Is NZ-Flagged Coastal Shipping Back? What it Means For You

4-minute read

In March, the Government unveiled its Government Policy Statement on Land Transport (GPS 2021) outlining plans to invest $54 billion in a range of transport initiatives over the next 10 years.

Making the announcement, Transport Minister Phil Twyford said: “Given how both rail and coastal shipping help take pressure off our roads and produce less emissions, we are looking to fund both in GPS 2021.”

The Minister’s words have a familiar ring. Every few years, over successive governments, the topic of revitalising our coastal shipping has reared its head.

Reports are commissioned, working parties convened and then it’s quietly shunted off into the ‘too hard basket’. So, the devil is in the detail, how much of that GPS 2021 pot is earmarked for coastal shipping?

According to a recent webinar by the Minister, the initial plan is a $45 million over three years — to include funding relevant research to see what future support for the sector will help achieve the Government’s aims.

A report has recently been prepared — by Ernst & Young; The externality value of coastal shipping report to the Ministry of Transport — and makes interesting reading, particularly the section on ‘findings’.

In a nutshell, it concludes, for coastal shipping to be successful, you need to get trucks off the road, to reduce congestion and increase the value of the proposition – and to do that you need to have New Zealand flagged ships providing coastal shipping.

Most coastal shipping in our waters travels on international vessels. We currently only have one NZ flagged coastal shipping operator in this country.

Using international vessels is cheaper but leaves us at the whim of international schedules and we know that, when the going gets tough, the big ships don’t call as often.

A very good opinion editorial on this topic, by Joe Fleetwood, National Secretary of the Maritime Union of New Zealand, featured in Stuff in early July.

To quote Mr Fleetwood, recovering our coastal shipping industry after it was ‘gutted’ in the 1990s requires “government intervention, money, diverging the hands-off approach of the last 30 years and legislating in the national interest.

It means ruffling a few feathers among the minority of interests that favour the status quo”. Mr Fleetwood points out that, ultimately, no Government over the past three decades has had the stomach to push for action beyond the reports and working parties and policies.

Can this Government be the one to finally translate reports and policy into action? Very possibly, to achieve that, we need to take the politics out of the topic.

Is NZ-Flagged Coastal Shipping Back? What it Means For You___

 

I’d personally like to see a national coastal shipping committee established, with committed funding for a ten year period, protected from the vagaries of political change — to drive the decisive series of actions that are needed once and for all.

As Mr Fleetwood also pointed out, it would make sense for this to work towards a ‘hub and spoke’ model with at least one hub port in each of the North and South islands, for the big international vessels to call in to, with NZ flagged coastal shipping moving the cargo to all other ports.

Such models are already working very effectively elsewhere in the world, including Europe and China. There is no reason they could not work here.

To return to the Ernst & Young report, the core findings were that coastal shipping provides demonstrable value to road users — and wider society — in the form of “reduced negative externalities”.

If coastal shipping were not available it is estimated that $306.4 million per annum of externality value would be lost. This is largely made up of $229.7 million in reducing congestion on roads; $52.9 million in safety benefits and $23.8 million in net environmental benefits.

The report also notes that: “It is clear that the presence of an effective coastal shipping network enables the movement of freight to continue through times of disruption (as was experienced through the Kaikoura earthquake(s)).

It is acknowledged that this may not be possible for all types of freight, but in general, the presence of coastal shipping certainly provides greater resilience to the transport system as a whole.”

If our coastal shipping system in its current ‘gutted’ condition is already delivering those benefits for New Zealanders, imagine what a revitalised, restored, vibrant NZ flagged system could achieve.

Coastal shipping shouldn’t be a political football that’s bounced around when it’s in vogue and kicked into touch when it isn’t.

$45 million is a good start, but it must only be the start and we need to see a clear plan set out swiftly, way beyond those initial three years, with a clear vision about how we are going to restore our coastal shipping, how and where the infrastructure required for that will be provided and the timeline for achieving that.

SOURCE: Chris Edwards, President, Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF)

P.S. Easy Freight Ltd helps New Zealand importers & exporters to save money on international freight and reduce mistakes by guiding how to comply with Customs and biosecurity rules. 

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