The Ministry of Transport published the Future Freight Scenarios study on 5 December 2014.
The study shows that larger international container ships visiting New Zealand create both opportunities and risks. Increasing numbers of larger ships coming to our shores will reduce the cost of shipping freight internationally. However these savings will likely be outweighed by higher domestic transport costs, particularly for exporters and importers far away from the ports which are able to handle the larger ships.
The study was commissioned to provide impartial information, for the purpose of helping the freight sector plan effectively for the increasing numbers of larger ships visiting New Zealand.
It highlights the importance of existing Government and private sector initiatives to lower domestic freight costs.
What is the Future Freight Scenarios study?
The Future Freight Scenarios study looks at the impact the trend to larger international container ships could have in New Zealand.
It also examines the possible move to a hub and spoke port network that may result, where some ports service international container ships (hub ports), while other ports without international ship capability (spoke ports) act as feeders to the hub ports.
The study does this by examining ten possible scenarios, each with a different configuration of hub ports.
Key findings from the study
- The study affirms the importance of taking a national and multi-modal perspective on the future of freight in New Zealand.
- Larger container ships coming to New Zealand present opportunities, but also risks.
- As the trend to larger ships continues in New Zealand:
- the government and private sector both have a role to lower domestic freight costs, if all cargo owners are to benefit from larger ships
- likely bottlenecks on the road, rail and coastal shipping networks need to be addressed
- competition in ports and shipping is key to ensure cost savings are passed on to cargo owners
- competition across the freight sector is important to encourage initiatives (such as the use of technology) that increase efficiency and lower costs.
Why did the Ministry commission this study?
The study is the Ministry’s contribution to help the freight sector with decision-making in planning for larger ships.
The Ministry commissioned the study to give effect to the Government’s response to the New Zealand Productivity Commission’s International Freight Services Inquiry. The inquiry noted a number of challenging questions affecting the future shape of the freight system. These included how best to plan for larger international container ships.
The Productivity Commission said the question of how best to plan for larger international container ships should be resolved by the sector. However, the Commission recommended the Government help private sector decision-making by providing improved information.