Job losses are possible at Port Otago as the company restructures in the face of an expected 42,550 fewer container movements in the coming year, and a likely $4 million loss in revenue.
Port management announced its restructuring plans in a letter to staff which called for savings and greater efficiency across the whole business, with voluntary redundancies among the workforce of 320 people a possibility.
September 23 has emerged as a key date for the port, when management would make public restructuring plans, after meetings between management and the Maritime Union of New Zealand (Munz) and the Rail and Maritime Transport Union of New Zealand.
Munz Port Chalmers secretary Phil Adams said staff would present cost saving proposals to management.
"Our members haven't sat back and said: `Bring on redundancy.' They are looking at ways to save money and save jobs."
In the letter to staff acquired by the Otago Daily Times, chief executive Geoff Plunket said a series of decisions by shipping lines over recent months had meant ship visits were reduced from six weekly and one fortnightly container ship visits as at June 30, to four weekly visits.
This included the loss of business from JKCS and Cosco, and the MSC transtasman shipping business, plus the withdrawal of coastal shipper Spirit of Endurance.
Last month Fonterra announced an end to transhipping up to 25,000 containers a year from New Plymouth and Timaru through Port Otago.
There had also been the loss of 1461 containers from Fisher and Paykel, and 1159 from the now closed Brightwood sawmill.
Mr Plunket said he hoped organic growth would replace those.
"Our position has been seriously eroded and our planned throughput for full year 2010 has dropped to 175,000 teu," Mr Plunket wrote.
"In the past financial year the company handled 98,600 containers, which was up 10% on the previous year.
"While increased container traffic from Fonterra's Edendale plant and its new Mosgiel storage hub would be a boost, Mr Plunket said it would not conpensate for container traffic losses.
"Port management intended continuing to invest in the company, but Mr Plunket said in the medium term, container growth was "minimal against the losses incurred".
"Those developments include widening the channel and a third crane to handle the large 4100-container ships.
Mr Plunket said any development would have to be made off "a significantly lower fixed-cost base".
The strength of the exchange rate could also hinder short-term growth in container trade, as it might constrain exporters.
"A return to growth is likely to be steady rather than spectacular and will come from a base of around 175,000 teus."
Mr Plunket said the Maersk shipping line now accounted for 80% of port container business, which would restrict its ability to get improved shipping rates.
Port management and workers have been in dispute over plans to introduce a vessel operations team which the Munz says would reduce pay and conditions.
Mr Plunket said the company still wanted to implement the project, but at a lower level.
He said in an interview yesterday Port Chalmers' reputation as a sheltered, deep water, natural port remained, as did Port Otago's reputation as a skilled and efficient operator.
The global recession was a challenging time for all shipping companies, he said, which placed all sectors of the supply chain under pressure.
In the past financial year Port Otago paid a $2.5 million dividend to its sole shareholder, the Otago Regional Council.
Port Otago
Container numbers lost in past year:
Cosco 5500NYK 1200
MOL 2000
Butterfly (MSC/ANL) 2500
Fonterra Lyttelton Port Company 17,000
Fonterra New Plymouth 15,600
Container number gains:
Fonterra Edendale 1250
Total loss 42,550
Expected revenue loss $3.968 million
