Editorial: A gain for Nelson as Timaru's port loses

Last updated 13:00 13/07/2012

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OPINION: Just under 600km south-east of here, they are preparing for a hefty fire-sale. PrimePort in Timaru shelled out $22 million for its container cranes 10 years ago. One global corporate boardroom decision later, and the gear is surplus to requirements. The two large cranes, in good working order, are to go on the block.

Shipping line Maersk's decision to drop Timaru from its New Zealand schedule spells the end of PrimePort as a container port, and exporters there will have to deal with Lyttelton or, perhaps, Port Chalmers in Otago. It's a huge loss for South Canterbury – and this region can feel mightily relieved that it is not facing a similar blow from the Copenhagen-based container giant.

Instead, there is something for the region – and in particular its exporters – to celebrate. Maybe. Though Maersk is dropping its trans-Tasman service, another global carrier, MSC, operates a weekly service to Australia, with Nelson part of that run. Meanwhile, the Danish conglomerate has added Nelson to a weekly service linking five New Zealand ports with Singapore and Tanjung Pelepas in Malaysia. Other New Zealand ports on this run are Tauranga, Wellington, Lyttelton and Port Chalmers.

With New Zealand's economy increasingly linked to Asian markets, the ability to directly enter important freight hubs in the region is significant for Nelson exporters. A downside is that Maersk has apparently signalled that its decision to stick with Nelson might well come at a cost, with increased shipping charges likely. How much can be passed on in ultra-competitive markets remains to be seen.

Maersk had signalled it was revising its schedules, and it was subject to concerted overtures from Port Nelson and larger exporters to retain a Nelson link. They will be well aware this week's reprieve is no guarantee for the future, and the container ships will only come while it is profitable for them to do so.

The decision-makers in global boardrooms are unlikely to know where Nelson is let alone care about the impact of their decisions on local communities, and their responsibilities are solely to their business' bottom lines.

PrimePort has not been helped by the Government's rail freight subsidies. They prompted Fonterra three years ago to opt to send its export milk powder and cheese from South Canterbury factories to Lyttleton by train. That's an option Nelson exporters don't have – making Port Nelson critically important to primary producers. Of course, the port's role in the Nelson economy is vital to more than our main exporting industries – seafood, forestry and horticulture – and as an imports-exports gateway.

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The port company this year announced a special dividend of $4m to each of its shareholders, the Nelson city and Tasman district councils. This followed an annual payout of $4.2m to the councils in October, a strong result in the face of a continuing global downturn. So the port remains a cash-cow for the two councils, and its continuing health is of critical importance to ratepayers. Timaru loses then, while Nelson gains – but let's celebrate rather than gloat. It's a tough world, and freighters' schedules are based more on actual volumes than promises.

- © Fairfax NZ News

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