Global shipping giant Maersk pulls New Zealand coastal service

Global shipping giant Maersk pulls New Zealand coastal service

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Shipping Containers at Timaru Port

(File image)
Photo: RNZ / Nate McKinnon

There are concerns for New Zealand’s supply chain security after global shipping giant Maersk announced it would pull its national shipping service.

Maersk said it would withdraw its dedicated New Zealand coastal service, known as Coastal Connect, from next month – after less than a year in operation.

As part of the service, two vessels linked between various ports including Auckland, Tauranga, Timaru, and Lyttelton, and Nelson.

Instead, the company will now upgrade its trans-Tasman Polaris service to a weekly service.

But the Maritime Union said the move was a step backwards for New Zealand’s supply chain security, with between 36 and 38 staff being made redundant.

Union national secretary Craig Harrison said the sudden withdrawal of the Coastal Connect service showed the volatility and insecurity of New Zealand’s supply chain.

“This continual market volatility is bad for New Zealand and will have a flow-on effect to importers and exporters, and thus the whole economy,” Harrison said.

The union’s Auckland branch secretary, Russell Mayn, said costs might also go up as a result of the changes.

“The cost of putting goods through an Australian port is a lot higher than a New Zealand port, so you would think that it must [costs must go up],” Mayn said.

In response, Maersk said the changes would enhance New Zealand supply chains with improved flexible services and better connections to overseas markets.

“We continue to invest in the New Zealand market with additional vessels being added to our network to limit impact from the current disruption, including an additional vessel on our J-star Service (connecting New Zealand with North East Asia) where we added a seventh vessel earlier this year,” a company spokesperson said.

“[We have also added] an additional (10th) vessel on the PANZ service (connecting New Zealand with the US West coast) and upgrading the Polaris service to a three-vessel system.”

Maersk said it was not motivated by cost cutting.

“The key driver for the change is not cost but rather how we improve supply chain stability for our customers while offering more flexible network solutions,” the spokesperson said.

Maersk said the total number of local staff affected by its Coastal Connect withdrawal was 60, and the company was working with unions on alternative employment opportunities.

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