Govt investment boosts coastal shipping in NZ

Coastal shipping is a small but important part of the New Zealand freight system. Photo: SunLive.

New Zealand is a step closer to a more resilient, competitive, and sustainable coastal shipping sector following the selection of preferred suppliers for new and enhanced coastal shipping services, Transport Minister Michael Wood has announced today.

“Coastal shipping is a small but important part of the New Zealand freight system, which is why the Government is investing in making coastal shipping a more viable alternative to strengthen and diversify our domestic supply chain, helping to secure New Zealand’s recovery from Covid-19," says Wood.

As a lower emissions transport mode, investing in coastal shipping will also help us achieve our decarbonisation goals."

The Government has committed $30 million of funding for coastal shipping funding through the National Land Transport Programme (NLTP) to improve domestic shipping services, reduce emissions, improve efficiency and upgrade maritime infrastructure.

Waka Kotahi worked with the wider freight industry (NZ Shipping Federation, Port Company CEO Group, National Road Carriers, KiwiRail, and Te Manatū Waka - Ministry of Transport), to select four applicants for co-investment in new and enhanced coastal shipping services through the NLTP.

The four preferred suppliers are Coastal Bulk Shipping Ltd, Move International Ltd, Swire Shipping NZ Ltd, and Westland Mineral Sands Co (2022) Ltd.

“With the freight industry’s support, these additional services will help to resolve immediate challenges to the coastal shipping and the wider freight sector, address some of the current issues facing the international and domestic supply chains and provide a platform for future growth across all modes with increases in capacity and capability for both new and existing bulk materials and containerised cargo,” says Wood.

“Each of these four selected suppliers will bring at least one additional coastal shipping vessel into service, and together this will improve the resilience of the overall freight supply chain.

“The four preferred suppliers will invest over $60 million through their proposals, resulting in combined investment in the sector of over $90 million.

“When the new services are fully operational, it is estimated they will remove around 35 million kilometres of truck travel from New Zealand’s roading network every year, reducing wear and tear and improving safety for road users, while at the same time creating new employment opportunities for mariners and supporting regional development. This will also support our commitment in the recently released Emissions Reduction Plan to reduce emissions from freight transport by 35 per cent by 2035.

“Through this funding we are taking an important step towards better utilising the blue highway, improving our freight system, and futureproofing our national supply chain.

“In the meantime, we’re continuing work to mitigate supply chain problems caused by Covid-19, which includes increasing capacity through KiwiRail, extending the aviation support package so businesses can tap into international markets, and working with the sector to address issues as they arise,” says Wood.

The Council of Trade Unions is welcoming the Government support for the coastal shipping industry.

A $30 million investment by the Government to improve coastal shipping services is great news for jobs, the economy and the environment, says the Council of Trade Unions.

“A viable coastal shipping service has huge advantages for New Zealand, and we welcome the Government’s commitment to unlock the potential of the sector,” says Council of Trade Unions President Richard Wagstaff.

The investment in partnership with four shipping companies announced by Transport Minister Michael Wood, will see at least four additional New Zealand operated ships entering the service. The funding is provided by Waka Kotahi through the National Land Transport Programme.

“This will ensure the industry is more viable, allowing investment in skills development and so will help create stable, long-term employment for mariners in this vital sector which is great news as the economy recovers from the disruption caused by the pandemic," says Wagstaff.

“This is also another example of the Government being prepared to tackle some of our long-term challenges. Coastal shipping can play an important role in building a lower carbon economy by helping to switch freight from roading transport to shipping which is a lower emissions mode.

“As well as environmental benefits, the expansion of coastal shipping will contribute to regional development and build resilience in our national supply chains which have been impacted by Covid.

“Improved coastal shipping means more options for freight transport, more jobs and a stronger economy and we commend the Government for taking this step,” says Wagstaff.

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