Freight Partnership To Drive NZ Competitveness05 July 2011
NEW ZEALAND - Fonterra and Silver Fern Farms have launched Kotahi, a partnership that aims to bring New Zealand’s exporters and importers together to lift the performance of the country’s supply chain.
Kotahi will match supply and demand for freight services on land and sea to get New Zealand products to distant markets around the world more efficiently.
Gary Romano, Managing Director of Fonterra Trade and Operations, says Kotahi will create a sea change that will help New Zealand businesses be more competitive in global markets.
“Export earnings are New Zealand’s bread and butter, just last year the collective return was over $40 billion. This is a great success story but as the world changes there is a real risk we will be squeezed out. We are the most remote developed country in the world relative to international markets and the way we get our products to and from these markets is critical to continued success.
“International companies, including shipping, are reshaping their business models to adapt to changing markets. If New Zealand is serious about being a truly global player we have to show leadership in areas like freight management. This is about taking the New Zealand economy to the world.
“The real driver for Kotahi is establishing an efficient and secure supply chain service that will ensure New Zealand businesses are able to operate with certainty and compete on a global scale,” he says.
When Kotahi starts operating on August 1 it will service approximately one third of all containers that leave New Zealand’s shores.
“We see real value in bringing freight management and purchasing into one partnership. At present, many smaller companies are handicapped because individually they ship relatively low volumes and don’t have consistent freight needs throughout the year. Through Kotahi’s ability to match supply and demand for freight across a variety of imports and exports we will be able to create efficiencies along the entire supply chain,” says Keith Cooper, CEO Silver Fern Farms.
Mr Cooper says exporters like Silver Fern Farms are facing a loss of international business if ocean freight services continue to decline.
“New Zealand is effectively the last bus stop on the planet. We are pitched against international companies that are much closer to our markets. Our ability to compete comes back to having efficient and reliable freight networks that offer quicker transit times and solid schedules. If we fail at this we put our exporting success story in serious jeopardy,” he says.
Kotahi’s establishment will also work in favour for freight owners and carriers by giving them more certainty around the country’s shipping needs.
“New Zealand exports are characterised by seasonal fluctuations and volatile demand. By coordinating our freight needs we will be much more consistent in our scheduling and will be able to better utilise freight capacity going north and south, on both land and sea. This means we will be able to attract better shipping schedules and bigger ships as well as reducing our carbon footprint by getting better at using what we’ve already got to full capacity,” says Mr Cooper.
The initial response from New Zealand business has clearly shown that there is a need for a partnership like Kotahi.
Flemming Gamst, whose brokerage Matchbox Brokers oversees a lot of New Zealand’s apple exports, says: “The creation of Kotahi is an important step towards like minded exporters and importers working together with service providers to achieve the most efficient and sustainable supply chain, jointly driving better value from supply chain assets. It is great to see Fonterra and Silver Fern Farms taking a leading role in what’s an important initiative for New Zealand Inc.”
Iain Hill, General Manager for KiwiRail Freight, says: “KiwiRail applauds the Kotahi initiative for recognising the advantage of managing freight demand across industries. The critical role of rail as a neutral line-haul provider will complement this new service offer to the market.”
Kotahi will first create a robust operating model for its partners’ freight before taking new customers on board in the coming months. Appropriate authorisation from the Commerce Commission will be sought for Kotahi.
TheCattleSite News Desk