Ports of Auckland interim profit up, weighs freight hubs in South Island

Some shipping lines have already left New Zealand waters, resulting in lower volumes.

Some shipping lines have already left New Zealand waters, resulting in lower volumes.

Ports of Auckland is looking to extend its North Island freight hub to the South Island, like its rival Port of Tauranga.

The port produced an interim net profit of $31.6 million for the six months to December 31, a 9.5 per cent increase, despite falling revenue and container volumes.

Revenue was down 2.2 per cent and container volumes fell 3.3 per cent.

The port was able to defer maintenance and save costs, but its chief executive Tony Gibson warned that the situation would likely continue and would affect the full-year result.

He said the period had been "anything but plain sailing".

READ MORE: Port of Tauranga shrugs off fall in half-year profit

"Global trade trends and shipping changes have affected container volumes, while China's slowdown has impacted bulk volumes, particularly iron sand exports," he said.

As a result revenue had fallen slightly, but profit was up due to lower costs, "largely as a result of the timing of repairs and maintenance."

Container shipping lines had been subject to intense competition in the New Zealand market and the significant over-capacity had resulted in unsustainable freight rates.

Some shipping lines had also decided to leave the New Zealand industry, which had contributed to a decline in volume.

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"Our strategy is to ensure we offer the best service possible and keep our costs low," Gibson said.

"To that end we are looking at automation to help increase capacity and reduce on-port costs and we are building a freight hub network to squeeze costs out of the supply chain."

Gibson said Ports of Auckland continued to build inland freight hubs at Wiri and in the Bay of Plenty, and in January it signed a conditional agreement to purchase land for a Waikato freight hub.

The hubs would help it balance the flow of freight in and out of Auckland, reducing the number of empty containers.

"We now intend to consider whether there would be benefits to extending our network to the South Island, whether it would strengthen our position and benefit New Zealand importers and exporters through more competitive supply chain arrangements, he said.

The end was looming for an expansion of the 20-year old Fergusson container terminal, which was likely to be finished in 2017, giving the terminal a third berth capable of handling the new generation of big ships.

Auckland Council had set up a stakeholder group to ponder the port's long-term location, and the port would release more waterside land through the sale of the Onehunga port when the Holcim cement handling operation moved from Onehunga to Waitematā this year.

 - Stuff

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