Venkat Raman –
The recent decision of the Governing Body of Auckland Council to support a compromise proposal to proceed with construction of one wharf extension and put the other on hold has brought temporary relief to the Ports of Auckland.
Chief Executive Tony Gibson described the decision as ‘a compromise.’
“It is not our preferred outcome because of the impact on the cruise industry. However, it is a pragmatic, workable solution to the current problem. It allows the port to continue to handle Auckland’s growing freight needs in the short term, while the long-term of the port is debated,” he said on April 30, 2015, soon after the Council announced its decision.
Building continues
Under the proposal, Ports of Auckland will continue building the eastern extension (B2) but put on hold construction of the western extension (B3) until after the Port Future Study is completed. This proposal addresses a number of community concerns, especially around sight lines from Queens Wharf, while providing sufficient berth space for current freight needs and growth in the immediate future.
In an article published on March 31, 2015, Mr Gibson said that the original plan of the Ports of Auckland was reclamation of 23ha and 250 meters extension into the harbour.
“There were howls of rage and calls for us to think again, to come back with something smaller. We listened. Now we have got it down to 3ha and under 100m; about 90% less reclamation and 60% less extension,” he said.
Ongoing troubles
Mr Gibson said that the Ports of Auckland has resource consent for two wharf extensions, and enabling work has started.
He admitted that there was no consent for reclamation.
“That is a separate process and we will not apply for consent until the Unitary Plan becomes operative. Any application will be publicly notified and there will be extensive consultation. Our efforts to minimise our impact are not enough for some. Now there must be no expansion and there are calls to move the port, somewhere, anywhere, just not where we can see it. Make it someone else’s problem,” Mr Gibson said.
Fierce competition
While increasing population, higher levels of income and globalisation have created massive demand for goods and services, fierce competition is beginning to create serious inroads into the profitability of most companies.
The above is true of the shipping industry, comprising a host of players, the most important of which are freight forwarding agents, exporters and importers and providers of allied services including insurance.
“There are immense opportunities for growth but constricting cash flow, restricting on trade finance and unhealthy competition pose serious challenges to the survival of many small but vital players in this sector. We cannot certainly weather another storm of financial crisis, which some fear would reoccur,” a prominent shipping agent said.
Global trade
Shipping has always been a cornerstone of the New Zealand economy and its waters are open to ships from all over the world. The shipping industry, comprising shipping, forwarding, clearing and removal agents, will be a major beneficiary as international trade eases with FTAs.
Although shipping costs have gone up in recent years, a decline in trade barriers, the precipitous drop in the price of getting exported goods to foreign markets around the globe has had a huge impact on world trade.
Most shipping lines have expanded and modernised their fleet to cope with the rising demand for cargoes.
Buoyant commerce
Buoyant world trade has provided bumper returns for the world’s leading container-shipping firms. Global trade has been growing annually by about 7%. According to an estimate, the total value of global trade today is about $US 9 trillion.
The demand for container transport has exceeded supply of late, despite an increase in the world’s container-fleet capacity by an average of 10.6% a year, largely as a result of China’s bumper economic-growth rates and burgeoning exports.
This has pushed up the rates that companies pay to ship their goods.
Free Pacts
Free Trade Agreements (FTAs) are becoming a norm around the world and with the World Trade Organisation and the Doha Round in jeopardy, most countries see bilateral agreements as the ideal method to improve their trade prospects.
Trade blocs such as the Association of South East Asian Nations (ASEAN), the European Union (EU) and the Arab Gulf Cooperation Council (AGCC) are seen as ideal platforms for FTAs, giving signatories to FTAs distinctive advantage.
New Zealand could be cited as a good example. As a seafaring nation, the economy is dependent on exports to promote its high quality dairy products, wool, machinery, software and a number of other items.
While Australia remains the closest trade partner, New Zealand has been looking at other countries for agreements to boost its international trade.
The FTA signed with China seven years ago, a similar pact with Korea last year and the prospect of other countries joining Free Trade partnership have opened up several possibilities for New Zealand.
