Summary

Port Otago is going to deepen the shipping channel to Port Chalmers to accommodate larger container ships.

With resource consent to deepen the channel to a maximum of 15 metres for larger ships Port Otago will become the first port to begin actual dredging. The first milestone will be to deepen to 14 metres and this will be done in two stages; deepening of the existing channel to 13.5 metres by the end of 2015 and to 14 metres by December 2017. By utilising its own dredge, the New Era, to complete the work and with more than 50% of the existing channel already at 14 metres, the cost of completing the first stage is projected to be substantially cheaper than any other port in the country.

As container ships inevitably increase in size, the ability to handle these ships will determine which ports remain relevant to the international supply chain. Ports that can handle larger ships will become the premier ports on the New Zealand coast and over time, growth will be concentrated on these key gateway ports.

Port Otago first to deepen

Port Otago is pleased to announce that it has commenced dredging activity in the Otago Harbour, in line with its consents, to deepen the shipping channel to Port Chalmers. The Port’s ability to remain an effective and efficient link in the international supply chain is critical to the viability of Port Otago Limited (POL), shipping lines and our local exporters and importers. To remain an effective and efficient link in the international supply chain, Port Chalmers must be able to accommodate larger container ships as they arrive on the New Zealand coast.

Port Otago was the first New Zealand port to secure consent to deepen its channel for larger ships and it will be the first New Zealand port to begin actual dredging. Only one other port has consent to deepen at this stage and their dredging programme is not expected to start before the end of 2015.

Port Otago is already the deepest container port in the country at 13 metres (chart datum or low tide) and unlike other ports, it can handle vessels at all stages of the tide. Some ports, even though they may dredge their channel to a similar depth as Port Otago, will only be able to receive ships on slack water (the top or bottom of the tide) due to their strong tidal flows.

The current consent provides the ability to deepen the channel to a maximum of 15 metres but Port Otago currently plans to deepen to 14 metres. This will be done in two stages, deepening the existing channel to 13.5 metres by December 2015 and to 14 metres by December 2017. Port Otago will predominantly utilise its own dredge, the New Era, to complete this work. Heron Construction Co Ltd will provide additional dredging services in the Port Chalmers berths and approaches, as well as removing rock in the few areas where this occurs in the channel.

Port Chalmers has always been a key link in New Zealand’s international supply chain by virtue of the high-value cargo available from our productive hinterland. As container ships inevitably increase in size, the ability to handle those ships will determine which ports remain relevant to the international supply chain. The ports that can handle larger ships will become the premier ports on the New Zealand coast and, over time, growth will be concentrated on these key gateway ports. They will draw in more cargo (either through feedering or increased production) to support the larger ships calling.

Investment in channel deepening is entirely consistent with the recommendations of the Ministry of Transport’s Future Freight Scenarios Study (2014). Our ability to handle larger ships will have significant benefits for regional shippers in reducing supply chain costs and improving connectivity to key markets. Our ability to handle larger ships will also underpin POL’s own financial performance by positioning the Port for cargo aggregation and volume growth in excess of year-on-year, organic growth levels.

Building a Sustainable Primary Deep-water Port