Port of Tauranga shares down after Maersk opts for Auckland

By NZPA

Wednesday 22nd November 2006

Port of Tauranga's share price dropped in early trade today after news it had missed out on becoming the main port in this country for shipping giant Maersk Line.

Port of Tauranga will continue to handle three of Maersk's services.

Shortly after the market opened at 10am today Port of Tauranga's share price was down 15c, or 2.4%, at $6.05 from yesterday's closing price of $6.20. The share price fell 9c yesterday having ranged between a year high of $6.45 a week ago and a low of $4.11 last December.

Maersk, which handles 40% of New Zealand's sea freight, confirmed today its preference was for Ports of Auckland, over Port of Tauranga, to handle most of its North Island services.

Port of Tauranga said the business now represented around 4600 containers a month, and a revenue of about $1 million per month.

"We priced our offer on the basis of providing a long-term sustainable option, which we understood Maersk was seeking," Port of Tauranga chief executive Mark Cairns said.

The Auckland and Tauranga port companies are in merger and co-operation talks, and Cairns said today the desired timetable was for a merger to be a reality in the first half of 2007.

Maersk New Zealand managing director Tony Gibson said that while the final contract had not been concluded, Ports of Auckland looked likely to get the significant share of the port calls.

Auckland is the country's biggest importer port and Tauranga the biggest exporter.

There has been a suggestion they will form a super-port company on the same national benefit rationalisation that dairy giant Fonterra was created. Gibson said in a statement today that Maersk recognised the timing of its announcement coincided with public discussion surrounding waterfront development in Auckland.

"However it is crucial that we indicate our preference so that our customers can plan their future shipments with confidence," he said.

"For booking purposes we have given exporters advance notice that our South East Asia hub service and the US East Coast services will call at Ports of Auckland.

"Tauranga will maintain the current North Asia, US West Coast, the Pacific Island services and the coastal feeder calls.

"Further delays in announcing our preference could have presented significant planning difficulties for North Island exporters and importers making logistics and supply chain decisions for next year.

"We are still negotiating with Ports of Auckland to finalise contractual details, but expect these to be completed next month and for the new schedule to be phased in from mid January."

Maersk services will now run as follows:
The South East Asia service, hubbing through Tanjung Pelepas in Malaysia and employing four vessels on a weekly basis, will now call at Auckland, Napier and Port Chalmers.

The US East Coast Service, involving nine vessels on a weekly basis, will call on the United States East Coast, Auckland, Australia, Auckland, New Plymouth, Timaru, Port Chalmers, returning to the US East Coast.

The feeder service for exporters and importers to the US East Coast service and Tanjung Pelepas service will call Auckland, Tauranga, Lyttelton, Nelson, Wellington, Tauranga, Auckland and fortnightly to the Pacific Islands.

Last month Maersk said it would continue to service all nine ports it now serviced but was then still tossing up between Tauranga and Auckland on key services.

It said it was dumping direct services to Europe, meaning its service to Asia through its Tanjung Pelepas hub was more important, although the alternatives through the Americas were available.

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