www.viewpoint.net.nz - NZ Transport, Aviation, Logistics & Supply Chain Blog

Supply Chains are critical!

An interesting article about the importance of the supply chain from the NZ Herald this morning.

Here are a couple of excerpts

• Companies no longer compete for market share by differentiating their products. Technology is now so advanced that almost anything can be copied. Communication is instantaneous. The result is products don't compete. Supply chains do.
• "Few people realise that 10 per cent to 40 per cent of the cost of most goods is supply chain cost.
• "For example, 45 per cent of the cost of a leg of New Zealand lamb sold in the UK is supply chain cost."

Its great to see Geoff Vazey trying to get some positive spin around the supply chain. 

It also has a bit to say about Trevor Mallard's ‘dream’ of building a stadium on the Waterford. That would have been a disaster for New Zealands supply chain.

Ports of Auckland move 685,000 containers each year with 45% being export and 55% import.

Ports of Auckland and Tauranga end talks

I know that this is now old news, but Ports of Tauranga and Auckland have decided not to merge.

From the Herald

ARH chairwoman Judith Bassett said the board had decided not to support Tauranga's merger proposal, otherwise known as "Project Mako".

"With the aid of independent advice and having regard to our statutory obligations we have resolved not to support the merger of Ports of Auckland and Port of Tauranga," she wrote in a letter to Port of Tauranga chairman John Parker.

Deputy chairwoman Joce Jesson said: "The merger doesn't align with ARH's long-term strategic investment approach for both this equity investment and ARH's total $1.4 billion investment portfolio."

The risks "outweighed any identified possible benefits in relation to ARH's long-term strategic approach for the company", she said.

It would seem to the untrained eye that Auckland Regional Holdings (owned by the ARC) became the sticking point. This is hardly a surprise and one of my key questions at the beginning was “Practically how do a listed company, and a delisted company (owed by councils) effectively merge?”

Way to hard!

On another note a collegue and myself went on the Port of Auckland tour a couple of weeks ago and the cellphone pictures attached prove it. A nice sunny day in the middle of winter, a ferry ferry ride around the ports. It’s a hard life, but I would recommend the tour.

Auckland and Tauranga ports in merger talks

Talks of a merger between Auckland and Tauranga ports as reported in the NZ Herald bring mixed emotions for me.

"A merger would have major implications for all New Zealand ports, particularly in the North Island. The companies acknowledged there would be competition issues."

You think? And what happens after they have the largest market share, will they start behaving like Auckland and Wellington airports who make a disproportionate amount of money for the capital invested.

Tauranga, the country's No 2 container operator, set up the country's first inland port, Metroport, in June 1999 in South Auckland and it had been siphoning off Ports of Auckland business. ... With Tauranga's predatory tactics a constant threat, the pressure came on for Auckland to seek more of its business from the rural export hinterland south of Taupo.

Tauranga's Metroport was a classic example of a small company using guerrilla warfare to take on the big company and succeeding! Auckland then replicated it in lower North Island. If I were Auckland merging would be a great idea. I get back the volume I lost.

And finally two questions the Herald didn't answer. Practically how do a listed company, and a delisted company (owed by councils) effectively merge? Also I find the timing very interesting as Jon Mason has just left.

All that said. If they do merge it would be no different that any other big company with branches in various locations. It will also be interesting to watch the impact on Transport and Rail volumes.