’s trade gateway, to meet the needs of the forecast growth in the container and general cargo trades.

“A key focus of our long term plans is to move our operations to the east, away from the local community. The additional reclamation will facilitate this shift.

“We are committed to future proofing our operations by making certain that we have a facility that meets customer needs for the future and supports the lifestyle of all people living in Christchurch, Canterbury and the wider South Island.

“We are delighted to achieve these resource consents. We acknowledge the constructive working relationship we have with the many groups that make up our community, particularly iwi, as we carefully carried out our assessment of environmental effects prior to lodging our resource consents,” Mr Davie said.

Please view this short video, and see the graphics at the end of this media release, of the future development of the shipping channel and the reclamation.

https://vimeo.com/270012167

SH1 to Kaikōura to close overnight later this month

Road workers will close State Highway 1, between Christchurch and Kaikōura, later this month to start removing the shipping containers which have been protecting vehicles from rockfalls.

The seawall along a section of State Highway 1 north of Kaikōura.

The seawall along a section of State Highway 1 north of Kaikōura. Photo: RNZ / Logan Church

Shipping containers protect the traffic at three sites.

An operations manager for the highway reconstruction, Tresca Forrester, said crews had been working on widening the Paratitahi tunnels, and the containers needed to be removed to complete this work.

A section of the highway, between Peketa and Leader Road intersection, will close at 10pm on Monday 28 May and reopen on Tuesday at 6.30am.

Further overnight closures are planned for late June to remove the final containers and several hundred concrete blocks that have also been used for rockfall protection.

Sulphur Cap Chaos in 2020 Warn World’s Shipowners

The International Chamber of Shipping (ICS) fears ‘chaos and confusion’ unless the UN International Maritime Organization (IMO) urgently resolves some serious issues concerning the successful implementation of the 0.5 percent sulphur in marine fuel cap, which is scheduled to come into effect globally overnight on 1 January 2020.

Such chaos would have serious consequences for the movement of the world’s energy, raw materials and manufactured products – about 90 percent of global trade being carried by sea.

This was the principal conclusion of the Annual General Meeting of ICS’s member national shipowner associations which met in Hong Kong last week.

Esben Poulsson, ICS Chairman

Speaking from Hong Kong, ICS Chairman Esben Poulsson said:

‘The shipping industry fully supports the IMO global sulphur cap and the positive environmental benefits it will bring, and is ready to accept the significant increase in fuel costs that will result. But unless a number of serious issues are satisfactorily addressed by governments within the next few months, the smooth flow of maritime trade could be dangerously impeded. It is still far from certain that sufficient quantities of compliant fuels will be available in every port worldwide by 1 January 2020. And in the absence of global standards for many of the new blended fuels that oil refiners have promised, there are some potentially serious safety issues due to the use of incompatible bunkers.’

Mr Poulsson added:

‘Governments, oil refiners and charterers of ships responsible for meeting the cost of bunkers all need to understand that ships will need to start purchasing compliant fuels several months in advance of 1 January 2020. But at the moment no one knows what types of fuel will be available or at what price, specification or in what quantity. Unless everyone gets to grips with this quickly we could be faced with an unholy mess with ships and cargo being stuck in port.’

ICS emphasises that governments will need to make significant progress on these issues at a critical IMO meeting in July about the impending global sulphur cap, to which ICS – in cooperation with other international industry associations – will be making a number of detailed technical submissions to assist successful implementation of what ICS describes as a regulatory game changer.

European Commission Needs to Respect IMO CO2 Reduction Strategy

The ICS AGM in Hong Kong endorsed its support for the historic UN IMO agreement adopted in April 2018 on a comprehensive strategy to phase out international shipping’s CO2 emissions completely. This includes targets to improve the sector’s CO2 efficiency by at least 40 percent by 2030 and 70 percent by 2050, and a very ambitious goal to cut the sector’s total GHG emissions by at least 50 percent by 2050 regardless of growth in demand for maritime transport.

ICS member national associations agreed to contribute constructively to the immediate development of additional IMO regulations that will start to have a direct impact on further reducing international shipping’s CO2 emissions before 2023, in line with the new IMO strategy. They agreed that ICS should come forward with detailed proposals before the next round of IMO discussions in October on reducing GHG emissions from shipping.

However, ICS members expressed serious disappointment at the apparent intention of the European Union to press on with the implementation of a regional CO2 reporting system at variance to the global system already agreed by IMO, despite having given an undertaking to align the MRV regulation with the global regime.

‘We are still waiting to see the final recommendations from the European Commission following a recent consultation’ said ICS Chairman Esben Poulsson. ‘But the industry has made clear its total opposition to the publication of data about individual ships using abstract operational efficiency metrics that bear no relation to CO2 emissions in real life and which will be used to penalise shipowners unfairly.’

Mr Poulsson added:

‘Anything less than a full alignment with the IMO CO2 data collection system will be seen as a sign of bad faith by many non-EU nations who recently agreed to the IMO GHG reduction strategy, precisely to discourage such unilateral measures which risk seriously distorting maritime trade and global shipping markets.’

Esben Poulsson Re-elected

The ICS AGM, which was hosted by the Hong Kong Shipowners Association, re-elected Esben Poulsson (Singapore) as ICS Chairman for a further two year term.
Source: International Chamber of Shipping

Interview: Shipping’s Decarbonization Will Need Major R&D Investment


Following a lengthy process, the International Maritime Organization’s (IMO) member states finally agreed in April to require international shipping to decarbonize and at least halve its greenhouse gas emissions by 2050.

The agreement includes strengthening design requirements for each ship type, a relative reduction of 40 percent in CO2 emissions by 2030, and at least 50 percent reduction by 2050, and subsequently a path toward a complete phase-out.

Although the members agreed on the goals, concerns were raised over the lack of any clear plan of action to deliver the emissions reductions.

Kirsi Tikka, Executive Vice President, Senior Maritime Advisor, at the American Bureau of Shipping (ABS), in an interview with World Maritime News said that collaboration by all stakeholders as well as sufficient investment in technology development are needed.

“To meet the targets established in the initial IMO strategy for GHG reduction will require considerable development time and financial investment that may not deliver returns in the short term.”

Since the experiences of early adopters of technology in complying with environmental regulations have not always been positive, the industry “is unlikely to adopt new GHG reduction technologies until there is a full proof of functionality and ideally a cost/benefit analysis.”

Kirsi Tikka, Executive Vice President, Senior Maritime Advisor, ABS
Kirsi Tikka, Executive Vice President, Senior Maritime Advisor, ABS

Tikka continued that financing the R&D needed to deliver on the schedule established by the IMO strategy “will be a challenge for the industry – something of which the IMO is well aware.”

WMN: Would you agree that the compromise on the 50 percent reduction was the best the IMO could do for the moment?

Tikka: Given the apparently high degree of disagreement on strategy between member states going into the meeting it was a very positive result for the IMO, the industry and potentially, the environment. By agreeing to establish a global target for CO2 emissions reductions, the IMO has produced a result in line with the Paris Accords and has sent a clear message that eliminates the need for regional target setting.

Shipowners will start to collect emissions data according to the IMO Data Collection System in January 2019 and this data will provide the foundation for IMO discussions on the final shape of the GHG strategy from 2023, Tikka continued.

Despite the headlines concerning 50% reductions of 2008 levels by 2050, the targets for the greenhouse gas reduction “are not finalized and IMO will use the output from the IMO DCS and the fourth IMO Greenhouse Gas Study (in 2020) to further refine the targets.”

In the meantime, shipowners are probably more focussed on the implications of 2020 in terms of fuel strategy and operational profile, Tikka said.

“The IMO GHG agreement raises a lot of questions, to which there are for the moment, few answers: what kind of technology will be available? What fuel strategy – conventional or alternative – should they choose and what propulsion system will offer the best option?”

WMN: What is your take on the available solutions on the market? What is the way forward: alternative fuels, scrubbers or maybe innovative ship designs?

Tikka: I agree that there is a need for significant system and service development to transfer some of today’s promising technology into solutions that can be implemented and applied. These include fuel cell and battery technology, wind and solar power assistance and new fuels such as Gas-To-Liquids, methanol from biomass and other biofuels, but few are ready to go on the kind of scale needed to meet the GHG targets.

Vessel designs have already been optimized for economic efficiency in recent years and a step change in efficiency would require a radically different approach to design and/or use of materials. Since it is not feasible to replace the world fleet by 2030, we will need other fuel and operational measures such as optimizing speed for on-time arrival at port, to supplement any advances in design.

Speaking on the impact of CO2 reduction decision on ship speeds, Tikka informed that vessel speed has “a significant impact on required power and therefore on fuel consumption and CO2 emissions.”

As a result, ships in sectors that typically operate at higher speed “are likely to work at lower operational speeds in future. And maybe more importantly these speeds will need to be optimized for the most efficient utilization of the vessel in the logistics chain rather than the traditional approach of specifying the speed in the charter party.”

Tikka said that addressing the CO2 requirements “will certainly take a holistic approach across the industry.”

The leveraging of more real-time and accurate vessel performance data will form an integral aspect of achieving these improved efficiencies. Digital technology and improved connectivity will offer tools not only for reporting and improving vessel performance but also for optimizing the wider logistics chain, Tikka concluded.

World Maritime News Staff

Trains, boats and planes: Kim Jong-un’s modes of transport

Kim Jong-un arrives in DalianDon’t call it Air Force Un – the aircraft’s official designation is “Chammae-1”

A mysterious North Korean aircraft stationed at China’s Dalian airport was the subject of much speculation on 7 and 8 May.

The plane was eventually confirmed to be that of leader Kim Jong-un, who it turned out was meeting Chinese President Xi Jinping in the coastal city.

Mr Kim’s increasing international engagement has given the wider world a view of how he travels, with each visit showcasing a different form of transport.

Kim Jong-un arrives in DalianKim Jong-un was afforded a guard of honour on his arrival in Dalian

Aircraft – just an Ilyushin

Kim Jong-un’s China visit this week marks his first confirmed international flight since assuming power, but media reports suggest he has previously used his private jet for travel within North Korea.

The aircraft that flew him to China was a Soviet-made long-range aircraft, the Ilyushin-62 (Il-62). The North Korea watchers at website NK News say it is called “Chammae-1”, named after a local species of hawk.

The North Korean IL-62 jet on final approach to Incheon before the Winter Olympics in South KoreaThe IL-62 jet was used to transport North Korea’s delegation to the Winter Olympic opening ceremony earlier this year

The white exterior of the plane is emblazoned with North Korea’s official name in Korean on two sides, with the national flag next to the text. The tail features a red star inside red and blue circles.

The aircraft has modern interiors, and Kim has occasionally been photographed working and holding meetings on board.

Kim Jong-un inspects Pyongyang from the air in 2015Smoking is allowed on the Supreme Leader’s personal aircraft

The Chammae-1 was in the spotlight in February when it carried Pyongyang’s high-level Olympics delegation, including Kim’s sister Kim Yo-jong, to South Korea.

South Korean news agency Yonhap reported that the flight used the identification number “PRK-615”, possibly a symbolic reference to the 15 June North-South Joint Declaration signed in 2000 by the two countries.

Kim Jong-un at the controls of an AN-2 biplaneThe North’s leader, seen at the controls of a Korean Air Force biplane, is thought to have an interest in flying

Kim has also been seen using a Ukrainian Antonov-148 (AN-148), featuring state airline Air Koryo’s logo, in a 2014 documentary aired by state-owned Korean Central Television (KCTV).

Kim Jong-un’s father Kim Jong-il and grandfather Kim Il-sung avoided air travel, reportedly due to a fear of flying. Kim appears to have no such issues, and in 2015 state media even carried footage of him piloting a “homegrown” light aircraft and sitting at the controls of an AN-2 military biplane.

Kim Jong-un's train on the way to Beijing in March 2018The appearance of a green train with a yellow stripe on the way to Beijing caused a frenzy of speculation

Big train

When Kim Jong-un visited Beijing in March this year, he used a “special train” believed to be the same as the one used by his father for international travel until his death in December 2011.

Footage of the “dark green train with (a) yellow stripe” used by Kim Jong-un for his China visit went viral on China’s Sina Weibo social network at the time, sparking comparisons to Kim Jong-il’s train.

In November 2009, conservative South Korean daily Chosun Ilbo said that Kim Jong-il’s armoured train featured around 90 carriages. The train had conference rooms, audience chamber and bedrooms, with satellite phones and televisions installed for briefings.

According to North Korean news reports, Kim Jong-il died aboard his official train while on his way to an inspection visit outside Pyongyang.

Kim Jong-un and his wife Ri Sol-ju meet officials aboard the North Korean leader's trainThere’s plenty of room aboard Mr Kim’s train, but only if you are a fan of coral-coloured armchairs

Commenting on KCTV footage of the train in 2011, a source told Chosun Ilbo that the predominantly white furniture appeared to be “custom-made by foreign artisans using top-quality materials”.

Kim Jong-un’s train features similar furniture, but the sofas and armchairs now appear to be a luxurious coral colour.

State media reports indicate that both father and son used the train to hold meetings during their international visits.

Kim Jong-un stands in front of his Mercedes Benz car in BeijingMr Kim’s Mercedes did the taxi work on his visit to Beijing in March

Won’t you buy me a Mercedes-Benz?

During his visit to Beijing, Kim reportedly used his personal Mercedes-Benz S-Class to travel within the city.

According to South Korean daily JoongAng Ilbo, the car was specially transported on board the leader’s train.

The paper reported that the car, manufactured in 2010, cost roughly 2 billion Korean won ($1.8m).

Kim Jong-un's Mercedes car flanked by bodyguards at the Inter-Korean summit
 There was no room on board Kim’s Mercedes for his flock of bodyguards at the Inter-Korean summit

Kim’s favoured S-Class model was prominent during the 27 April inter-Korean summit at Panmunjom, when he drove across the border with bodyguards running alongside.

His convoy at the summit was also reported to feature a private toilet car, used by the leader to answer the call of nature while travelling.

This was also mentioned in a 2015 report by Seoul-based website DailyNK, which said that a customised bathroom is built into one of the cars of Kim’s convoy of armoured vehicles.

Kim Jong-un travels by boat to inspect island-based military unitsWith hints of Duran Duran’s Rio video, only the Supreme Leader gets a cushion on this boat

Mystery yacht

State media in North Korea has shown Mr Kim riding variously on boats, a submarine, buses and even a ski lift.

He is also rumoured to use other forms of transport, but these are yet to be seen in his excursions abroad.

When state media published photos of his visit to an army-run fishing station in May 2013, NK News observed a yacht in the background.

There was no clear confirmation that the yacht, estimated to cost $7m, belonged to Mr Kim, or even how it was imported despite international sanctions on luxury goods.

Kim Jong-un walks past a lauxury yacht during a 2013 inspection visitWho in North Korea could possibly own a luxury yacht of that size?

Given the price, however, many international media outlets singled out the nation’s ruler as the most likely owner.

In June 2015, Washington-based Radio Free Asia reported that a researcher had spotted a new helipad at Kim’s lakeside villa in South Pyongan province.

The researcher, working at the US-Korea Institute of the Johns Hopkins School of Advanced International Studies, suggested that the helipad may be used by Mr Kim’s family or visitors.

Kim Jong-un rides a ski lift at Masikryong Ski ResortKim Jong-un has a solitary cigarette while enjoying a ski lift ride at North Korea’s Masikryong ski resort
Kim Jong-un on a submarineMr Kim rides one of his navy’s elderly ex-Soviet submarines
Kim Jong-un and his wife Ri Sol-ju take a midnight bus ride around Pyongyang earlier this yearFares please: Kim Jong-un and his wife Ri Sol-ju take a midnight bus ride around Pyongyang earlier this year

Reporting by Shreyas Reddy, additional material by Alistair Coleman

Costa Rica to ban fossil fuels and become world’s first decarbonised society

Costa Rica’s new president has announced a plan to ban fossil fuels and become the first fully decarbonised country in the world.

Carlos Alvarado, a 38-year-old former journalist, made the announcement to a crowd of thousands during his inauguration on Wednesday.

“Decarbonisation is the great task of our generation and Costa Rica must be one of the first countries in the world to accomplish it, if not the first,” Mr Alvarado said.

“We have the titanic and beautiful task of abolishing the use of fossil fuels in our economy to make way for the use of clean and renewable energies.”

Symbolically, the president arrived at the ceremony in San Jose aboard a hydrogen-fuelled bus.

Last month, Mr Alvarado said the Central American country would begin to implement a plan to end fossil fuel use in transport by 2021 – the 200th year of Costa Rican independence.

“When we reach 200 years of independent life we will take Costa Rica forward and celebrate … that we’ve removed gasoline and diesel from our transportation,” he promised during a victory speech.

Costa Rica already generates more than 99 per cent of its electricity using renewable energy sources, but achieving zero carbon transport quickly – even in a country well-known for its environmental commitment – will be a significant challenge, experts say.

Jose Daniel Lara, a Costa Rican energy researcher at the University of California-Berkeley, said completely eliminating fossil fuels within just a few years is probably unrealistic – though the plan will lay the groundwork for faster action towards that goal.

“A proposal like this one must be seen by its rhetoric value and not by its technical precision,” Mr Lara said.

Oscar Echeverría, president of the Vehicle and Machinery Importers Association, said the transition away from fossil fuels in transport cannot be rushed as the clean transport market is so far undeveloped.

“If there’s no previous infrastructure, competence, affordable prices and waste management we’d be leading this process to failure. We need to be careful,” Mr Echeverría said.

But economist Monica Araya, a Costa Rican sustainability expert and director of Costa Rica Limpia, which promotes renewable energy and electric transport, said that in a country already rapidly weaning itself off fossil fuels, focusing on transport – one of the last major challenges – could send a powerful message to the world.

“Getting rid of fossil fuels is a big idea coming from a small country. This is an idea that’s starting to gain international support with the rise of new technologies,” she said.

Costa Rica’s push towards clean energy faces no large-scale backlash, in part because the country has no significant oil or gas industry.

But demand for cars is rising, as is use of other transport systems, and that may prove one of the biggest challenges in meeting the new goal, Mr Lara said.

According to data by the National Registry – the country’s records agency – there were twice as many cars registered as babies born in 2016.

Transport is today the country’s main source of climate changing emissions. According to the country’s National Meteorological Institute, 64 per cent of Costa Rica’s emissions come from energy use, and more than two thirds of that is from transport.

According to data from the State of the Region report, put together by a council of Costa Rica’s university leaders, public transport has struggled to meet the transport needs of the country.

As a result, demand for private vehicles has risen dramatically, with the car industry growing 25 per cent in 2015 alone, making Costa Rica one of the fastest growing auto markets in Latin America, according to the report.

The centre-left Mr Alvarado beat his Christian conservative rival and namesake Fabricio Alvarado, whose campaign had largely centred on his opposition to same sex marriage, with 60 per cent of the vote in second-round elections, and took office on 8 May.

Hard-line biosecurity on dirty vessels

Hon Damien O’Connor
Minister for Biosecurity
16 May 2018
MEDIA STATEMENT

New Zealand has become the first country in the world to roll out nationwide biofouling rules to stop dirty vessels from contaminating our waters, says Minister of Biosecurity Damien O’Connor.

“About 90 per cent of non-indigenous marine species in New Zealand, such as Mediterranean fanworm, Japanese kelp and Australian droplet tunicate, arrived on international vessels. These incursions harm our aquaculture industries, fisheries and native marine ecosystems,” says Damien O’Connor.

“Under the new biofouling rules, operators must prove they’ve taken appropriate steps to ensure international vessels arrive with a clean hull.

“The new rules came into force yesterday and will better protect New Zealand’s unique marine environment and other vital industries from biosecurity risk.

“Biosecurity New Zealand officers will take a hard line on vessels that can’t provide evidence they meet the rules. Divers will carry out inspections of hulls.

“Officers will also have the power to direct vessels for cleaning and order the vessel to leave New Zealand if the fouling is severe.

“Vessel operators will meet the costs of any compliance order.

“The shipping industry has had four years to prepare for the changes and ignorance of the new requirements will not be accepted.

“The definition of a clean hull will depend on vessel type and its itinerary.

“For example, the rules are stricter for vessels that are staying in New Zealand for a long time with the intention of visiting a range of ports.

“I strongly encourage all international vessel operators to make sure they know the rules before they arrive in New Zealand,” says Damien O’Connor.

Don’t lose track of rail freight limitations – David Aitken

Rail freight has its place but . . .

Rail freight has its place but . . .

OPINION: The Government has been talking about getting freight off the country’s roads and on to alternative sea freight and particularly rail freight.

Rail freight has its place and already its biggest customer is the road freight transport industry.

But it also has its limitations.

If Europe is any example, nothing much will change, despite the Government and KiwiRail’s best efforts. Trucks will always be required to deliver a large portion of the country’s freight demand.

While bulk freight can be transported by rail or sea, market demand in the freight industry will dictate how customers want their goods moved.

Since 2000 the European Union has provided policies and incentives to shift freight off the road to rail, coastal shipping and Europe’s extensive canal system.

They haven’t worked.

Road still carries about 75 percent of all Europe’s freight.

The total tonnage carried by rail and other modes has gone up but so has road freight, so the proportion each carries has remained about the same.

The market has continued to decide which form of freight to use, rather than incentives and tax breaks.

Improvements to rail infrastructure in Europe have only resulted in small increases in rail freight carried, so rail has been reluctant to make large capital expenditure, because the returns aren’t there.

The same is likely to apply to New Zealand.

Road freight will always be preferred for any perishable goods because it can carry out the task faster – apart from much more expensive air freight.

Road freight has greater service quality – quicker door to door delivery times and greater safety with less chance of damaged goods, which usually occurs when the freight is changed from one mode to another.

Even when rail or sea is used, trucks are often needed to get goods to the rail hub or sea port to start the journey and then pick them up to make the final delivery.

Highly competitive costs within the road freight sector make it more appealing to customers than the alternatives.

Road freight has flexible route choices. Rail and sea do not with only a few fixed routes.

Road freight will nearly always be used for the “last miles” as customers want door to door delivery.

Rail is only generally better when the type of goods (very large or non-urgent) can be shipped by train instead of road.

This occurs when a customer places all their business with a road freight operator who then decides the best way to ship it to meet deadlines or budget.

Improving New Zealand’s rail services and infrastructure will be taxpayer funded and subsidised. Improvements in road freight transport – newer fleet with cleaner emissions, less noise – are paid for by the trucking companies and their customers.

Rail will only ever handle a small proportion of the country’s total freight as 90 percent of road freight is done within metropolitan/urban areas where rail and sea are not an option.

With the increased investment in the rail sector, KiwiRail remain a commercial operating arm of the government, this is likely to require rail price increases to cover the investment costs, closing the gap between road and rail pricing, making the later less attractive to freight customers.

National Road Carriers is the leading nationwide organisation representing companies involved in the road transport industry. It has 1700 members, who collectively operate 15,000 trucks throughout New Zealand.

David Aitken is the chief executive of the  National Road Carriers Association

 – Stuff

Japan Catches Up With Shipping Consolidation

Japan has caught up with a wave of consolidation sweeping the shipping industry, with its three biggest carriers merging their container operations to compete with bigger rivals in Asia and Europe.

Mitsui O.S.K. Lines (MOL), Kawasaki Kisen Kaisha Ltd. 9107 1.20% , (K-Line) and Nippon Yusen Kabushiki Kaisha NPNYY -0.23% (NYK Line) pumped $3 billion into the merged company called Ocean Network Express (ONE) that kicked off operations last month as the world’s sixth largest container operator, with a combined fleet of 230 vessels.

“A large company buys a small company and grows bigger, such deals have been repeated in the past, but this is the first time (in shipping) that three companies jointly start a new business on an equal footing,” Junichiro Ikeda, MOL’s chief executive, said in an interview.

MOL is the leading partner in ONE.

ONE controls close to 7% of global container market, well below the double-figure shares of the top three carriers, Denmark’s Maersk Line, Switzerland’s Mediterranean Shipping Co. and France’s CMA CGM SA.

Container shipping moves roughly $4 trillion worth of manufactured goods annually, from designer dresses to electronics, food and heavy machinery.

But a glut of tonnage in the water and vicious price wars have pushed freight rates well below break-even levels over the past few years, sinking most operators deeply into the red and pushing some out of business.

The crisis pushed the fragmented industry to consolidate, with the world’s 20 biggest operators shrinking to seven over the past three years that control about three-quarters of total container capacity.

It also triggered a reckoning among policy makers in many countries, from Germany to Japan, that have seen commercial shipping as a key strategic asset for their economies. The failure of South Korea’s Hanjin Shipping in 2016 sent shock waves around the world and particularly in Seoul, where the world’s eighth-largest container line was considered an important cog in the country’s export-driven economy.

People involved in the ONE merger told The Wall Street Journal it was seen as a must, as carriers with a 3% share or below are expected to go out of business or swallowed up by bigger players.

Although still small in global terms, ONE is dominant in intra-Asia trade lanes and is the biggest player in moving Asian exports to the U.S. across the Pacific, with a 16% market share, according to maritime data provider IHS Markit . It also controls 37% of container capacity in and out of Japan, the world’s third-largest economy.

“I think future trade will grow mainly in these regions, and the market share (that) ONE holds is never small,” MOL’s Mr. Ikeda said.

He declined to comment on the impact of possible trade tariffs in talks between the U.S. and China.

Consolidation gives shippers fewer carriers to choose from and some may move away from ONE to other operators, but Mr. Ikeda insists he isn’t worried.

“If you focus on the services that come to and go from Japan, our competitors are totally incomparable with us,” he said. “In terms of frequency…. ONE is superior. Therefore, even if customers seek choice desperately, they don’t have much of a choice.”

ONE, which set up its headquarters in Singapore, launched operations April 1 to a rocky start. Brokers and freight forwarders said shippers in the first 20 days of operation faced problems booking cargo slots and communicating with the carrier.

The carrier said the problems were the result of setting up a new IT system and difficulties moving staff from the three partners to new offices around the world.

“It was surprising and disappointing, given the high efficiency records of the three carriers before they became ONE, but the situation is slowly improving,” a Singapore broker said.

Mr. Ikeda said it would take time for the former rivals to fully integrate.

“Although all of them are Japanese companies, there are differences in doing things among them,” he said. “Their mutual understanding has deepened during the preparatory period, but I consider it to be a big challenge to unify the way to conduct business in a real sense.”

The operators have a deep reach into global trade, from consumer goods to raw industrial commodities.

MOL on its own is the world’s biggest natural gas carrier, operating 76 ships out of a total global fleet of 440 vessels, and plans to add another 19 LNG carriers to its fleet over the next few years.

In container trade, ONE is part of THE Alliance, one of three major shipping groups that also includes Germany’s Hapag-Lloyd AG and Taiwan’s Yang Ming Marine Transport Corp.

Alliance members share networks, ships and port calls, saving billions of dollars each year in fuel, port handling and other expenses. They are using giant ships that can move more than 20,000 containers.

THE Alliance already has six such vessels and plans to order six more by the end of this year, despite concerns that the behemoths may exacerbate overcapacity and add pressure to freight rates.

Mr. Ikeda doesn’t expect a flood of new orders because carriers expect only moderate growth in shipping demand, and “everyone understands the situation that way.”
Source: Wall Street Journal