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Fonterra quits Ports of Auckland amid ongoing strikes

Fonterra quits Ports of Auckland amid ongoing industrial action

By Paul McBeth

Jan. 4 (BusinessDesk) – Fonterra Cooperative Group, the world’s biggest dairy exporter, has quit using Ports of Auckland due to the threat of ongoing strike action.

Port chief executive Tony Gibson blamed the Maritime Union of New Zealand (MUNZ) for Fonterra’s decision to re-route $27 million worth of weekly exports through Tauranga and Napier hubs instead of Auckland. The dairy exporter’s exit comes a month after Maersk, the biggest shipper visiting New Zealand, switched one of its services to Port of Tauranga.

“With MUNZ threatening further strike action, it is inevitable that customers will look for alternatives and contingencies,” Gibson said in a statement. “Coupled with the departure of Maersk’s Southern Star service to Port of Tauranga, the loss of Fonterra’s business means that action is needed urgently.”

The union and the port have been at loggerheads over their employment contract, precipitating a strike and a lock-out last month – typically a peak period in the run-up to Christmas. Maersk’s departure is expected to cost the port $20 million in annual revenue, which amounts to about 11 percent of the $177 million Ports of Auckland made in sales in the year ended June 30.

Fonterra will cease using the Auckland hub from the end of the month until further notice.

The dairy exporter whittled down the number of ports it uses since 2009, and last year set up a freight alliance with meat processor Silver Fern Farms to build a bigger bargaining chip with international shipping lines.

Gibson said the port has made a final offer to the union, including a 10 percent rise on hourly rates and performance bonuses of up to 20 percent on hourly rates, plus the retention of existing benefits and entitlements. Workers will be expected to accept a new roster system in return.

“In the best interest of customers, staff and the port’s future, some constructive progress is needed from the union, and needed now,” Gibson said.


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