Integrated transport company uses foreign vessels to cut costs

By Graeme Kennedy

Friday 22nd September 2000

MAKING IT EASY: Sarah Harrison says the transportation is totally seamless for the customer

A new transport company using capacity on foreign vessels around the coast is claiming cost savings of up to a third for domestic shippers moving inter-island cargoes.

Cubic Transport Services, a 50-50 venture between Auckland-based Tapper Transport and shipping agent Quadrant Pacific, has lifted business to around 300 containers a month from 10-15 when it started five months ago. It is targeting 700 20ft equivalent units (TEUs) by July.

The company carries full 20 or 40ft containers or consolidates smaller lots into single boxes, which are repositioned empty to South Island ports for the export trade after imports have been unloaded in Auckland.

Cubic Transport Services integrates the foreign coastal sailings with Tapper road transport at Auckland and Christchurch to offer what is believed to be New Zealand's first door-to-door coastal shipping service.

General manager Sarah Harrison (32) said international vessels making multiple port calls on the coast provided plenty of capacity at competitive rates.

"We are piggybacking on the efficiency of the vessels travelling south. They drop off most of their imports in Auckland. They have the capacity and they are going that way anyway," Ms Harrison said.

"About 95% of Cubic freight is carried on international vessels - all the major lines - and it works very well as we have all the scheduling and pricing regimes sorted out.

"Auckland manufacturers who want to get products to the South Island can put their cargoes in containers that have to be positioned there. The concept has been very well received and many transport companies are now using it as part of the solution they provide to their customers.

"A lot of logistics managers are trying to get costs down and we really start to come into our own when we can consolidate a 40ft box."

Shippers in the past have been charged a double slot rate when they consign a 40ft container rather than two 20-footers but Cubic Transport Services charges only 50% more for the bigger box.

"The basis of our savings is the lower slot charge and our relationship with Tapper Transport. The process is totally seamless for the customer as we can access the empty containers, organise transport, the international shipping line and documentation - it's a one-stop shop."

Ms Harrison has worked in the transport industry for 10 years, starting in sales and marketing with Courier Post before moving to New Zealand Rail's Translink and NZL Transport.

She then studied for two years at the Forest Research Institute in Rotorua to learn more about distribution of forest products before heading Cubic Transport Services.

Chris Tapper began Tapper Transport 18 years ago after working as an owner-driver with Freightways Group. He specialised in wharf cartage and had grown to a two-truck fleet when brother Simon joined him from a shipping company in 1984.

With a comprehensive client list with the usual cross-section for a wharf cartage operator, the company expanded to four trucks within three or four years when Andrew Scott, who was involved in trans-shipping bonded freight in repositioning containers, joined as dispatcher.

While Tapper Transport remained focused on the wharves, the two companies merged and Mr Scott joined the group as a third equal partner with the two brothers. The business has continued to grow and has 40 trucks and 85,000sq ft of space at Auckland and Christchurch.

"The milestone came for us in 1994 when we did a joint venture with two other carriers and a stevedoring company to open one of New Zealand's first off-wharf independent freight stations," Mr Tapper said.

"The industrial climate then allowed the watersiders to control all the unpacking, that all activity be kept on the wharf, but we tested it in the courts and won so containers could then go straight to our depot to be unpacked.

"In those days the average time to get cargo off the wharves was a week but it could be as long as a month. Now it is 24 hours and often less - we can get the container, take it to our depot, unpack it and have the goods available before the ship has left.

"Road transport is more expensive but cost depends on delivery requirements - it was once thought that you had to get product just-in-time but now managers are realising the difference between what needs to be there overnight and what needs to be there in a couple of days or a week.

"Significant savings can be made by splitting cargoes on urgency of delivery as time-sensitive and not so urgent goods attract different rates. No one was doing that in great depth but Cubic Transport Services has added that dimension, matching appropriate transport to price."

Qadrant Pacific chief executive Rodger Shepherd said his company had worked with Tapper Transport for many years and saw Cubic Transport Services as the answer to many domestic transport needs.

Agent for the Tasman Asia Line and several tramp lines carrying cargoes such as logs and bulk fertilizer, Qadrant has a nationwide sales force that will help sell space for their joint venture.

Cubic Transport Services grew from Mr Scott's 1980s concept of using empty containers for domestic transport use, first for consolidating smaller loads into a full box, then as full containers to carry Auckland manufacturers' goods to South Island markets.

Mr Scott said Cubic Transport Services could double the expected growth of 700 TEUs by July before shipping capacity became a problem, although availability of empty containers could become an issue.

"We are also moving cargoes northbound although that is nowhere near the value of the southbound business."

"A lot of South Island manufacturers can't compete in the north because of the cost of moving product to Auckland - needing to lower the landed cost per tonne is a common South Island problem but if they can get their costs down to where we are selling, they can compete."

Mr Scott said containers used in the domestic trade were weight-limited to 26.5 tonnes by a government ruling that raised international box maximums to 30 tonnes to increase competition.

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