Expanding efficiencies leads to increased volume with fewer ships

South Port New Zealand (South Port) has marked a significant milestone with its recent half-year financial results, reflecting a period of operational improvements and enhanced efficiency.

The port, which serves as a crucial hub for southern New Zealand’s logistics and transport network, has successfully increased the volume of cargo handled while operating with fewer container vessel calls.

South Port’s Half-Year Financial Year 2025 Results highlighted 131 calls by large vessels, an increase of 11 per cent (first half of 2024: 118), a direct reflection of the increased bulk cargo flows through the port.

Total cargo activity was 1,691,000 tonnes compared with 1,488,000 tonnes in 1H24. This represents an increase in cargo flows of 203,000 tonnes or 13.6 per cent. Increased tonnages in comparison to the prior half year were logs (+31,000 tonnes), fertiliser (+41,000 tonnes), woodchips (+59,000 tonnes) and stock food (+143,000 tonnes).

Due to the temporary closure of a potline at Tiwai Point, raw material imports and aluminium exports decrease in 1H25. New Zealand Aluminium Smelter (NZAS) is expected to return to full production by April 2025.

But as smelter activity represents 30 per cent of South Port’s cargo volumes, the closure played a large part in decreases in alumina imports (-53,000 tonnes) and aluminium exports (-34,000 tonnes). Container volumes were similar with 20,600 twenty-foot equivalent unit (TEU) handled through the terminal (1H24: 21,000 TEU). These volumes were handled on fewer container vessels, 13 in 1H25 (17 in 1H24).

A key factor of the increased bulk cargo is the completion of the Kia Whakaū dredging project, a long-anticipated initiative aimed at improving the port’s capacity and efficiency.

A project that dates back to 2022 when South Port was granted resource consent by Environment Southland, Kia Whakaū saw the dredging and removal of seabed materials to 9.7 metre chart datum (CD) in the harbour entrance channel, 10.7m CD in the Island Harbour berth basins, and 9.45m CD in the swinging basin.

The benefits of removing the high points in the channel and increasing the current operating draft by 1 metre have assisted with improving safety margins for ship movements and provided greater capacity for vessels to take on additional cargo.

A major project for South Port that will continue to benefit the region’s customers for years to come, the project resulted in significant improvements to facilitate the best logistic solutions, particularly for bulk vessels.

CEO Nigel Gear explains that while large vessels have been calling at Bluff for some time, draft restrictions limited their ability to maximise their load capacity.

“The idea behind the Kia Whakaū project was to gain greater depth, which allows for better utilisation of the existing vessels calling at the port. Previously, we were unable to fully load log and woodchip vessels. Now, with greater draft depth, we can. So, that additional metre has made a big difference.

“This has led to better efficiencies throughout the supply chain, benefiting industries such as agriculture and forestry by allowing for larger shipments and reducing overall logistics costs.

“The project has also offered a lot more opportunity out to the market. And these vessels, as I say, that were already calling, so while it hasn’t led to an increase in the size of the vessel calling at the port, it has provided better efficiencies.

“It’s great for everyone: it creates more efficient supply chains, which leads to cost savings, which leads to opportunities for taking more cargo out each time a vessel calls.”

Among the benefits being realised:

• A number of woodchip vessels have loaded in excess of 40,000 MT, as a one-port call, that previously required a two-port call in New Zealand before heading to markets in Asia.
• The MSC line’s Wallaby service to Australia is loading and discharging additional containers per call.
• Vessels containing bulk agricultural and NZAS imports have greater payloads than were previously achievable.
• More vessels are able to move on both high and low tides.

The Kia Whakaū dredging project represented the first major deepening of the entrance channel, swing basin, and berth pockets at South Port in 40 years. Unlike routine dredging operations that deal with sand and silt, this project required the removal of fractured granite rock from past blasting campaigns in the 1970s and 1980s.

Fortunately, advancements in dredging technology meant that this process could be completed without the requirement to drill and blast.

“We were fortunate that a significant portion of the rock had already been fractured and moved from previous blasting campaigns. This allowed us to remove the material more efficiently, making it a very successful project.”

While increased efficiencies gained from the Kia Whakaū project have raised questions about future deepening projects, Mr Gear says any further deepening would require extensive drilling and blasting due to the nature of the rock and therefore significant investment. Any future expansion would need to be justified by a strong business case, likely tied to a specific project or cargo opportunity.

While ship size hasn’t changed much in the south, Maritime Union of New Zealand (MUNZ) National Secretary Carl Findlay says that is not so nationally as the size of ships coming into New Zealand ports has increased, as part of a global trend.

However, as New Zealand is a smaller market than many destinations, he says we don’t see the largest modern ships. In addition, New Zealand ports are small by world standards.

“Ports around New Zealand are continuing to upgrade their ability to service larger ships, but MUNZ is concerned about this being driven in a piecemeal and parochial manner by competing ports. MUNZ has called for a national port strategy ‘KiwiPort’. Our view is that the current model of individual ports competing for market share has not served New Zealand well.

“The only benefit of this situation is for global shipping lines that play off ports against each other, with duplicated infrastructure leading to inefficient use of resources and destructive competition undermining wages and conditions for port workforces.

“There needs to be a co-ordinated national plan for our ports to ensure they remain held in public ownership as strategic assets, with consideration given to the development of a ‘hub and spoke’ model with regional ports serviced by New Zealand flagged and operated domestic vessels.”

Of greater concern to MUNZ is the many ships visiting New Zealand flying “flags of convenience” that have multiple issues around their seaworthiness and safety, a problem MUNZ says is acknowledged by the industry regulator Maritime NZ.

“MUNZ has a strong view that New Zealand, as an isolated maritime trading nation, needs to rebuild its own shipping capability, both domestic and regional. This would ensure high-quality vessels, provide reliability and security to the supply chain, and maintain a maritime skill base.

“There is potential for larger vessels to not call at New Zealand ports, and we saw this during the COVID disruption when scheduled services missed calls or were cancelled, leading to serious disruption. A similar crisis in the future could easily see a repeat of this issue. New Zealand is not prepared.”