KiwiRail denies Fonterra 'deals'

KiwiRail has hit back at Federated Farmers claims that it contributed to the loss of container trade at Timaru.

South Canterbury president Ivon Hurst has blamed KiwiRail for the loss of container trade. His comments came yesterday after global container lines Maersk and Hamburg Sud announced they would withdraw from Timaru in September

Mr Hurst asked why KiwiRail was handing Fonterra everything it wanted on a publicly subsidised silver platter and consequently affecting Timaru's port.

KiwiRail freight manager Iain Hill said Mr Hurst's claims were inaccurate and misleading.

"KiwiRail is disappointed in claims that we are ‘handing Fonterra everything it wants on a publicly subsidised silver platter'."

He denied any "special" deals with Fonterra.

"Our relationship with them, as indeed with all our customers, is an appropriately commercial one.

"As a line-haul provider, KiwiRail moves what we are contracted to by our customers at commercial rates; our pricing decisions are based on the volumes carried and the costs incurred in performing services for our customers, which invariably reflect the distance travelled by rail.

"Our assumption is that Fonterra's decision sometime ago to export products via fewer sea ports was based on the end to end costs and efficiencies across their entire supply chain, and not simply the domestic leg within New Zealand."

He said it was KiwiRail's role is to move with the market by providing the capacity the market demanded at a sustainable price.

"It is for our customers to decide where they will route their product and we will be the beneficiaries of those decisions if we are efficient, effective and competitive.” Mr Hill said.

The Timaru Herald