$6m body blow to Timaru Port

Last updated 05:00 11/07/2012

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PrimePort is set to lose a third of its revenue following the announcement global container lines Maersk and Hamburg Sud will withdraw their Timaru service.

The service will now operate direct to Napier from Otago, the change taking effect in mid-September, slicing $6 million from the port company's annual revenue.

The move is expected to affect many of the 55 staff and 30 casual workers, but PrimePort chief executive Jeremy Boys said it would take "several weeks" before a plan was put together for consultation.

He acknowledged it would also impact on the region's exporters, "whose path to America and Europe will certainly not be as direct".

He said the announcement was a reflection of dairy giant Fonterra's decision three years ago to direct most of the region's cargo to Lyttelton, near Christchurch. The government's investment in rail had also had an impact.

"In recent years we have challenged the wisdom of creating dependencies on fewer container ports, especially given the heightened infrastructure risk that was surely demonstrated by the Christchurch earthquakes.

"It will be for the future to determine whether exporters will retain the same security and efficiencies."

Decisions on infrastructure at the port as a result of the withdrawal would be considered in the coming weeks.

"We've only known this information for the past 24 hours," Mr Boys said yesterday. "It will take several weeks to work through a plan."

However, he remained confident in the port's future.

"The outcome does not impede PrimePort's clear direction as a break bulk port.

"Without containers [PrimePort] will be as strong as before with even greater potential to develop opportunities."

Timaru District Council's commercial arm, Timaru District Holdings, has a 71.4 per cent shareholding in PrimePort.

In 2007, container capacity was reduced by 60 per cent when two direct weekly services from Timaru using ships with capacity of around 2500 containers were replaced by a single service with a capacity of 1000 containers.

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- © Fairfax NZ News

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