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New Zealand’s Earthquake Risk Increases Port Costs

New Zealand’s Earthquake Risk Increases Port Costs

New Zealand’s shippers and truck drivers are opposing higher charges imposed by Napier Port after premiums skyrocketed due to recent earthquakes.

The natural risks presented by the island’s position in the Pacific Ocean has resulted in an insurance levy cost, upsetting exporters and transport companies.

A large proportion of the country's shippers, and truck drivers have presented their arguments through the New Zealand Shippers' Council and National Road Carriers.

New Zealand’s importers and exporters were under pressure to keep cargo moving after the November 14, 2016, earthquake closed Wellington's container terminal.

Mike Knowles, Chairman of the NZ Shippers Council, said: “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.

“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.”

In a statement, Knowles said the Shippers Council appreciated the “considerable pressure” that the Kaikoura earthquake placed on providers of supply chain infrastructure.

He added: “However, applying a levy on parties who do not have a commercial relationship with the port is not the way forward. We are extremely concerned that this precedent may be adopted by other ports and will strongly oppose any move in that direction.”

Learn more about how natural disasters, such as coastal hurricanes and rainfall flooding, can create major impacts on marine transportation in the 'Natural Disaster Risk: Geospatial Assessments for Resilient Infrastructure' technical paper