Employment is set to increase at the Port of Timaru after the announcement of a new shipping deal.
PrimePort chairman Roger Gower said the 10-year deal between Port of Tauranga, which owns half of PrimePort, and Kotahi, a freight and logistics management firm, was positive news for the company and the region, and would lead to job creation.
Meanwhile, Kotahi, a joint venture between Fonterra and Silver Fern Farms, launched in 2011, has struck its own 10-year deal with major shipping line Maersk.
Both deals begin on August 1.
"It is a very important day for PrimePort," Gower said.
"There will be increased requirement for pilotage and tug and activity in general for staff. Combine this deal with the imminent Holcim development, the level of activity will be more than we anticipated."
Gower said it proved the bold business decision to enter a strategic partnership with Port of Tauranga.
The deal was not known about when the retraction of job restructuring was made last week, he said.
The deal, along with Swiss cement company Holcim announcing earlier this week it would begin construction of a 30,000 tonne import terminal in Timaru in August, is a turnaround in the port's fortunes.
In 2009 Lyttelton did a five-year deal with Kiwirail to win the contract with Fonterra to export much of its dairy products from Clandeboye through Lyttelton instead of Timaru.
Maersk Line New Zealand managing director Gerard Morrison said it would probably start shipping in Timaru again.
However, the details were still being fine-tuned, he said.
Port of Tauranga corporate services manager Sara Lunam said the impacts on South Canterbury would be huge, including job creation and opening of services to more overseas ports.
"The levels of activity will be greater than 2008 levels [when it peaked in Timaru]," she said.
Lunam could not quantify the exact amount due to commercial sensitivity, but in 2008 Timaru's container terminal had 80,000 TEU (twenty-foot equivalent units) moving through it.
She said the deal dramatically changes the landscape of New Zealand's supply chain.
"It makes sense, with Fonterra being just up the road."
Lunam said until the investment Port of Taurange had made, it was considered New Zealand exports might have to go through an Australian hub.
"This would increase transit time by seven to 10 days. When you are talking about primary industries this is a massive increase," she said.
In December 2013, Port of Tauranga bought the container terminal operations from PrimePort Timaru.
The move was made after a shipping deal was done by container companies, including Maersk, to reduce the number of ports being utilised in New Zealand, resulting in numerous jobs being lost over the past three years.
- The Timaru Herald