Posted by Rita Mu
Fonterra and meat processor Silver Fern Farms have partnered to form a new freight management company to help improve New Zealand’s supply chain operations.
The new company, Kotahi, will aim to match supply and demand for freight services on land and sea to get New Zealand products to overseas markets more efficiently.
Managing Director of Fonterra Trade and Operations, Gary Romano, said the development of Kotahi was critical to help New Zealand businesses remain competitive in global markets.
“Export earnings are New Zealand’s bread and butter, just last year the collective return was over $40 billion,” he said. “This is a great success story but as the world changes there is a real risk we will be squeezed out. We are the most remote developed country in the world relative to international markets and the way we get our products to and from these markets is critical to continued success.
“International companies, including shipping, are reshaping their business models to adapt to changing markets. If New Zealand is serious about being a truly global player we have to show leadership in areas like freight management.”
Chief Executive Officer of Silver Fern Farms, Keith Cooper, said small exporting companies would benefit greatly from Kotahi’s services.
“At present, many smaller companies are handicapped because individually they ship relatively low volumes and don’t have consistent freight needs throughout the year,” Cooper said. “Through Kotahi’s ability to match supply and demand for freight across a variety of imports and exports we will be able to create efficiencies along the entire supply chain.”
Cooper said exporters like Silver Fern Farms are facing a loss of international business if ocean freight services continue to decline.
“New Zealand is effectively the last bus stop on the planet. We are pitched against international companies that are much closer to our markets,” he said. “Our ability to compete comes back to having efficient and reliable freight networks that offer quicker transit times and solid schedules. If we fail at this we put our exporting success story in serious jeopardy.”
Cooper said Kotahi will also work in favour for freight owners and carriers by giving them more certainty around the country’s shipping needs.
“New Zealand exports are characterised by seasonal fluctuations and volatile demand. By coordinating our freight needs we will be much more consistent in our scheduling and will be able to better utilise freight capacity going north and south, on both land and sea,” Cooper said. “This means we will be able to attract better shipping schedules and bigger ships as well as reducing our carbon footprint by getting better at using what we’ve already got to full capacity.”
Kotahi will begin operations on 1 August. The company is estimated to service one third of all containers that leave New Zealand’s shores.