4 Oct 2017

Pipfruit industry alarmed at new port fees

10:47 am on 4 October 2017

The Hawkes Bay apple industry is negotiating with Napier's port over two proposed levies the sector says could cost it millions of dollars.

Napier Port

The port company's chief executive said the $95m had been spent on infrastructure over the past five years, most of it for the peak pipfruit season. Photo: 123rf.com

The first levy is to cover an extra $2 million in insurance premiums, which have risen because of quake damage in Lyttelton and Wellington.

The second is aimed at the pipfruit sector during peak season. The port is proposing a fee of $100 per 20,000-foot refrigerated container, starting in February.

NZ Apples and Pears Inc. chief executive Alan Pollard said this would be a significant charge, amounting to more than $2m.

"Our concern of course is to work with the port to see why they believe such a charge is justified and whether or not the apple industry is being targeted.

"We are one of the major clients of the ports, we add significant value to their asset base, we want to make sure that given the port is a monopoly supplier that they're acting reasonably and commercially.

"Our view probably is that the surcharge is probably not justifiable, but we need to work through the port's logic with that and see if we can come up with an outcome that satisfies us both. "

Mr Pollard said port representatives told his organisation it had had additional costs during the March to July peak season and it was appropriate to get this back from the industry.

But he said operating costs from the port should be spread across all its customers.

Napier Port chief executive Garth Cowie, in a statement, said the port had spent $95m on infrastructure over the past five years, most of it for the peak pipfruit season as exports continued to grow.

The extra investment for the apple industry included a new off-wharf empty-container depot, more electrical towers to allow higher stacking of refrigerated apple containers, additional mobile harbour cranes and forklifts, and extra staff to support the workload during the peak season.

Mr Cowie said the investment needed to support the apple industry significantly outweighed the port's current return.

The insurance recovery levy of $0.47 per tonne for bulk cargo customers had been implemented from 1 October to recover insurance premiums, which increased by $2.16m a year.

For container customers, it will cost $8.25 for every container going in and out of the port.

The Shippers Council, which represents big exporters such as Zespri and Fonterra, argues the new fees are unfair and that actions taken by the port could become a precedent, which would be followed by others across the country.

Mr Cowie said he was simply passing on unavoidable insurance hikes, after the port company absorbed them for three months.

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