Shipping line Maersk withdraws Port Nelson direct service

  • 26-Dec-2018
  • Shipping line Maersk withdraws Port Nelson direct service

It's still smooth sailing for Nelson container customers despite a major shipping line discontinuing its direct service to its port, Port Nelson says.

Maersk's Northern Star service between Tanjung Pelepas, Malaysia and Auckland previously called directly to Nelson for freight services, one of four shipping lines calling in to the city.

However, Maersk announced an end to the stopover in late July.

Container traffic shipped through Nelson now went via a feeder service to Tauranga with the Pacifica line to meet onward connections to Asia, the Americas, Pacific Islands and Australia.

The move is understood to be in line with a global trend within the shipping industry to use larger vessels in most trades to reduce costs, following heavy financial losses in recent times. 

Customs Brokers and Freight Forwarders Federation of NZ executive director Rosemarie Dawson said New Zealand was over serviced in terms of the number of ports it has relative to market size.

Due to the high costs involved in port visits, carriers were looking to reduce the number of calls they made.

Nelson was one of the smallest ports with the least volume and was heavily reliant on export cargoes, unlike other ports which had a more balanced trade in terms of imports, she said.

Nelson also has a relatively shallow draft – the vertical distance between the waterline and the bottom of the hull which determined the minimum depth of water a ship or boat can safely navigate – which posed operational issues for carriers wanting to bring in bigger vessels.

Several businesses are understood to have been adversely affected by the loss of Maersk calling directly, with one business owner saying the issue was "a huge problem" for the city.

Relying on containers coming from Australia and South America – the owner said the loss of Maersk's direct line had resulted in infrequent arrivals causing disruption of the supply chain if the product turned up in the wrong order or delayed.

"The big shipping companies seem to be by-passing Nelson and they haven't got their act together with coastal shipping to replace that in time – that's creating mayhem with our containers, so instead of them coming in 10 a week - we don't get any, then we get 50.

"It's nothing, then a whole stack of containers, then you've got the demurrage costs associated with that and our people having nothing to do, followed by going flat out and having to put in a whole lot of overtime."

Maersk Line Oceania trade and marketing director Hennie Van Schoor said with the trend of continuously declining ocean freight rates, the company was constantly reviewing the efficiency of its network for serving the New Zealand market.

 A key consideration was the long distances to main centres and multiple local port calls in NZ when compared with internationally competing markets such as Australia, South Africa and Brazil.

The removal of the Northern Star service and a vessel upgrade on the Southern Star service had met the necessary capacity required for its customers, he said. 

"In the case of the Northern Star and Nelson, the specific draft of this port has previously prevented us from upgrading our vessel size." 

Port Nelson chief executive Martin Byrne said prior to the Northern Star pullout, Nelson's container needs were serviced by Maersk, ANL, MSC and Pacifica, with CMA CGM stopping in during the fruit season between March and September to collect mainly kiwifruit and wine cargo.

He anticipated the port would be back to four weekly container services by March. In the meantime, exporters still had access to a number of trans-shipment and direct options, despite Maersk's departure.

Byrne said the additional announcement of a $29 million investment in the Main Wharf North and a new tug to accommodate larger container vessels demonstrated the large contribution container freight made to port operations.

"We wouldn't be spending that money if it wasn't needed," Byrne said.

The Port's 2018 annual report stated total cargo volume of 3.6 million tonnes was well up on the 3.1m reported in 2017, while container volumes grew a further 10 per cent in the last 12 months, from 108,000 to 121,483 total equivalent units.
Total vessel visits had also increased from 805 to 887 in the last 12 months.

"I suppose it's a balance for the shipping lines and as the vessels get bigger," Byrne said. "And we've said it for a long time there's that mix between direct services and trans-shipment feeder services through the likes of Tauranga.

"The actual number of shipping options hasn't reduced, even though the number of direct calls has."

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