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Levies come under fire at Napier Port

NZ Shippers Council chairman labels insurance recovery charge an alarming precedent

Levies come under fire at Napier Port

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Industry groups have voiced concerns about new levies proposed and introduced by New Zealand’s Napier Port.

An insurance recovery levy was applied to the port’s customers on 1 October, with exporters and importers slugged an additional NZ$0.47 per tonne for bulk cargo. The port’s operators introduced the levy to cover an extra NZ$2m in insurance premiums, which rose after the Kaikoura earthquake.

Mike Knowles, chairman of the NZ Shippers Council, labelled the move an alarming precedent.

“What we’re seeing is a levy that lands on those who have no contractual relationship with the port and therefore no ability to influence the outcome,” Knowles explained.

“In our view ports should either be absorbing those increased costs as part of normal business activity, or negotiating them with their commercial clients – the shipping lines; not imposing them on parties who have no ability to review and negotiate rates.”

Napier Port chief executive Garth Cowie said concerns over the insurance levy were raised at a recent industry meeting, prompting the organisation to reassess its overall weighting on all customer groups. Cowie told the NZ Herald that the levy was being applied to all port users, with bulk cargo customers being charged on a "fair and equitable basis".

"Napier Port has looked at all options for absorbing part of some of the NZ$2.16 million increase in insurance costs. It is simply not possible for the port to absorb it given the quantum of the increase,” Cowie explained.

Napier Port has also proposed a new levy on pipfruit exports during peak season. The added rate is reported to be NZ$100 per TEU refrigerated container.

Port representatives told peak body NZ Apples and Pears that the levy would help cover additional costs incurred during the March to July peak season. This included the development of new infrastructure and the employment of additional staff to handle the growing volume of pipfruit passing through the port.

NZ Apples and Pears chief executive Alan Pollard believes additional operating costs should be spread across all of the port’s customers.

“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,” Pollard told Radio New Zealand.

"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. "




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