A report commissioned by the Shippers' Council warns that New Zealand will seriously damage its trade performance if it fails to accommodate bigger ships.
Ninety-nine percent of cargo to overseas markets goes by sea.
The Shippers' Council, made up of exporters such as Zespri and Fonterra, says the reduction of services, due to ports not being able to accommodate ships holding more than 6000 containers, is already having an effect on trade.
Chair Greg Steed says if the current level and quality of shipping services is lost to South-East Asia, exporters face increased costs of $194 million a year to send products via Australia.
He says it would cost only about $200 million to upgrade two ports.
The report says Tauranga and Lyttelton are the logical choices to start investing now but Auckland and Otago will also need to spend more to increase projected cargo growth.
