The Resurgence of Coastal Shipping

New Zealand coastal shipping has gone through a once in a generation shift, with multiple new ships coming onto our coast. This remarkable turnaround follows decades of official neglect of New Zealand shipping which pushed the industry to the brink of survival. Major disruptions in global shipping provided a wake up call in the last two years with massive disruptions affecting the New Zealand supply chain. Industry and unions helped develop a positive new policy with the Labour Government that has led to a resurgence for New Zealand shipping.

Minister of Transport Michael Wood announced on 24 May the Government had committed $30 million of funding for coastal shipping funding through the National Land Transport Programme (NLTP) to improve domestic shipping services, reduce emissions, improve efficiency and upgrade maritime infrastructure.

Waka Kotahi worked with the wider freight industry to select four applicants for co-investment in new and enhanced coastal shipping services.

The four successful applicants were Coastal Bulk Shipping Ltd, Move International Ltd, Swire Shipping NZ Ltd and Aotearoa Shipping Alliance.

Swire, the owners of Pacifica, will introduce an extra container vessel later in 2022 to supplement their existing ship Moana Chief, which has been the only

THE RESURGENCE New Zealand flagged and crewed coastal OF NEW container ship in service for some years. Move Logistics is planning a ro-ro vessel service between New Plymouth and Nelson which is due to come into service in 2023. ZEALAND COASTAL

SHIPPING In addition to the four operators who received funding support, global shipper Maersk have announced a new dedicated New Zealand coastal service, Maersk Coastal Connect, with two New Zealand crewed container ships starting on the coast in July 2022. Two 2500 TEU capacity vessels, Maersk Nadi and Maersk Nansha, will call at Timaru, Lyttelton, Nelson, Auckland and Tauranga. Training a new generation Maritime Union National Secretary Craig Harrison says the big lesson from the last two years is New Zealand needs its own shipping capability that will provide resilience and reliability in a volatile global situation. He says the next goal for the Maritime Union is working with industry, Government and training providers to build opportunities for young New Zealanders wanting a career in the maritime industry. The failure of past Government’s to have a coastal shipping plan meant that New Zealand has an ageing maritime workforce, with few young people entering into the industry. This situation is now being addressed to build a pathway to train a new generation of New Zealand seafarers. Shipping helps the environment Coastal shipping has also been recognized as a central part of our transition to a low carbon economy. Transport generates a vast amount of greenhouse gas emissions and contributes to the climate crisis that threatens our collective future. Coastal shipping is a low carbon emission transport mode, and will be a leading way of

reducing New Zealand’s carbon emissions.

When the new shipping services are fully operational, the Government estimates they will remove around 35 million kilometres of truck travel from New Zealand’s roading network every year. That means cost savings, less pollution, and safer and less congested roads. A long struggle The Maritime Union has been fighting a long battle to bring back coastal shipping to its rightful place as a key transport mode for New Zealand, following decades of ideologically driven attacks on New Zealand shipping and seafarers.

The sale of the New Zealand Shipping Corporation by the Fourth Labour Government in the 1980s was followed by the 1994 “open coast” policy of the National Government, which permitted overseas flagged ships to carry cargo between New Zealand ports.

Overseas vessels faced far lower overheads than New Zealand operators, with poor wages, conditions and health and safety for crew. Many of these foreign operators pay little or no corporate tax globally, paid no New Zealand tax, and more recently were exempt from emissions charges.

The result was an attrition where the New Zealand merchant fleet was reduced over time to a small fraction of its former size.

This situation was compounded by the removal of the two Silver Fern Shipping New Zealand coastal oil tankers this year following the closure of the Marsden Point oil refinery.

However, this dependence on overseas shipping eventually resulted in a nasty shock to New Zealand business. The recent COVID pandemic led to major global disruptions to shipping. Freight rates rose steeply and service reliability plunged due to a global undersupply of shipping and disruption to global ports. Major delays were experienced with exports and imports, and many shipping services simply dropped off scheduled calls to regional ports with little notice.

New Zealand’s status as a remote and small maritime trading nation, at the end of long supply chains, made us uniquely vulnerable to these problems. The situ-

ation was compounded by the Russian invasion of Ukraine in 2022, which resulted in further disruption to international shipping.

As a result there has been growing recognition of the need for a national supply chain plan, and the return of New Zealand coastal shipping. Further debate is now taking place around the need for a national ports strategy to work in with coastal shipping.

These changes have led to the current remarkable turnaround of the shipping industry, and a great future for New Zealand seafarers.

The Maersk Nansha

Credit: Byron Cummings