KiwiRail plans to increase its log capacity out of Wairarapa by about a third to cater for the increased harvest and reduce the number of trucks travelling into CentrePort in Wellington.
The company runs two trains on week days – typically of 15 wagons each – and twice as many at the weekend when there are fewer commuter services.
Alan Piper, the group’s sales and commercial general manager, says the firm has no plans for additional services. But he says the weekday trains currently have surplus capacity and just require extra wagons to increase their loads.
“We are planning to add 15 wagons to one of the daily trains in May, once more wagons become available,” he told BusinessDesk.
“That will increase the capacity by around 100,000 tonnes a year from the current 270,000 tonnes” and reduce truck movements over the Remutaka Range by about 6,000, he said.
Log exports are booming, with many ports working to increase capacity to handle trees planted in the 1990s. Logs and timber are the country’s third-largest export and brought in $5.3 billion in the 12 months through February, 12 percent more than a year earlier.
KiwiRail is also investing heavily to capture more of that harvest for its own business. It is converting about 100 container wagons annually to carry logs and is expecting to receive an additional 200 new log wagons by the end of the year.
New Zealand has about 1.7 million hectares of plantation forest, according to the Ministry for Primary Industries. The southern North Island – including Taranaki but excluding Central Hawke’s Bay – accounts for about 161,400 ha of that.
CentrePort handled 891,500 tonnes of logs in the six months through December, 36 percent more than a year earlier. Port Taranaki handled about 425,000 tonnes in the same period, a 24 percent increase. Napier Port handled a record 2.2 million tonnes in the 12 months through September, 35 percent more than the year before.
Wairarapa and Tararua is home to almost 70,000 ha of forest. KiwiRail delivers logs from the Waingawa hub south of Masterton. It was established in 2016 by CentrePort and local foresters.
A new venture active this month wants to find ways to use that facility more efficiently.
Forest Enterprises Growth, New Forests and Feilding-based FOMS have formed Log Distribution to better coordinate their shipments.
The trio, some of whom also have operations around Gisborne and Rangitikei, are collaborating around their common interests in Hawke’s Bay and Wairarapa.
Forest Enterprises chief executive Bert Hughes says recent changes mean all three firms are using Tauranga-based TPT to manage their export marketing and scheduling of their shipments.
While they are still competing for sales, their logs are going on the same ships so they can work collaboratively to gather consignments and get vessels loaded quicker.
Trees the partners source or harvest in Hawke’s Bay will continue to be shipped through Napier Port. Log Distribution’s early focus will be on ways to improve coordination of harvests, trucking and use of Waingawa.
“We expect to put 600,000 tonnes through Wellington” a year, he told BusinessDesk.
“Once we get that right, we can grow it out from there.”
Hughes is expecting a steady increase in the Wairarapa harvest during the next five years and CentrePort is expanding storage at Waingawa.
Burt he said reducing ‘choke-points’ in the logistics chain will be key to making better use of the region’s rail and port infrastructure and reducing truck movements on the Remutaka Range, he says.
Being “a bit more careful” about the grade of logs being cut may improve the use of space at Waingawa and increase stock turn, he said.
“Your need for extra storage is not as great, in effect, if you can move it down the chain faster.”
Last week, Hughes said about 8,000 tonnes of logs were being railed to CentrePort weekly – the equivalent of 40 log trucks a day.
Starting overnight services would be ideal, but while the supply of locomotives, log wagons and drivers remains tight, firms have to find other ways to maximise the use of the assets available.
“We’ve just got to be more organised.”