Port companies are battling for cargo by setting up "inland ports" next to each other.

But are they just duplicating expensive facilities, often at the cost of ratepayers?

Mainfreight managing director Don Braid says the supply chain is less efficient than it used to be. Photo: FAIRFAX NZ.

"It's crazy. All of them setting up rival inland depots and deepening ports for bigger ships.

"We need Government to show some leadership with a national strategy," says long time industry player Rod Grout to Stuff.

Grout is the former chief executive of Pacifica Shipping, a consultant, and managing director of Southern Cross Containers.

New Zealand is not a big enough market for all the inland ports, he says.

"Bigger is better for shipping companies but not if you can't fill the ships. It should be driven by exporters with a couple of major ports, and you set up distribution centres after that.

"I don't think there's room for both Tauranga and Auckland to be main hubs. You could get way with Tauranga, Lyttelton and Dunedin," Grout says.

Chief executive of NZX-listed Mainfreight, Don Braid, says political leaders have a false idea of competition.

"There's no one around the Cabinet table who understands that competition benefits exporters and importers when we can attract more international shipping lines rather than fighting over internal freight.

"We have 13 ports and if you spread infrastructure assets too thinly you can't compete with big overseas operators in deep ports like Sydney, Hong Kong or Singapore.

"Why has Wellington got a container terminal when it's really a ferry and log port? Though it probably makes sense for it to set up a log aggregating site in Wairarapa.

"Maybe Auckland needs an inland port rather than extending into the harbour but should it also have one next to Port of Tauranga at Mount Maunganui? And should Tauranga have one next to Lyttelton at Rolleston? They should be working together," Braid says.

Ports of Auckland spokesman Matt Ball says there's room for both hubs at Tauranga long term. He cited benefits of competition and less congestion on roads by using rail freight more.

Lyttelton Port Company's chief executive Peter Davie's earthquake experience makes him think three or four deepwater ports is good disaster insurance, and cost effective given the country's hilly topography.

KiwiRail group general manger sales and commercial Alan Piper said some ports like Port Chalmers and Lyttelton are always likely to serve their own catchments anyway.

While KiwiRail faces sometimes faces challenges serving all the inland hubs, they offer efficiencies by reducing double handling when containers are emptied and filled again rather than being sent empty to other depots, Piper said.

'INLAND PORTS' - HOW MANY DO WE NEED?

Tainui Group Holdings has plans for one of the biggest freight depots and is seeking an international operator for a $3 billion one at Ruakaura, Hamilton.

Two have just opened at Rolleston near Christchurch.

Ports of Auckland has four - a long standing one at Wiri, a new joint venture with Napier Port at Longburn near Palmerston North, one called Northgate in Hamilton at the resource consent stage, and another to open later this year at Mount Maunganui where it will challenge Ports of Tauranga.

Port of Tauranga's set up its MetroPort inland port about 15 years ago in Auckland's industrial heartland at Onehunga to aggregate export cargo and send it by rail to Tauranga for loading onto ships.

The same happens in reverse - shipping lines bring imports into Port of Tauranga's container terminal and they are sent by rail to MetroPort before distribution around Auckland.

In Canterbury, Port of Tauranga has shored up its strategic shareholding in PrimePort Timaru, building a new freight forwarding port at Rolleston on the western outskirts of Christchurch.

Tauranga wants to rail export cargo to Timaru where it will build on its relationship with shipping line Maersk. So far its Rolleston operation has mostly taken import cargo from Timaru by rail to Rolleston for distribution around Christchurch.

Lyttelton Port has responded with its own just-opened $28m depot at Rolleston - directly over the road from Port of Tauranga's operation.

They were both attracted to Rolleston's Izone business park where they could service companies like The Warehouse which have regional distribution centres there.

Lyttelton dominates Canterbury import and export trade, and takes 51 per cent of the South Island's container trade.

A 2014 study by Aurecon (before the Rolleston developments) said Lyttelton's increasing trade in milk products, meat, coal, logs and timber was putting pressure on rail siding capacity and causing congestion at the Woolston, Christchurch depot.

The two new Rolleston depots mean producers of milk, meat and grains are now well catered for.

The Aurecon report was conservative in its forecast for trade in the Canterbury region, suggesting a 5.5 per cent increase between now and 2041.

Lyttelton Port Company chief executive Peter Davie says trade increases have always out performed forecasts.

A couple of weeks ago Wellington's CentrePort also unveiled its new investment in a Waingawa log hub, near Masterton as it copes with a 100 per cent increase se in log exports over the past five years. It is also covering all bases with plans to begin dredging Wellington Harbour to accommodate bigger container ships.

NZX LISTING ON CARDS FOR CONTAINERCO

A private company called Container Co is planning a stock exchange listing and a new $10 million container depot in Hawke's Bay

ContainerCo chief executive Ken Harris says an NZX listing is the favoured capital raising option out of four the company is considering and he expects to reveal final plans to the market in a couple of weeks.

The company has appointed Cameron Partners as investment banking advisor.

ContainerCo was formed from a merger of container depot businesses in 2013 to become New Zealand's largest independent container depot storage and hire business.

Its customers are the eight main shipping lines, and it has depots in Tauranga, Auckland, Napier and Christchurch.

Latest accounts reveal increased annual revenue to $43.m, up from $33.8m following the 2014 merger.

Harris said there has been annual compound growth in container volumes of 4.3 per cent over the past five years and a move to larger containers.

ContainerCo's new Hawkes Bay depot will be developed on 5ha of leased land in Mersey St, Napier and cater to growing trade volumes.

Rivalry between ports has led anomalies and costs to some ratepayers where councils own ports, Harris says.

He thinks the supply chain is less efficient than it was 10 years ago and many of the new inland port are often led by personalities with their own agendas.

- Stuff