The Maritime Union is asking where the Government and the Minister of Transport stands on the future of regional ports after Fonterra announced it was withdrawing from some regional ports in favour of transporting goods by long distance rail last month.

Jobs are under threat, casualization is hitting workers hard, and the viability of regional ports is under a cloud after the decision, which has created intense debate in the regions and the transport industry.

Maritime Union General Secretary Trevor Hanson says the union’s national executive met with a Fonterra representative earlier this week.

He says the meeting was a useful initial step but none of the issues had been resolved.

“We want to see Fonterra registering the fact they have a social responsibility to the communities they work with, not just a narrow focus on short term benefits for their shareholders.”

However he says the Government seems to have “turned on the auto pilot and left the bridge.”

Mr Hanson says that no satisfactory response has been forthcoming about the impact of Government investment in rail and how this could influence pricing, but questions were continuing to be asked throughout the industry.

“The Maritime Union supports public investment in rail, but if ports and coastal shipping are not receiving the same public investment, then this cannot lead to the most effective solution.”

Mr Hanson says there has to be a co-ordinated national strategy for ports and transport where Fonterra had a role but was not able to dominate for their own benefit.

He says the lack of response from the Transport Minister is a concern as it appears the Government had “gone to sleep” on a major issue in the regions and the heartland New Zealand communities it electioneered on.

“This is bigger than Fonterra. We are talking about the future of transport in New Zealand and if we leave it up to the biggest player to call the shots, then the result will not be a good one.”

The Maritime Union is pressing for “social responsibility” from Fonterra and a national transport strategy that works for the regions following the meeting between the union and the dairy giant.

Mr Hanson says that appears some progress has been made in Port Taranaki with extra work being found for the port by Fonterra, which would lessen the impact of its sudden switch to a long distance rail option.

He says that it is imperative that similar arrangements be made with the Port of Timaru, where job losses and the casualization of the workforce are occurring, with the port reeling from the loss of more than half of its container traffic.

The following resolution was passed this week at the national executive meeting of the Maritime Union of New Zealand in Wellington:

“The Maritime Union national executive registers its concerns at the actions of Fonterra in its arbitrary decision to stop shipments through Timaru and Taranaki and also the effect this will have on all the other ports”

“The Union will continue to campaign for a full and proper discussion among all stakeholders including ports, maritime workers, farmers, regional business, local government and national government to ensure that regional ports are not disadvantaged by Fonterra’s decisions.”

“Further more the unilateral move to bypass the environmental and commercially viable option of coastal shipping, is of further concern especially when New Zealand’s carbon footprint is of real concern in the future of NZ exports.”

The Maritime Union of New Zealand was formed in 2003 and represents waterfront workers, seafarers and related workers throughout New Zealand.

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Cartoon courtesy of the Shipping Gazette

The Maritime Union has stepped up its demand for answers as fallout continues from Fonterra’s dumping of regional ports in favour of long distance rail – and the influence that state subsidies to KiwiRail may have had on any deal.

KiwiRail has waded into the growing debate over the fate of regional ports, as the implications of Fonterra’s withdrawal from ports in New Plymouth and Timaru becomes apparent.

KiwiRail chief executive Jim Quinn was reported in the Taranaki Daily News (29 August 2009) saying any Government subsidy was irrelevant to the Fonterra deal but that KiwiRail did need the subsidy.

Maritime Union General Secretary Trevor Hanson says that the situation has obviously blown up in Fonterra’s face and it needed to be held to account.

He was not satisfied with KiwiRail’s answers and said “either they are being subsidized or not, and we believe there is more to this situation than regional communities are being told.”

Now the Maritime Union for public meetings to begin “active resistance” to the actions of Fonterra.

Mr Hanson says there should be immediate public meetings organized to bring together those affected by the decisions – ports, local councils, farmers, maritime workers, local businesses and all affected citizens, to demand some input into such decisions.

He says locals need to fight back against the destruction of these ports, and ultimately the damage to their regional communities.

The Union is also demanding answers from the Government as to how taxpayer funding of KiwiRail is being allowed to threaten the future of regional ports.

“The Government has the end responsibility here to step in for the national interest. To stand aside and let these heartland communities have their infrastructure and transport systems effectively demolished by a five hundred pound gorilla called Fonterra is showing that it either has no idea or the wrong idea.”

Mr Hanson says the both of these ports are capable of handling their local cargoes – without subsidies.

He says the money these ports have invested in infrastructure to handle Fonterra’s trade has effectively been flushed down the drain.

“The question needs to be answered – is the Government aware of any influence of subsidies on the price of the movement of cargo on rail hundreds of kilometres away from its regional catchment?”

“Both ports need to ask the Government to put Fonterra’s activities on hold until a true cost of their decision has been investigated.”

Mr Hanson says for some time there has been strong advocacy for the use of coastal vessels to move cargo out of the secondary regional “feeder” ports to major exporting “hub” ports.

He says this strategy has now been “blown out the water” without explanation or discussion in the industry.

Mr Hanson says Fonterra shipper Maersk needs to state its position as one of the largest shipping operators in the world.

“Maersk has described itself as a socially responsible company and will be very aware of the damage caused to regions and communities from Fonterra’s actions.”

“We have to wonder if Fonterra has other shipping options under study, and what effect this could have.”

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The Maritime Union says regional ports have been hit hard because of a decision by Fonterra to rail goods to distant ports.

Maritime Union General Secretary Trevor Hanson says the moves have already led to notices of major redundancies in the port of Timaru, greater casualization of the workforce, and was threatening the viability of some ports.

“This issue cannot be dealt with by ports continuing to compete each other into the ground. It must be addressed by national co-ordination of our transport system, not the wasteful, insecure and chaotic mess we have at the moment.”

He says that Fonterra is running for cover on the issue and their explanations have not satisfied people in the regional ports affected by their recent decisions.

Mr Hanson says there are industry concerns that Fonterra may be getting extremely low rates to transport goods by rail.

He says while such a situation might suit Fonterra, regional ports and coastal shipping were being disadvantaged.

As rail was publicly owned, this could mean people and businesses in those communities would be effectively paying for work to be taken away from them.

Mr Hanson says it’s not a case of rail versus sea.

“The Maritime Union is a big supporter of rail being in public ownership, and public investment in rail, but it has to be part of an integrated transport system, not just another way for the big operators to play off ports and transport modes against each other.”

He says the Maritime Union supports the use of coastal shipping and rail working together, rather than the Government’s emphasis on “unsustainable, polluting and inefficient” heavy trucking.

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The Maritime Union’s comments on the effect on ports of decisions by Fonterra and shipping companies have featured widely in the news.

TVNZ reports that “the Maritime Union of New Zealand is calling for national co-ordination of port strategy, arguing that Fonterra is exerting such power as a customer it is effectively rationalising the port industry.”

The Taranaki Daily News writes that “Zealand’s waterfront workers and seafarers have savaged Fonterra’s decision to drop Port Taranaki, warning it has the potential to ‘rip the guts out’ of the port” following a “a bombshell decision last week, the dairy giant said it would be railing Whareroa product to Auckland and Tauranga instead.”

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The Maritime Union says Fonterra’s decision to stop shipping containerized exports through Port Taranaki and Port Timaru was an example of how entire regional economies within New Zealand were being disrupted.

The recent announcement by Fonterra means the loss of 25,000 boxes of cargo to Port Taranaki in New Plymouth, and the loss of 24,000 boxes to Port Timaru annually.

Maritime Union General Secretary Trevor Hanson says the “overnight decisions” by Fonterra and major shipping companies are harming regional communities and regional ports through a process of “destructive competition” where ports experienced major and unpredictable changes in shipments.

“We have a situation where a major producer Fonterra and global shipping lines are working together for their own interests, but their decisions are wreaking havoc on ports and port communities which are subsidizing the profits of these conglomerates.”

Mr Hanson says the losers in the game are New Zealand ports, which were driven by short-sighted parochial competition and were played off against one another.

“It is a crazy situation. There needs to be oversight and regulation so we have a planned port industry that has stability rather than the massive waste of resources that goes into duplicating infrastructure and machinery for the sake of destructive competition, and the instability that it creates for skilled employment in New Zealand ports.”

He says the Union is arguing for a “KiwiPort” concept, where ports were integrated and nationally co-ordinated with a level of public ownership.

“Ports are New Zealand’s trading connection with the world, and as essential national infrastructure they are far too important to be left open to the short-term manipulations of private corporations.”

Mr Hanson says the big catch cry in the industry for the last 15 years is that smaller regional ports will work with major hub ports to gain efficiencies.

“The recent announcement is a complete change of direction.”

He says Port Taranaki and the Port of Timaru are close to production areas, whereas goods would now be sent hundreds of kilometres away by rail.

“The cost to the Port Taranaki is horrendous. This port when it was advised of the introduction of “4100 type” container ships to New Zealand went ahead and expended $20 million to deepen the port in order to accommodate these vessels.”

Mr Hanson says since port reform in the late 1980s, successive Governments have had a “hands off” approach to ports which has led to an unstable industry.

“There are heavy repercussions for the regions of New Zealand. Ports are surrounded by infrastructure that require the services of ports, ports have invested heavily in plant and port modifications to service container exports from their region, and business decisions in the regions are made on the basis of both these ports in full operational mode.”

But when companies that had virtual monopolies on shipments made overnight decisions that could “rip the guts” out of ports, it was impossible to run a rational long-term industry.

Mr Hanson says because of the dominant position of a company like Fonterra, it was immune to criticism as it could literally hold ports to ransom.

“What we are seeing is the destructive rationalisation of New Zealand ports regardless of national interest, secure jobs, economic development and stable regional communities, to suit global shipping companies and the short term interests of a dairy conglomerate.”

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