Port ownership rationalisation weakens competition

Any move to rationalise port ownership in the Upper North Island is not likely to be welcomed by business says the EMA.

EMA Chief Executive Brett O’Riley say suggestions coming out of the Upper North Island Supply Chain Strategy that perhaps the three main ports Auckland, Tauranga and Northland could rationalise their ownership to create a monopoly in the region are misguided.

"Our members like the competitive tension between the ports and benefit from it," says Mr O’Riley.

"For some reason we seem to like creating monopolies or duopolies in New Zealand when the best result for customers usually results from at least three competitive players in a market - look at the telcos."

The EMA is the largest business membership organisation in New Zealand and its base covers the region from Taupo to the Far North. Both major ports are members of the EMA.

Mr O’Riley acknowledged that the issues around moving large volumes of empty containers created by the imbalance between imports and exports at the two main ports were a concern.

"But the ports and the freight distribution sector in general are already working on ways to minimise this issue. Collaboration between the ports and the freight sector, including coastal shipping, is the likely answer here, not forced amalgamation of ownership. Those distribution issues are exacerbated by the lack of investment in road and rail infrastructure, particularly around access to the Auckland and Tauranga ports," says Mr O’Riley.

As the report notes lack of infrastructure investment also hampers the case for greater volumes of freight or a dedicated car import hub at Northport.

"There is a strong political push to invest massively in rail from Northport to South Auckland to address this lack of infrastructure but we have to be very careful to ensure there is a strong business case to support this massive investment - especially when there is already a four-lane highway that goes almost half-way to Northport.

"Perhaps that is something the about to be formed National Infrastructure Commission could investigate before committing to massive investment in either or both the road and rail options."

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