The pandemic has thrown global supply chains into chaos. New Zealand is not immune – The Detail looks at whether a domestic coastal shipping service could ease some of the pressure on our ports and roads, and help reduce emissions.
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Swire Shipping country manager Brodie Stevens at Ports of Auckland Photo: The Detail/Sharon Brettkelly
Tucked among the massive container ships at the Ports of Auckland is a special vessel carrying some very precious cargo.
On board the Happy Delta are several luxury yachts and cruisers.
Swire Shipping country manager Brodie Stevens watched as heavy-lifting cranes loaded one of the brand-new Kiwi-built yachts onto the ship, destined for Asia or Europe.
It's not cheap, says Stevens. He reckons the owners would be paying tens of thousands of dollars to ship them.
"The ship has a charter rate so what would it cost daily to hire that ship? At the moment, charter rates are incredibly high. I don't think we've seen these [rates] for many, many, many years," says Stevens.
"They're building more ships at the moment and when you build more ships and there's more supply, then the charter rates will come down."
The luxury yachts stand out as things of beauty on the port, amongst the stacks of shipping containers, piles of sand and scrap metal, a giant cement dome and enormous cranes. They also illustrate what is behind the sky-high costs of shipping: high demand and a shortage of vessels.
"The shipping companies are very profitable at the moment. But if you go back in time, they weren't very profitable, why was that? Because of competition.
"The analogy I like to say to people is that owning a ship is like owning a building, it has a life. That ship you're looking at there would be about 10 to 15 years old, it's probably got 10 years of life in it, so like owning a building you want to get a return on it.
"To build that ship today would cost you US$60 million. Shipping companies at the moment, yes, they're doing very well but they've got assets and the cost of shipping isn't cheap."
Stevens is taking The Detail on a tour of the Ports of Auckland to give an insight into what's going on in shipping, what's behind the supply chain crisis, the sky-high costs and the push for a revival of a domestic coastal shipping service.
Singapore-headquartered Swire has 36 vessels, one of which is the Moana Chief, the only New Zealand-flagged container ship on the domestic coastal route.
The 1700 TEU (20-foot equivalent unit) Moana Chief has a weekly service connecting Auckland, Lyttelton and Tauranga, with Nelson and Marsden Point on alternate weeks. It competes with international shipping lines operating coastal services.
Calls to revive a coastal shipping service with New Zealand ships are growing, as the schedules of international vessels become increasingly erratic due to the pressure of unprecedented global demand.
Stevens says the so-called 'blue highway' in New Zealand should be called the 'forgotten highway', given the lack of attention and funding for coastal shipping over the years.
Covid-19 has highlighted inefficiencies in the industry, but it's also given it a chance to review how it's done.
Stevens explains Swire's pitch to the government to underwrite a second vessel for the coastal route. The company is also looking at building dual fuel ships for the New Zealand coastal trade, which he says would be a game changer for reducing emissions.
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