Lost at Sea: Shipping in NZ through a Catastrophic Risk Lens

By Matt Boyd, Mike Hodgkinson, Nick Wilson

Listing to Port: Is this the marketplace for interisland ships NZ has been browsing? (Image credit: ChatGPT)

TLDR/Summary

• NZ's interisland and coastal shipping infrastructure is inadequate for global catastrophe scenarios that limit international shipping or liquid fuel supply to NZ.
• The recent history of failures including ferries and coastal ships highlights the vulnerability of interisland connections to any loss of component supply or international expertise.
• NZ heavily relies on road trucking (93%), which is fuel-inefficient and vulnerable to disrupted fuel supply or road damage.
• Coastal shipping capacity is low, limiting transport options.
• Key resilience options to protect against global catastrophic risks: Upgrade and diversify the interisland ferry fleet; Expand and modernise coastal shipping capabilities; Develop local biofuel production for shipping; Accelerate transport electrification; Improve rail infrastructure, including interisland rail capacity; Create redundancy in transport systems.
• Benefits include: improved catastrophe resilience, reduced emissions, better preparedness for various disasters.

Introduction

Aotearoa New Zealand (NZ) is supposedly a seafaring nation, but in case of a global catastrophe our interisland and coastal shipping infrastructure is far from being up to scratch.

Global catastrophic risks such as nuclear war, supervolcano eruptions, extreme pandemics, cyberattacks and solar storms threaten global infrastructure and could precipitate the collapse of global trade (see for example our Hazard Profile on nuclear war and NZ). NZ is the 'last bus stop on the route' and could suffer immense consequences that accelerate the risk of societal collapse.

NZ's transport infrastructure is extremely dependent on imported liquid fuel supplies, but also imported components for maintenance and repair. In the case of an extended period of trade isolation, the country may struggle to fuel and repair transport assets such as ships.

This is particularly concerning given NZ's recent track record of shipping maintenance woes, poor liquid fuel security status, and NZ's extreme dependence on road trucking for transport.

NZ needs to upgrade its shipping infrastructure and secure a minimum locally produced shipping fuel supply as a national public priority. This is to ensure food and essential commodities can be distributed around the country even in a severe global catastrophe.

For resilience, NZ would ideally use a balanced mix of transport options such as efficient locally controlled coastal shipping, electric rail, road trucking, and trans-Tasman shipping options that don't depend on global shipping routes. However, at present NZ is 93% dependent on the least fuel-efficient option of road trucking (which can consume double the fuel per container moved than rail or shipping).

Road trucking in turn is dependent on functioning and resilient Cook Strait ferries. But these ferries have a track record of failures in recent times, and in a global catastrophe, it may not be possible to conduct repairs that depend on imported parts and international expertise.

To avoid isolating the North from South Island, the interisland ferry fleet needs to be diverse, modern, well-maintained, have high capacity and redundancy. It also needs a secure fuel supply that doesn't depend completely on imported liquid fuels.

The Problem

The history of interisland ferry failures is worrying (see supporting links after this blog):

• In 1999 the Aratere suffered power failures shortly after entering service.
• In 2005, the Arahura experienced a major loss of propulsion power approaching Tory channel due to failure of a diesel generator.
• In 2006, the Aratere developed a significant list due to shifting cargo in heavy weather, causing minor injuries.
• In 2013, the Aratere was taken out of service after a fatigue fracture caused it to lose a propeller while crossing Cook Strait.
• In 2021, the Kaiārahi experienced a major gear box failure during a Cook Strait crossing.
• Throughout 2021 and 2022, there were sporadic cancellations across both Interislander and Bluebridge services due to various mechanical issues.
• In 2023 the Kaiārahi and Connemara both faced "engineering issues" in February causing widespread cancellations.
• In 2023, the Kaitaki lost all power due to a cooling system leak, drifting dangerously close to Wellington's south coast, with Wellington hospital going on alert for potential mass casualties.
• In 2023, the Kaitaki was out of service again with a gear box problem that required overseas experts to be flown in.
• In 2024 the Aratere ran aground in the Marlborough Sounds after a steering failure.
• In 2024 the Connemara lost power and started drifting in Cook Strait.
• In 2024 the Strait Feronia lost power coming into Wellington Harbour.
• There have also been multiple incidents of ferries colliding with wharves or other vessels.

These issues have resulted in frequent cancellations, delays, and stranded passengers, vehicles and freight. Plans to replace the aging ferries in the Interislander fleet with new hybrid-electric ferries failed to materialise and now the government has scrapped a planned upgrade to new vessels.

In response, KiwiRail announced increased ferry maintenance and scheduled longer periods in dry docks for serious maintenance work. Also, international experts were consulted to assess the ships' conditions and provide recommendations. KiwiRail has considered alternative options, including extending the life of existing ferries, leasing or buying second-hand ferries, and exploring new ferry designs with reduced landside requirements. Though none of these is a comprehensive and long-term resilience solution.

KiwiRail did report 97% ship availability and 85% on-time performance in February 2024, but as noted above, a single mechanical failure, or inability to access fuel could be disastrous for NZ's connectedness in a global catastrophe. Redundancy and the ability to troubleshoot locally are critical.

Importantly, the problems are not limited to interisland shipping. It is recognised that NZ has low coastal shipping capacity and efforts to improve coastal shipping services have also met with failures. For example, a 'she'll be right' NZ attitude to fitting out a beleaguered coastal barge ended in disaster this year as it ran aground near Westport immediately after being put to service.

We note Waka Kotahi's Freight and Supply Chain Strategy. There is a 3-year plan to analyse port connections, and a plan across 30 years to strengthen parts of the freight and supply chain system that are critical to national interest, but global catastrophe could strike at any moment. We applaud the goal of more freight being transported by rail and coastal shipping rather than road, but there is yet little evidence of sweeping improvements in resilience.

Future NZ Shipping? (Image credit: Midjourney)

Catastrophe Resilient Solutions

In 2023 we produced a report on increasing NZ's resilience to global catastrophe. In the chapter on transport, we provided resilience options including the need to:

• Accelerate electrification, including electric road and rail transport, short haul coastal shipping, and interisland air travel.
• Invest in research and development of the optimal methods for producing transport fuel locally in NZ, for example biofuel feedstocks such as canola, and developing food oil factories that can convert to biodiesel production.
• Explore how coastal shipping might employ wind assist technology to conserve fuel, be capable of running on biofuels, and quantify the minimum liquid fuel needs for shipping to move the most essential goods (eg, food) around NZ.
• Develop principles of land transport and shipping fuel rationing based on prioritisation of population basic needs in a global catastrophe.
• Collaborate with Australia on global catastrophe resilience to ensure that trans-Tasman trade can continue using just assets controlled by NZ and Australia.

Interisland Ferry Resilience and Redundancy

NZ needs reliable and resilient interisland shipping options, that are flexible enough to move people, freight, trucks and rail assets, and modern and reliable enough that the risk of irreparable breakdown is extremely low. There needs to be capacity and redundancy in the system.

There are concerns that any Cook Strait ferry solution will not be rail capable. Ideally interisland ferry solutions would accommodate future emphasis on electric rail. If the North and South islands are disconnected, NZ risks a less resilient rail system (as rail assets or repair workshops may be stranded on one island or the other).

Rail, especially electric rail, may be particularly important in a global catastrophe if fuel and transport options are scarce, as it allows intensive near-urban agriculture to follow a railway, as we have argued in our research paper on near urban agriculture for resilience.

Coastal Shipping Assets and Infrastructure

At present it is more cost-effective to ship Australian wheat to processing in Auckland than bring wheat from the South Island, but we cannot assume that trans-Tasman transport will be operational following a global catastrophe. Reliable and sufficient NZ bulk, liquid, and container coastal shipping assets are strategically important.

NZ needs an expanded, capable, flexible and reliable coastal shipping fleet, and associated port infrastructure, perhaps including roll-on, roll-off capability for trucks and rail at a range of ports. This would provide transport resilience, reduced emissions and fuel efficiencies. Yet there are doubts about NZ's coastal shipping capability and capacity and a lot of 'coastal' transport in NZ depends on vessels plying global routes.

Liquid Fuel Supply for Shipping

Shipping is more fuel efficient than road transport in most cases and can be markedly so when a full load of containers is transported. However, shipping still requires a significant amount of liquid fuel.

We've previously calculated that as little as 5–15 million litres of locally produced biofuel could power agricultural equipment sufficient to produce food for the entire NZ population (if efficient crops such as wheat are grown near processing and consumption sites – with many more litres needed for producing food such as dairy products).

In contrast the annual fuel consumption of a single ship to distribute food is in the order of 10 million litres. Such a ship (eg, like the MV Moana Chief) can ply coastal routes and is trans-Tasman capable. Some ships can run on 100% biodiesel (B100), but regulatory changes and certifications would be needed to permit this. We estimate that local production would require at least 8,000 hectares of canola crop or some other biofuel feedstock for every 10 million litres of biodiesel. Such considerations need to be part of a comprehensive mixed transport resilience plan and essential quantities compiled in an improved National Fuel Plan.

These liquid fuel volumes need to be put in the context of the amount of biodiesel that previously operating refineries could produce. One refinery in NZ is capable of producing in the order of 10–20 million litres of biodiesel per annum, however it has now switched to producing food oil.

We commend a new agreement for a biofuel refinery at Marsden Point, but from a diversification and resilience perspective NZ needs to produce a wide range of fuels (for aviation, shipping, agricultural machinery etc) and the problem of interisland transportation of this fuel remains. Biofuel refineries would ideally be in both North and South islands, at least until more widespread electrification of agriculture and road transport occurs.  

One concrete possibility is to begin by pursuing the potentially low hanging fruit of marine fuel. Canola feedstock in Canterbury with the potential for wheat rotation crops (to expand production), could supply the Rolleston PureOil NZ refinery which could produce marine fuel with linkage to Lyttleton for a single NZ marine bunker. Multiple refining and bunker nodes would be ideal, and additional opportunities should be sought.

Infrastructure Commission Proposals

The NZ Infrastructure Commission is calling for submissions to its Infrastructure Priorities Programme (first round due 20 December 2024). Submissions can include 'Stage 1' proposals that detail major problems (of national significance) that NZ faces. We contest that resilient coastal and interisland shipping is one such priority issue and we encourage people to submit proposals for infrastructure that will enhance the resilience of NZ's interisland and coastal shipping in the face of potential global catastrophe. Solutions might include interisland or coastal vessels, landside infrastructure, trans-Tasman trade options, and solutions for a resilient shipping fuel supply.

The country cannot assume that help, expertise and components from overseas will be easily available when needed after a global catastrophe. Distribution of food, fuel, and medicines depends on a resilient local transport system. Indeed, all industrial systems are interdependent and without reliable shipping every sector would break down in a multi-island nation. There is potential for widespread societal harms in a catastrophe that accrue well beyond the accounting in shipping industry risk processes. The right resilience incentives are lacking and this means there may be a case for government ownership of some strategically critical shipping assets.

Finally, the suggestions above would likely help provide a range of immediate benefits to the country. These include reducing greenhouse gas emissions, increase transport security, and providing resilience to a wider class of natural hazards such as extreme weather or earthquakes.

Further recent media about NZ shipping problems and solutions

[1] https://www.rnz.co.nz/news/national/502312/timeline-the-troubled-cook-strait-ferries

[2] https://www.rnz.co.nz/news/national/528514/timeline-a-recent-history-of-cook-strait-ferry-woes

[3] https://www.1news.co.nz/2024/06/22/grounded-interislander-ferrys-25-years-of-troubled-history/

[4] https://nzhistory.govt.nz/culture/cook-strait-rail-ferries/strikes-and-strandings

[5] https://en.wikipedia.org/wiki/Interislander

[6] https://www.interislander.co.nz/explore/the-history-of-the-interislander-ferry

[7] https://www.thepost.co.nz/nz-news/350319712/troubled-waters-brief-history-interislander-issues

[8] https://www.treasury.govt.nz/sites/default/files/2024-05/project-irex-4914527.pdf

[9] https://www.rnz.co.nz/news/national/511300/more-frequent-checks-for-kiwirail-s-ageing-ferry-fleet

[10] https://www.munz.org.nz/2024/09/20/connemara-failure-highlights-urgent-need-to-address-ferry-fiasco/

[11] https://www.rnz.co.nz/news/national/528525/bluebridge-ferry-maritime-union-sounds-alarm-about-health-and-safety

NZ needs to audit shipping capabilities through a global catastrophe lens (Image credit: Midjourney)