Strike-bound Ports of Auckland loses $20M of revenue as Maersk service defects to Tauranga

Tuesday 6th December 2011 1 Comment

Ports of Auckland, in the midst of strike disruptions, will lose almost $20 million of annual revenue after Maersk, the biggest shipper visiting New Zealand, switched one of its services to Port of Tauranga.

The loss of Maersk’s Southern Star container service amounts to 52 ship calls, or 82,500 containers a year, Ports of Auckland chief executive Tony Gibson said in a statement. The industrial action at Auckland played a part in the decision, Maersk’s New Zealand marketing manager Dave Gulik said in a separate statement.

“The security of their supply chain is of primary importance to our customers, so anything affecting that, or likely to affect that in the future, will come into the equation when we are deciding schedules,” Gulik said.

The loss of revenue amounts to 11 percent to the $177 million Ports of Auckland garnered in sales in the year ended June 30. Profit fell 37 percent in its latest year.

The port has postponed mediation talks with the Maritime Union that had been slated for today. The union and the port have been at loggerheads over their employment contract, precipitating a strike and a lock-out this month – typically a peak period in the run-up to Christmas.

“We are hugely disappointed,” Gibson said. “The Southern Star was one of Auckland’s largest shipping services.”

Maersk’s switch will take effect from this weekend.

Shares of Port of Tauranga rose 0.9 percent to $9.90 and have climbed 32 percent this year. Tauranga and Auckland are fierce competitors who haven’t found a way to progress a merger. Tauranga now operates an ‘inland port’ in south Auckland, sending containers by rail to its wharves in the Bay of Plenty city. Port of Tauranga claims to be the nation’s biggest port by volume.

Maersk’s Northern Star service will continue to visit Auckland. The two star lines link New Zealand with key Asian hubs of Port Klang and Tanjung Pelepas.

Maersk’s Gulik said the service changes would not have a material impact on total transit times. Most of the export cargoes shipped out of Auckland originate from the Waikato-Bay of Plenty regions, where exporters’ transport and logistics operations “tend to be port-neutral,” he said.

The postponed mediation was an attempt to reach agreement on the terms of a new collective pay contract for waterfront workers. The strike involved 327 of the ports 500 employees.

Maersk operates the South Star service with Malaysia’s MISC Berhad, which has flagged it will exit the container business in Jun 2012, Gulik said.

(BusinessDesk)

BusinessDesk.co.nz

Comments from our readers

On 7 December 2011 at 11:44 am John said:

"The industrial action at Auckland played a part in the decision, Maersk’s New Zealand marketing manager Dave Gulik said in a separate statement."Did Maersk just throw POA’s a parting bone with its dispute reference? Typically the media is distracted by the more sensational aspects of a story and never more so than by the melodrama of an industrial disease story. However, as the quote from the Maersk rep says it was part but not the sole reason. Can anyone point to coverage where the remaining part(s) are covered? Perhaps the whining from the PAO is to cover the crowing of the POT and for reasons BOPT link below gives clue to. http://www.bayofplentytimes.co.nz/news/tauranga-port-maersh-deal/1200337/ Seriously, does a company like Maersk make spur of the moment decisions based on a four day old industrial dispute or is this just part of the ongoing restructuring of NZ Port calls and competition for its custom that Maersk began in 2008, combined with the more resent failure of Merger talks between POA and POT earlier this year. Also, if the POT inland port in South Auckland is the gainer, is it, as the coverage suggests, such a loss to Auckland or just the POA. Does it really make a difference as to whether the freight is loaded at the POA Wiri station or POT Southdown? Just maybe the underlying reason is that the management of POT is just better at managing a port and freight than that of the POA. Perhaps Mearsk’s decision has more to do with pull factors than push, as this is not simply a parochial affair. http://www.chinadaily.com.cn/hkedition/2011-03/26/content_12230235.htm