A new joint venture aims to provide Kiwi SME exporters a greater presence and an improved representation at the negotiation table with the world’s largest international shipping companies in the wake of changing global trends.
Oji’s logistics arm Lodestar general manager Murray Horne says the joint venture is of strategic importance to Oji Fibre Solutions as it moves to strengthen reliability across its export supply chain. “Due to the global over- supply of shipping capacity, there has been significant downward pressure on ocean freight rates to a point where some rates are at historic lows. This is not a sustainable position for the industry, and it is already impacting on shipping services across New Zealand.”
Horne says that whereas three years ago there were around 12 or more separately owned and operated shipping lines servicing the New Zealand market, there are now only seven due to recent merger and acquisition activity. “Through this joint venture we want to ensure that a range of shipping services continue to support the New Zealand market, and we will use our scale and market presence to help drive that outcome.”
The newly appointed general manager of Bearing360 Dritan Ramohitaj says the intention is to help keep the market sustainable for shipping lines by levelling out cargo flows to improve predictability. “The shipping lines fix their schedules and vessel sizes in advance, largely in anticipation of expected cargo volumes. We will be relatively consistent with our cargo by levelling out the large ups-and-downs to provide a more reliable base of container volumes.
“Ultimately, shipping lines can then get better utilisation of their vessels, which should reflect more sustainable pricing for our customers. Ramohitaj says the new service is also about reversing the trend towards the ‘commoditisation’ of container shipping. “We have the expertise to provide a comprehensive service offering. We take responsibility for the cargo, manage our own warehouses, pack our own containers, coordinate the transport, and operate our own fleet of break bulk vessels, providing visibility throughout the whole process. That is somewhat unique in the New Zealand market. We are the freight company with dirt under our fingernails.”
The innovative model has been enabled through technology provided by Netlogix which has successfully built a freight service business in the domestic market. The technology is based on a platform that links otherwise disparate truck companies, allowing customers to send cargo across the country via the most efficient manner.
Netlogix chief executive Chin Abeywickrama says that the company worked with Oji Fibre Solutions to build an online portal for the venture that will allow exporters and importers to easily access a comprehensive network of global shipping lines, which may help the lines more accurately predict cargo volumes. “We recognise that we cannot influence the global market,” he says. “Therefore we are trying to use our combined scale to do what we can on the local level to maintain relevance and ensure the continued level of choice and frequency of services to New Zealand.”
Oji Fibre Solutions is a pulp, paper and packaging company owned by Oji Holdings and Innovation Network Corporation of Japan. The majority of Oji Fibre Solutions operations are based in New Zealand, employing 1700 people. Eight packaging operations in New Zealand and Australia produce a range of corrugated board packaging products and paper bags principally for the horticulture, dairy, meat and beverage industries.