There could not be a more appropriate venue than the Museum of Wellington and the Sea to launch this final domestic sea freight strategy, and I’m really pleased to see so many people here to support the occasion.

At the launch of the Sea Change Strategy at the Museum of Wellington and the Sea were NZ Shipping Federation executive Director Sam Buckle, Transport Minister Annette King and NZ Merchant Service Guild General Secretary Helen McAra

If I can be excused for being just a little nautical for a moment, I have felt privileged to be a member of the crew aboard the good ship Sea Change, and it’s quite a voyage that all of us --- the Government, industry, employees, local government, ports and the regions --- have made together.

I want to acknowledge my Parliamentary colleagues, the Honourable Harry Duynhoven and Peter Brown, for their part in steering Sea Change.

I also want to acknowledge the Maritime Sector Reference Group and all the representatives of the sea freight industry who are here, and I’m pleased the reference group will continue providing the Ministry of Transport with feedback across all areas of the sea freight industry.

When I became the Minister of Transport, it quickly became clear to me that coastal shipping was badly under-utilised as a link to other modes of transport, particularly road and rail.

I was reinforced in this belief by the New Zealand Shipping Federation’s document, Roadways to Waterways, and, as I have said before, the federation’s enthusiasm was contagious.

I am now more than ever confident that, working together, we can enhance sea freight’s role in managing New Zealand’s domestic freight growth. We need to do so. In the next 30 years freight movement around New Zealand will more than double. That fact alone compels us to reform and revitalise domestic sea freight.

As you can see from the images on the screen behind me, there’s nothing new about coastal shipping. But we have long been under-utilising the role sea transport can play in realising our island nation potential. Now that we face the 21^st century imperatives of climate change and sustainability, the arguments for greater use of sea freight are becoming stronger and stronger.

While there are, of course, environmental impacts from shipping, greater use of sea freight can significantly help in meeting the Government’s target of halving greenhouse gas emissions from domestic transport by 2040. In fact, we can reduce transport greenhouse gas emissions by seven percent by 2040 --- compared to the level they would otherwise have reached --- by doubling coastal shipping’s current share of inter-regional freight.

As well as promoting a healthy environment, we also need to build resilience against increasing energy costs, and sea transport is relatively energy efficient, compared to other modes. We must also ensure that we have affordable infrastructure to remain competitive.

Trends in global shipping also have to be taken into account, notably larger ships visiting fewer ports. We will need to establish ‘hub and spoke’ networks -– with domestic feeder services (the spokes) to and from the hub or gateway ports.

For all these reasons, we will continue to work to increase shipping’s share of freight movement. Our target for 2040 is to double the current 15 percent share of the total freight load to 30 per cent, because, as I said, coastal shipping is a viable, cost-effective and energy efficient alternative for moving freight around the country.

I’m really pleased to be able to tell you today that $36 million is earmarked for coastal shipping over the next four years. Land Transport New Zealand has $6 million available for domestic sea freight for 2008/2009, and then, under the first Government Policy Statement or GPS, I plan to allocate a further $10 million for sea freight development for each of the following three years up to 2012.

LTNZ is finalising details, and then the New Zealand Transport Agency, up and running from 1 July, will invite proposals for access to funds twice yearly from public and private parties in the sector. The new agency, combining LTNZ and Transit New Zealand, will be charged with implementing the soon-to-be released GPS, which sets out how funding can best be used to achieve targets set out in the forthcoming update of the New Zealand Transport Strategy. The domestic sea freight strategy is aligned with the update.

I’m also pleased that LTNZ has been working with the Ministry of Transport to reduce barriers to accessing the funding. The sector should find it easier in the future to source available funding. I’m aware of the frustrations and the impediments which have made it “too hard” in the past.

Last November I launched the draft Sea Change strategy, and now we have Sea Change, the final strategy, updated and amended in the light of consultation since November.

I was gratified to receive so many thoughtful responses to the draft strategy. The submissions came from a wide range of people and organisations with a common concern to improve domestic sea freight services to help achieve economic and environmental goals. They confirmed the direction of the strategy and the wealth of detail they contributed will be used for ongoing reference as the action plans are further developed.

Targets were emphasised in the submissions, and also the interactive nature of freight management – that is, intermodality to achieve supply chain needs. Issues were raised around access to funding, and ports and their related services. The Port Companies Act is now 20 years old and it’s high time we revisited this to ensure it reflects the needs of today’s environment.

You’ll also see in this final strategy an action plan, and I’m pleased to report that a number of work streams are already well underway.

A focal point for much of this activity is the Seafreight Development Unit that has already been established in the Ministry. It will act as an interface between government and the sea freight industry. The unit will have a special role in ensuring necessary information is collected and made available. The unit’s role, location and funding will be reviewed well before the 2010 end date in the action plan.

Also included in the action plan is better information gathering about coastal shipping in New Zealand.  Submissions were very helpful about what information needs to be collected and how this should be managed. The first step in this new development is underway with a national freight study commissioned by the Ministry of Transport, the Ministry for Economic Development and LTNZ.

Workforce initiatives are another key to revitalising the industry, and, as submissions pointed out, these initiatives need to consider the full range of workforce roles, both at sea and on shore. I know that industry and employee organisations and government agencies are working together with the Ministry on this important area.

The importance of effective supply chains came through strongly in the submissions. The centrality of ports to supply chains drew diverse comment -– including issues of ownership and governance arrangements which are effective for a globally competitive transport network. We will give this further consideration as part of the Ministry’s policy programme.

We’ll also clarify section 198 of the Maritime Transport Act, which sets out the conditions for coastal cargo carried by international ships in transit between New Zealand ports. International ships currently carry about 15 percent of all our coastal cargo. The amendment will make it clear that a foreign ship may only carry coastal cargo if it does so in the normal course of an international journey to load exports or unload imports at New Zealand ports.  This will make the existing policy more explicit –- the policy itself won’t change.

Many of the submissions rightly pointed out that intermodality should be the way forward –- continually looking at alternatives and making intelligent use of our transport modes. Effective supply chains need integrated transport solutions, and the Government’s recent buy-back of rail will assist this integration of our transport networks.

For today, our focus is domestic sea freight, however, andin this context intermodality means integratingfreight movement by ship with delivery to and from ports, by rail and road, on the basis of “best fit” for a particular consignment. In an expanding freight market, we will support efforts of freight users to choose modes that are not only in their best commercial interest, but also in the best interests of New Zealand as a sustainable nation.

I like the way the cover of Sea Change hints at the fact that a ship can carry a truck, or a train for that matter, and I don’t think the reverse is possible yet. But let me assure you that Sea Change doesn’t mean the Government is unfairly supporting the domestic sea freight industry as a competitor to road or rail freight.

As I said, the target is for sea freight to carry at least 30 percent of inter-regional freight by 2040 (compared with the current 15 per cent). This means, in fact –- with total freight set to more than double in this period – that sea freight will be carrying almost four times the amount of freight, in terms of tonne-kilometres, as it does today.

But, as many of you said in your submissions, we need to look at an interim target to keep us on track. As a pathway to the 2040 target, we are looking to move 20 percent of inter-regional freight by sea by 2020, a doubling in the tonne-kilometres currently carried by sea.

Making a sea change will help realise the New Zealand Transport Strategy’s vision of “an affordable, integrated, safe, responsive and sustainable transport system”. Sea freight makes sense in this bigger picture, and will play a vital role in New Zealand’s wider goals of economic transformation and environmental sustainability.

I am delighted that there has been so much support for Sea Change, and I welcome your ongoing involvement as we all work together toward the targets. Thank you again for joining me at this very important occasion.