Global Shipping Industry Woes Amid COVID-19: Glance at Napier Port, Port of Tauranga


  • Shipping industry plays a crucial role in world trade and is the backbone of the world economy.
  • The industry, amid the COVID-19 crisis, is experiencing challenges because of the travel restriction.
  • ~400k crew members are stuck at sea. Seafarers with non-COVID-19 related medical emergencies are not allowed to enter the port.
  • New Zealand has successfully managed the coronavirus situation.
  • NZX-listed shipping and port companies like Napier Port have started progressing towards dredging for 6 Wharf. This would prevent congestion at the port.

In the present times, almost every sector has experienced the impact of the coronavirus pandemic. The biggest threat is coming from the shipping industry as recently, the International Chamber of Shipping reported that the seafarers are being denied medical attention by the port authorities. In several instances, the seafarers with medical conditions not linked to SARS-CoV-2 were not allowed to enter the port and were denied medical evacuation.

The international shipping industry highlighted the growing peril for global trade from the worsening crisis on merchant ships. There are ~400,000 crew stuck either at sea or at home due to the travel restrictions.

Most of the crew members have worked beyond their respective contract duration, surpassing regulatory limits. According to Mr Guy Platten, ICS Secretary General, people cannot work for an indefinite period. Some crew members have been on the ship for more than a year.

ICS, which represents all sectors & trades, and more than 80 per cent of the world merchant fleet has issued new guidance for shipowners and operators to handle the unwell seafarers.

Around 80 per cent of the trade happens via maritime transport, and these updates appear as an alarm of another set of challenges like trade logjam in the future.

At present, ICS is putting efforts to aid its members and the shipping community to give advice, provide information, and offer suggestions to seafarers, shipowners, and the governments. The association also published guidance to ensure a safe shipboard interface amongst ship & shore-based personnel.

New Zealand’s Current Situation:

As per the media release from the Ministry of Health on 10 June 2020, New Zealand had not reported a single COVID-19 case in the last 19 days. Also, there are no active cases of the virus, making the country COVID-19-free.

The country, at present, is at Alert Level 1 and temporary restriction are in place. However, there are no limitations on freight movement.

With this backdrop, let us look at some of the NZX-listed companies from the shipping and port industry and see their recent updates.

Napier Port Holdings Limited (NZX:NPH)

Napier Port Holdings manages the Napier port which provides international port and logistics services. The Company offers cargo handling, cruise services, and marine services, among others.

Manawat? Inland Port providing cost efficiencies

Napier Port, in partnership with Maersk, and MSC, among other players, has witnessed a successful commercial trial at the Manawat? Inland Port with demonstrated cost effectiveness and becoming a shipping preference for both importers and exporters.

Napier Port to start dredging for 6 Wharf this week:

On 8 June 2020, Napier Port announced that it is on the way to commence dredging for 6 Wharf which would allow the port to reduce overcrowding and embrace more & bigger ships as vessel sizes increase and exports out of the region grow.

GPK, which is a backhoe dredge and operated by Heron Construction reached from Lyttleton on 8 June 2020, and the process of dredging will start this week. GPK would remain in the harbour for the next 18 months, and some dredge plume may be visible as the work begins.

A Glance at Half Yearly Results; Revenue rose 7.5 per cent

On 26 May 2020, Napier Port released unaudited financial results for the half-year ended 31 March 2020.

  • Revenue improved by 7.5 per cent to NZD 52.3 million as compared to the previous corresponding period.
  • There was a rise in the Container volume by 7.5 per cent to 135,000 TEU.
  • Bulk cargo volumes tumbled 7.3 per cent after the Chinese log market situations and the initial effect of COVID-19 demand disturbances.
  • Pro forma EBITDA improved by 2 per cent to NZD 21.5 million.
  • Results from the operating activities declined 1.6 per cent to NZD 21.7 million with elevated operating expenditures to provide for growth.
  • Pro forma NPAT during the period increased by 6.7 per cent to NZD 11.2 million.

Napier port feels that the trade outlook is ambiguous because of the COVID-19 crisis and wider economic conditions. Thus, to manage the economic effect on the business, the company recognized several ways to wisely protect the cashflow & the balance sheet considering its obligations related to the creation of 6 Wharf and looking after the folks associated with Napier port. These are:

  • Decrease of 20 per cent in the director fee pool for six months.
  • Suspension on renewal of wage & salary hikes for one year.
  • Certain cost cuts & suspensions across capital & operational expenses.
  • Acceptance of Government Wage subsidy.
  • Termination of interim dividend.


The Company is getting in touch with cargo owners to assess the impact of coronavirus trading conditions on them and the anticipated outlook for cargo volumes.

NPH stock closed the day’s trade at NZD 3.540 on 11 June 2020, a decline of 2.21 per cent compared to the previous close.

Port of Tauranga (NZX:POT)

Port of Tauranga Limited offers port and cargo handling services primarily for the forestry and farming industry. The Company generates revenue from providing port services, through rental income and rentals from investment properties.

Announcement of New Corporate Services Manager:

On 4 June 2020, Port of Tauranga announced Melanie Dyer as the new Corporate Services Manager who replaced the recently retired Sara Lunam and would join later in 2020.

Operational Highlights during Covid-19 Alert Level 3 at Port of Tauranga:

As per the market release on 28 April 2020, Port of Tauranga, during COVID-19 Alert level 3, implemented extensive measures to keep its people, trade, and community safe. The port users were required to use improved safety measures and follow hygiene practices.

Shipping /Vessel:

During Alert Level 3, Vessels was subjected to the improved border control processes controlled by government organizations.

Operational Staff:

Interaction between work groups was constrained for all operational workforce. Shared vehicles & equipment cleaned between users & immediate contact with the ship's crew were avoided except for those dressed in proper PPE. To avoid interaction between the work groups, the work was done in different shifts.

Office-based Staff:

Staff who were engaged in admin and other office-related work were working from home.

POT stock closed the day’s trade at NZD 7.180 on 11 June 2020, a decline of 2.31 per cent compared to the previous close.

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