Benefits of shipping:
Resilience for natural disasters or emergencies.
Ships carry hazardous / dangerous cargo more safely than road, rail and air.
15% of New Zealand's inter-regional freight is carried by sea
Ships can handle oversized, heavy and bulky cargo that road, rail and air can't.
Freight volumes are forecast to increase 50% by 2040.
It won't all fit onto our roads!
New Zealand’s total freight task: 278.7 million tonnes.
Coastal shipping carries approx 10 million tonnes (3.5%).
1.15m people are transported across the Cook Strait every year
The volume of domestic freight moved by shipping has increased 50% over the last 10 years.
Approx $28 billion road and rail freight is shipped between the North and South Islands each year
1 standard container Auckland to Christchurch:
road: $2200-$3000
rail: $1300 - $1900
ship: $850 - $1300
418,470 containers are moved around the NZ coast per annum
Shipping: one-eighth the emissions of road per tonne of freight moved
Benefits of shipping:
Lower emissions per tonne of freight moved.
Increasing total freight carried by ship by just 2% would reduce total transport emissions by 16%.
Benefits of shipping:
Greater control over our domestic supply chains.
Shipping: 60% the emissions of rail per tonne of freight moved
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Speech to Transport Infrastructure Summit (2015)

Delivered by Annabel Young

Auckland, 5 August 2015

I want to start by briefly describing the Federation. We are a representational body comprising the major ship operators working on the New Zealand coast and we have been doing that since 1906.

In general terms, Federation members operate SOLAS ships, that is, ships that are in excess of 500 gross tonnes, exceed 45 metres in length and are required to comply with IMO international safety regulations known as Safety of Life At Sea or SOLAS.

Members of the Federation:

  • Comprise the virtual bridge across the Cook Strait, joining together the road and rail routes in the north and south islands carrying freight and passengers;
  • Carry fuel oil around New Zealand to where it is needed so it is there when you want it;
  • Carry cement to where it is needed and when it is wanted;
  • Carry containerised cargo and loose cargo around New Zealand and also feeding cargo in and from ports of importation or final embarkation from New Zealand
  • Reposition empty containers from net-import ports to net-export ports
  • And NIWA provide a significant contribution to research in New Zealand.

The Federation itself is a small body. Our aim is to assist in the development of policy where the maritime or sea option has an important contribution to make. We also take an interest in the local implementation of International Maritime Organisation regulations to ensure that regulation is as efficient and effective as possible.

So what we want is not really surprising:Sound regulation of ship operations so that we have:

  • Secure transport links
  • Safe shipping for those who work on or with ships as well as people who share the water
  • Clean shipping in terms of preserving the quality of our water and our aquatic environment
  • Skilled shipping so that we have best practices and, importantly, comply with International Maritime Organisation standards
  • And all while contributing to the strategic infrastructure of NZ Inc

We want regulation that is best practice at least cost. As a sector, we fund our own regulators and it is reasonable to want value for that funding.

Have you ever had one of those conversations where you despair because some city children don’t realise where milk actually comes from? The sort of conversation where we remember a golden era when Kiwi kids either lived on a farm or visited a farm in their holidays. Children knew where milk came from because they had seen a cow being milked. In reality this is a slightly rosy-tinged view of the past. And what does it matter anyway, so long as children still drink their milk.

Ship operators sometimes have the same sort of conversations. Remember the golden, olden days when people could walk onto a functioning wharf with limited security and possibly not even gates. Remember when you could see actual cargo being loaded or unloaded, even in nets. My mother often told me that, during World War 2, military ships would arrive and depart Wellington harbour without notice and she felt so much safer on days when the American ships were in port. There was a real understanding about how ships connected to daily life.

But nowadays, access to ports is tricky with security and, in some cases, random drug tests. Nowadays, people seem a bit disconnected from the supply chain. They see goods in shops, they order goods over the internet but there is a disconnection between local purchase and the supply chain. People complain about trucks on the read but still expect the goods carried by those trucks to be readily available.

So city kids may not know where milk comes from but the government certainly knows (although I sometimes wonder whether they think the milk comes from Fonterra rather than from cows). Shoppers may not think about the infrastructure that made their purchase possible but does that matter? AS with milk, the more important question is whether policy makers understand how the transport infrastructure works.

I am going to suggest today that a lack of understanding about the supply infrastructure is wide spread even to the decision-makers in central and local government. Using (ironically) squeaky wheels as the basis of transport policy, means that the parts of the system that are not demanding attention, tend to be taken for granted. There seems to be limited understanding that the coastal shipping infrastructure is a strategic asset within the overall transport infrastructure. As a strategic asset, it needs to be valued and made central to decisions that affect it.

In the case of coastal shipping, as far as I am aware, no policy-maker ever asks what if the current providers failed? Because that question is not asked, the follow-up question is also not asked: how do we ensure that coastal shipping survives and thrives?

My starting point is that the cheapest and most environmentally friendly route between two points in NZ is often via ship. As luck would have it this idea appears to be accepted across political parties but there hasn’t been a coherent strategy for ships as a mode of transport since the Labour Government produced Sea Change in 2008. That document, by the way, the Federation sees as largely based on its own work on strategy published in “Roadways to Waterways”.

A thriving coastal shipping sector is a vital part of NZ’s infrastructure, even beyond transport. It directly employs over 1000 on-board ships with significant numbers of on-shore staff. It is also fundamentally important to the existence of the maritime education providers and (with the Cook Strait operators) tourism. It ensures we have petrol and building supplies where we want them, when we want them.

Speaking personally, as a Wellingtonian, I expect (or maybe just hope for) ships to come to the rescue when all else fails if/when there is a “big” earthquake close to home.

Since the 2008 government strategy known as “Sea Change”, some things have changed.

  • The on-board workforce is rapidly aging. This is not something that can be fixed easily or quickly as the requirements for both skills and experience take time for each individual seafarer to acquire. Qualified staff are an international resource so we are competing on an international market with supply and demand reflecting world-wide ebbs and flows in shipping.
  • The profitability of ship operations, world-wide, is suffering in line with the economic problems in the world at present. This has a flow-on effect on New Zealand which is exacerbated by the international ship operators marginally pricing their operations around the New Zealand coast.
  • I believe that there are natural limits to how much can go by road. At best, roading is an expensive option albeit that it is flexible (not the roads, I am referring to the flexibility of adding a truck). It is also environmentally questionable on trips where there is a financially and environmentally effective option.
  • Which brings me to the changing approaches to sustainability and environmental factors. In 2008 these were considered but they are now core values.
  • Lastly, under this heading, I want to mention the approach to NZ flagging of ships. There is no government policy to encourage this in respect of locally based ships. Nor is there any government policy to make NZ a centre of excellence that is an attractive option for the flagging of ships operating outside the NZ coast.

But I want to come back to the consequences of a lack of interest or understanding about the transport infrastructure that is part of the supply chain in New Zealand.

I have a concern that some port companies are seeing property development as a route to achieving their financial goals. This implies that the financial goals are set independently from their core purpose which is to provide a port. It shouldn’t need to be said but let me say it anyway: the reason ports companies exist is to be ports and provide port services. They have considerable land at their disposal and the successful ones understand this and are intent on protecting the land they have as well as acquiring more.

As a representative of ship operators I need to let you know that ports can only operate when they have sufficient space available for port services. Those are services that operate 24/7/365 days of the year with lights, noise and vibration all of which imply there needs to be some space between the ship operations and any incompatible activity. Space is also needed to hold and organise cargo prior to loading and after it has been off-loaded.

Many ports appear keen to host bigger ships. Well, bigger ships need deeper berths and channels. They also require more dockside space because the incoming and outgoing cargos are bigger.

I am asking you to look at transport as an infrastructure akin to a three legged-stool. The stool needs all three legs to work properly. Transportation by road, rail and sea is interdependent. I am not advocating an anti-rail or an anti-road position. I am saying that policy makers need to consider all three legs of the stool. This applies in central and local government.

Recent examples of policy-making without expressly considering the effect on or role of ship operations include the consideration of the effects of bigger international ships and the cost of changes to the rules on environmental credits. I don’t know whether the policy outcomes would be different if ship operators had been consulted. I do know it is a poor process when central players such as Federation members are not given the opportunity to contribute.

Coastal ship operators would like to have seen more emphasis on our sector in the Briefing to the Incoming Minister after the last election, so that he was made aware of the opportunities that exist. One look at the map of New Zealand tells you that ships are a vital part of the economic and social fabric of this country. Is there a government blind spot due to the lack of problems caused by coastal shipping? Is it the result of not asking for government funding?

The Federation is asking for policy makers to pay attention to the opportunities that can be realised by having a genuine intermodal approach to transport. Solutions that utilise sea, as well as road and rail, could be environmentally better and cheaper. At the very least, a cheaper solution should be something that attracts the attention of Treasury.

When I was the Chief Executive of Federated Farmers, arguably the most successful lobby group in New Zealand, one thing impressed me above all else.

There are an enormous number of organisations representing different parts of the rural scene. Considerable effort is invested in building and maintaining personal relationships across the different organisations so that we were all able to pick up the phone if there was a problem. We knew each other and on that basis considerable trust also grew. Even where we disagreed, and there was a fair bit of that, we could work together.

I want to suggest to everyone here today that it is worth making a similar investment across the transport sector. That means across government as well as across the private sector. Building relationships isn’t just about feel good factors. It is about making sure that the right skills and knowledge is brought to bear to solve problems, or even better, stop the problems occurring in the first place.

I will finish by inviting everyone to think about the map of New Zealand. Sir Geoffrey Palmer once famously described New Zealand as “a very pluvial place”.

New Zealand is also a very coastal place, an island nation. The main islands have big mountains running down their spines. If ever there was a place for coastal shipping to be a solution, it has to be (as Taylor Swift would say) “right here, right now”.