New Zealand is facing growing challenges in its freight and export logistics, with ocean shipping costs and reliability issues placing increasing pressure on the country’s competitiveness in global markets. Emma Parsons, chief executive of Kotahi, a joint venture between Fonterra, Silver Fern Farms, and Maersk that accounts for 30% of New Zealand’s containerised exports, warned that the country’s freight disadvantage is worsening due to a combination of global shipping disruptions and local infrastructure constraints.
Parsons highlighted that exporting a 20-foot container from New Zealand to Shanghai currently costs 30-40% more than sending the same container from Melbourne to Shanghai. This disparity is part of broader issues affecting New Zealand’s freight network, where ocean freight accounts for about 90% of the total cost to get a product to market. Despite efforts to improve efficiency on land through ports and road infrastructure, the high ocean freight costs remain a significant hurdle.
A key factor compounding the problem is the poor reliability of shipping services. Parsons revealed that approximately 45% of vessels do not arrive or depart on schedule, and 10% may miss ports entirely. This unpredictability seriously affects time-sensitive exports. For instance, exporters reliant on strict delivery windows — such as fruit exporters aiming to reach markets during specific festivals — suffer financially if shipments are delayed or diverted, as the value of their products can diminish substantially.
Global factors, including the aftermath of severe weather events like recent typhoons near Shanghai, continue to disrupt shipping schedules. Parsons noted that hundreds of vessels were held up outside Shanghai, aggravating delays and congestion further along the supply chain.
On the domestic front, Parsons pointed to the fragmented nature of New Zealand’s port system as a structural weakness. While the country has multiple ports, the scale and throughput of these are relatively small compared to international hubs. For example, New Zealand’s entire annual container throughput is processed by Shanghai in roughly three weeks. The country’s ports also tend to focus regionally, which some officials and analysts argue limits the potential for national coordination and efficiency improvements.
Parsons advocated for a more consolidated approach to port investments, with particular emphasis on expanding capacity at Port of Tauranga — the “backbone” of the North Island’s export network — and enhancing capabilities in the South Island. This strategic focus is seen as critical to accommodating the larger vessels increasingly used by global shipping lines, which offer improved efficiency and reduced carbon emissions. Supporting this view, fast-track approval was recently granted for Port of Tauranga’s Stella Passage expansion, which will extend container berths and dredge the harbor to handle these larger ships, potentially increasing annual container capacity from about 1.2 million to 2 million TEUs.
The Ministry of Transport and the Infrastructure Commission have both flagged fragmentation and regional focus in the port sector as challenges that could hinder New Zealand’s ability to adapt to global shipping trends, including vessel consolidation and service rationalization. Parsons also questioned New Zealand’s traditional emphasis on competition between ports, suggesting that this mindset may need to evolve to better serve the country’s export interests collectively.
Although ocean freight may not always attract widespread attention, Parsons stressed its fundamental importance to New Zealand’s export-driven economy. Without effective and reliable freight infrastructure, the country’s exporters risk losing ground in the competitive international marketplace. As such, coordinated action across government, industry, and other stakeholders will be necessary to address these pressing challenges.