Wellington, June 5 NZPA - About 30 percent of the containers leaving or coming into a New Zealand port are empty, which is costing the country dearly.

The cost of "moving air" was one of a number of peculiarities of the New Zealand supply chain Ports of Auckland managing director Jens Madsen identified in a speech to a Transport New Zealand Summit this week.

His conclusion was that New Zealand needed to look at the whole supply chain when planning infrastructure policy. To increase productivity New Zealand had to create a more efficient supply chain.

He began by explaining the role of containers in the movement of freight, the increasing size of those containers, and the increasing size of ships carrying them.

The simple concept of a metal box to move freight in has been a catalyst for phenomenal change.

The first container ship called in New Zealand in 1971, just 38 years ago.

Between 2004 and 2008 the average growth of container volumes nationwide was nearly triple that of national average gross domestic product.

As recently as the mid 1990s the majority of New Zealand's refrigerated cargo went in refrigerated bulk carriers. Now it goes in refrigerated containers, known as reefers.

Manufacturers are now stopping producing 20 foot containers in favour of 40 foot "hi cube" containers.

Logs are now being transported in containers and by the middle of this century bulk log exports could be nonexistent.

New Zealand has 11 ports which handle containers where as Australia has five major container ports.

There is also an imbalance between imports and exports at most New Zealand ports.

"This leads to a high number of empty containers needing to be redistributed around New Zealand to be filled up with export goods."

Mr Madsen predicts that a hierarchy will evolve naturally in New Zealand ports.

Larger container ships will call at fewer ports, forcing a rationalisation of the port sector.

"The move to a smaller number of international seaports does not mean that other ports will wither and die," he said.

There was a vast under utilisation of both rail transport and coastal shipping in New Zealand.

A reliance on road meant the supply chain was exposed to congestion.

In the United Sates, when West Coast ports geared up to handle larger container vessels the supporting off-port infrastructure was not changed and a major gridlock developed.

"There is a real risk this could happen with larger and larger vessels calling in New Zealand," Mr Madsen said.

More and more countries were adopting a multi-modal, whole of supply chain approach to their infrastructure planning. he said.

"If we do not, there is a risk that New Zealand will slip further behind, depriving our economy of billions of dollars per annum," he said.