New Zealand (NZ) is a relatively small nation by traditional measures. With a total land mass of just 263,000 square kilometres, a population of around 4.5 million and GDP of around $240 billion, the nation is considerably smaller than its closest neighbour, and largest trading partner, Australia. However, notwithstanding its relatively small size, NZ is a significant player in the Asia Pacific maritime sector and is rapidly developing into a major transhipment hub in the South Pacific. In the year ended December 2014:

  • 37.7 million tonnes was of product was exported out of NZ sea ports; and
  • 21.3 million tonnes of product was imported into NZ sea ports,

with a combined value of more than $87.7 billion.

Whilst imports and exports make up the majority of total loads/discharges, NZ sea ports continue to process a significant volume of transhipped/re-exported goods – predominantly through Port Taranaki (of which 90% of total goods moved in 2014 comprised transhipped goods) and Port Nelson (of which 40% of total goods moved in 2014 comprised transhipped goods).

This most recent annual data collected by the NZ Ministry of Transport silences any doubt that NZ's tenacious shipping industry is in robust health. If current trends continue, one would expect to see the level of activity in NZ sea ports increase in the short to medium term.

As is the case in Australia, coastal shipping is an integral component of NZ's domestic freight tasks. However, in contrast to Australia's present cabotage laws, NZ has taken a fairly modest approach to the regulation of coastal shipping.

To what extent is coastal shipping regulated in NZ?

In short, not much. NZ coastal shipping is regulated in the main under Section 198 of the Marine Transport Act 1994 (NZ) and related provisions of the NZ Ship Registration Act.  The terms of Section 198 are limited in scope and are flexible in design, following a move to a more liberalised approach to a range of public policy areas in the 1990’s.

In summary, Section 198 restricts access to coastal trade to:

  • NZ ships;
  • foreign ships on demise charter to a NZ based operator; or
  • a foreign ship that is passing through NZ waters while on a continuous journey from a foreign port to another foreign port, and is stopping in NZ to load or unload international cargo.

How does the approach in NZ compare to Australia's current and proposed cabotage laws?

Notwithstanding the geographic proximity and close trading relationship, there are key differences between the NZ approach, the current Australian position under the Coastal Trading (Revitalising Australian Shipping) Act 2012 (The Act) and the Government's proposed laws for coastal shipping (as set out in the Shipping Legislation Amendment Bill 2015).

The table below sets out the key differences between the three regimes.

Click here to view table.

What will the future hold for coastal shipping in NZ?

As will be apparent from the above table, NZ's cabotage laws are in contrast to the bureaucratic and inflexible laws that shippers and carriers presently endure in Australia.

Whilst there are some industry stakeholders in NZ calling for the re-introduction of tighter regulation (most significantly after the Rena incident in 2012, to ensure appropriate safety and environmental protection) these suggestions have, so far, not led to any formal commitment to review the current regime.