2007-2008 - Ports of Auckland

0204060810121416Market ReviewPorts of Auckland Annual Review 2008This year was notable for continued market volatility and turbulenceas competing shipping lines rationalised services in an effort to savecost and achieve greater efficiency.Overall, Ports of Auckland was a net winner in a raft of line and servicechanges during the year. While Auckland lost CMA CGM’s Nemo andPanama service calls and those of Gold Star Line’s trans-Tasman service,we retained and won others that more than outweighed the losses.Hamburg Sud and Maersk Line rationalised two of their key servicesover Auckland, electing to jointly operate a 12-vessel weekly serviceto Australasia, East Coast North America and Europe. In addition, fiveshipping lines (Pacific International Lines, Orient Overseas ContainerLines, Mitsui O.S.K. Lines, NYK Line and MISC Berhad) revamped theirtwo-loop South East Asia Service into single-loop, bringing larger2,800 TEU vessels to Auckland each week.The uplift in container volumes, anticipated as a result of thesechanges, began to be felt in late June 2008.Meanwhile, bulk and breakbulk volumes through General Wharvesincreased slightly (excluding Wynyard Wharf volumes). There wasnotable strength in the bulk cargoes trade and a slight increasein vehicle imports ahead of new vehicle emission rules introduced inJanuary 2008.Overall, ship calls stayed much the same, in keeping with industrytrends to fewer calls by larger ships, and there was a pleasing increasein cruise ship calls, up more than 40% to 70.Market OutlookWe anticipate ongoing market volatility as shipping lines deal withincreasing external pressures. Steel, fuel and crew costs haverocketed to new highs. However, the impacts of the global economicslowdown are yet to be fully realised. Projections for global shipping,typically a high-growth sector, are relatively bleak. It is unlikely theindustry will experience organic growth in the coming years to theextent it has done previously.Therefore, while the 2009 financial year has started well, weexpect a tailing off in volume growth as the effects of the globaleconomic slowdown are felt. Overall we expect volumes to settle ata similar level to that of 2008. Meanwhile, the cruise business isanticipating a very busy season on par with last year, with in excessof 70 calls anticipated.We also expect that the international trend to hubbing will driveincreased coastal shipping around New Zealand. We welcome theGovernment’s Sea Change strategy to reinvigorate the trade and lookforward to more coastal services in 2009. Once better established,coastal shipping will provide shipping lines with more supply chainchoices and facilitate a greater focus on larger vessels. This trendis likely to be positive for Ports of Auckland, both at the Waitemataseaport and in Onehunga.Volume TrendsOne of the most interesting trends of the year was a 55.5%increase in trans-shipments. The dramatic increase can be attributedto the ongoing service consolidations experienced since 2006,and provides further evidence of an emerging hubbing structurefor New Zealand, with Ports of Auckland at the heart of thedeveloping trend.While overall container volumes reached a pleasing record high,growth was in fact less than had been anticipated. Import volumeswere particularly affected in the second half of the year, while UpperNorth Island drought conditions and a high New Zealand dollarsoftened export volumes.