Maritime Union of New Zealand

Today’s Timaru Herald features the Timaru public meeting this Thursday 17 September as their lead story.

Read the full story here.

The Maritime Union of New Zealand is hosting a public meeting on the future of the Port of Timaru. The meeting will be held at the conference room at “Robbies” (Hibernian Hotel), Latter Street, Timaru on Thursday 17 September starting at 7.30pm sharp.

All concerned local people are invited to the meeting, including port workers, unions, business, industry, farmers, and all those concerned with the future of the port.

For more information see the Port of Timaru campaign website.

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.”

The Maritime Union has hit back at “socially irresponsible” Fonterra pulling out of regional ports and says the dairy giant’s profits are being subsidized by the taxpayer.

Maritime Union of New Zealand General Secretary Trevor Hanson says Fonterra has come out with “weak excuses” for its decision to pull out of some regional ports in favour of transporting products by long distance rail.

Mr Hanson says the future of the New Zealand transport industry seems to be in the hands of one man, Fonterra General Manager of Supply Chain Strategy Nigel Jones.

“Fonterra holds the fate of whole regional economies in their hands because of their size and influence, but seem to have no accountability to anyone but themselves.”

He says recent comments by Mr Jones to rural sector media confirmed Fonterra had no interest in working for a stable and secure regional economy.

“Mr Jones says his goal is to put more money in farmers pockets. Yet he has admitted the large public investment in rail has been behind the decision to dump ports. There has been no debate as to whether this vision is correct or dangerously wrong. Regional communities have been ignored.”

Mr Hanson says he does not believe the rates being paid by Fonterra to rail their goods are sustainable and are basically being propped up by the public.

He says there is a real danger if the rail plan fails, there would be a huge increase in container trucks on the road and regional ports would have disappeared.

Mr Hanson says the decision by Fonterra affects all the other producers who send goods through regional ports like Timaru and New Plymouth.

He says public investment in rail is a good thing, but only as part of an integrated transport system, and publicly owned rail should not be used to play off regions and transport modes against each other.

“It is common knowledge that ports such as Timaru and New Plymouth had planned and invested heavily in upgrading infrastructure to cater for Fonterra. Now they are left high and dry because of overnight decisions. There has been no consultation, no social responsibility and no recognition from Fonterra about the wider implications of their actions.”

“People in the regions are paying three times to subsidize Fonterra profits – they are paying for their regional ports to invest in infrastructure that is then made worthless, they are paying to upgrade rail infrastructure to carry Fonterra goods, and they are paying with their jobs and livelihoods when Fonterra makes overnight decisions to abandon regional ports.”

Mr Hanson says the “hands off” approach by Government to ports has led to a dysfunctional situation which was harming regional economies.

“We cannot have a company like this able to dictate terms to regional New Zealand and cause havoc in regional economies through arbitrary and irresponsible decisions.”

He says that the profits made by Fonterra and primary industries are not just created on the farm, they are created by an entire production and logistics chain that includes transport workers, ports and shipping.

“The actions of Fonterra have a massive impact on regional economies, and if they continue to make harmful decisions based entirely on their own short term interests, then regulation is the only answer.”

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.”