Fonterra sees fewer ports as a way to drive efficiency

Posted by Isobel Drake on 13th August 2009

Fonterra, the world’s largest dairy exporter, said today it was looking at consolidating its port usage as part of a drive towards greater efficiency in its supply chain for exports out of New Zealand.

Fonterra’s General Manager Supply Chain Strategy, Nigel Jones, said the changes were about improving service to Fonterra’s global customers and reducing costs by moving containerised product away from indirect (feeder) services to direct export services.

He said the Co-operative had been discussing its plans with logistics service providers, and would be channelling greater export volumes of product out of the ports of Auckland, Tauranga, Lyttleton and Napier. As a result of these changes, Fonterra will reduce the volume of product moved through the ports of Taranaki and Timaru by 65% and 80% respectively.

“These changes are about making the best use of shipping services out of New Zealand and the country’s ports – to serve our customers and ultimately, through efficiencies, put more money in our farmers’ pockets,” he said. “A good example is Port Taranaki. We’re moving from a position of having one indirect service to South East Asia per week to more than a dozen sailing options. That makes a lot of commercial sense when you’re managing tight inventory levels and delivery windows to customers.”

“Historically there has been significant cross subsidisation of indirect services through regional ports by ocean carriers. And our customers are demanding ever increasing levels of service delivery.”