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Sea Change funding will revitalise shipping

King: Sea Change funding will revitalise coastal shipping

Transport Minister Annette King today launched the final Sea Change strategy, announcing increased funding designed to revitalise and transform coastal shipping in New Zealand.

Ms King said $36 million is earmarked for coastal shipping over the next four years. "Land Transport New Zealand has $6 million available for domestic sea freight for 2008/2009, and then, under the first Government Policy Statement or GPS in July, I plan to allocate a further $10 million for sea freight development for each of the following three years up to 2012."

"I'm also pleased that LTNZ has been working with the Ministry of Transport to reduce barriers to accessing the funding. The sector should find it easier in the future to source available funding. I'm aware of the frustrations and the impediments which have made it 'too hard' in the past," she said.

"The aim of Sea Change is for coastal shipping to make a major contribution in managing future freight growth. Total freight movements are expected to more than double by 2040, putting huge pressure on the transportation system. Shipping has a vital role to play in meeting this expected growth in freight movement, and is a key part of an integrated transport network," she said.

Sea Change's target is for at least 30 percent of inter-regional freight to be carried by sea by the year 2040, up from the current 15 percent share. "Because total domestic freight is expected to double in tonne-kilometres by then, achieving the target actually means a four-fold increase (in tonne-kilometres) for domestic freight moved by ship. The strategy sets an interim target of domestic sea freight carrying 20 percent of inter-regional freight by 2020.

"This is in line with targets outlined in the soon to be released update of the New Zealand Transport Strategy. We need to reduce the transport system's heavy dependence on fossil fuels and to reduce greenhouse gas emissions. We can reduce transport greenhouse gas emissions by seven percent by 2040 by doubling coastal shipping's current share of inter-regional freight," she said.

"Sea Change offers a bold new future for coastal shipping in New Zealand, and signals a partnership between national and local government, the domestic sea freight industry and employees, and other parts of the transport sector."


What is Sea Change? Sea Change is a strategy setting out proposed actions to help industry and government transform the domestic sea freight sector so that it can play its part in the overall transportation system. The strategy has been produced by officials from the Ministry of Transport in consultation with representatives from maritime transport sector groups and local and national government agencies. 58 submissions were received in response to the draft strategy released in November 2007, and showed support for the general direction, while also focussing on targets, funding, and ports. This material has been considered and is reflected in the final strategy. Sea Change contributes to an integrated transport network that meets both present and future needs and is aligned to the overall New Zealand Transport Strategy. The development of Sea Change follows the New Zealand Shipping Federation's report Roadways to Waterways in September 2006, and the Shipping Industry Review in December 2000.

What is the present situation with the carriage of domestic freight by sea? At present about 15 percent of New Zealand's domestic freight (measured in tonne-kilometres) is carried by sea.

What are the drivers for moving more freight by sea? In the next 30 years, the amount of domestic freight that will have to be moved around the country is expected to more than double. The trickle down implications of this will be significant for the New Zealand transport sector. International shipping is also expected to continue a trend towards larger ships calling at fewer ports. Unless freight can be transferred to coastal vessels, this trend will add to the pressure on road and rail. Another factor is the high dependence of the transport industry on fossil fuels and the need to reduce greenhouse gas emissions. Recently the government announced a number of initiatives to address climate change. All the overseas evidence is that sea is the most energy-efficient way to move freight.

What is the situation in other countries? In Japan, which has similar geography to New Zealand, domestic sea freight has more than twice the market share that sea freight has here. In the European Union, the growth in freight moved by sea is expected to exceed the growth in freight moved by road within the next 10 years.

Has New Zealand set any targets? In the strategy, it is proposed that by 2040 New Zealand will move 30 percent of its inter-regional domestic freight by sea, and 20 percent by 2020. These targets are realistic but assume there will some changes within the overall transport sector to allow this to happen. What impact will this initiative have on other transport modes? There will be substantial growth in the amount of domestic freight to be moved in the next 30 years. The Sea Change initiatives will help to manage the growth. It is expected that domestic sea freight and other transport services, especially rail and road, will become increasingly integrated. What actions are planned in order to reach the targets? Actions, some already underway, include: • A Seafreight Development Unit in the Ministry of Transport to create a visible focal point for the coastal shipping sector. • Reducing barriers to coastal shipping accessing government funds.

• Government agencies working with the sector to increase the supply of skilled workers.

• Information gathering to encourage better use of sea freight and inform policy development.

• Developing effective supply chains. What steps are planned to improve information on freight movement? The national freight study will be completed by the end of June.

What does Sea Change propose about 'cabotage'? In maritime transport, 'cabotage' means reserving the carriage of domestic sea freight to local shipping operators. It is a form of industry protection that existed prior to 1994. Sea Change does not propose re-introducing cabotage. Overseas ships are an important supplement to coastal shipping services in New Zealand. They will continue to be able to carry domestic sea freight when it is done in the course of a voyage through New Zealand to load or unload international goods and passengers at New Zealand ports.

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