The situation in the shipping industry, particularly in the container sector, is not going to change for some time. Over 300 container ships, with a combined capacity of over 800,000 TEU, were idle in early July 2016, supposedly the start of the Asian export peak season, while in July of the two previous years, less than a quarter of this capacity was idled.
This means the pressure on ports to keep costs down and performance up will remain. We expect to see continued consolidation in the industry and consequent changes in service patterns affecting New Zealand. Our forecast for container volumes for the 2016/17 financial year remains flat.
Our performance is already top-of-class and we think it is about as high as we are going to get through traditional port technology. Further improvements to performance will come about through innovation and technology, which is our focus for the future.
We have now agreed to partially automate our container terminal, the first New Zealand port to do so and the first world-wide to take this particular approach. We will maintain manual operation under our cranes in order to keep our productivity high, but will automate the yard and truck operations to deliver greater efficiency, more capacity and lower costs. When fully implemented in 2019 automation will give us a significant strategic advantage.
We are also looking to technology and innovation to lift performance in our Multi-Cargo operation. While cars do not stay long on our wharves – two and a half days on average – we will be looking for innovative ways to increase our capacity and get cars off wharf even faster.
Our partnership with Napier Port is an indication of the way of the future. Ports need to team up to get the best out of their own performance and get the scale needed to be able to deliver efficiencies the New Zealand supply chain really needs. Partnership is not just limited to between ports. We work closely with our customers and other supply chain partners such as KiwiRail to improve both efficiency and sustainability and we will continue to do so. We have more partnership projects in the pipeline that we hope to be able to share in the coming year.
Overall, we can look forward to some exciting years ahead as we meet the challenges of our industry head on, and make the transformation into the smart port of the future to lift our performance to a new level.
Our company is in good health, and that is down to our people. We would like to sincerely thank the board, management and all staff for their hard work and dedication throughout the year. We would also like to thank all our customers, suppliers, contractors and friends for their support. We look forward to working with them all again this coming year.
Chief Executive Officer