Kotahi Logistics, a joint venture established by Fonterra and Silver Fern Farms, was created to address the need for a sustainable and more efficient supply chain. Hear from Kotahi’s CEO, David Ross, discuss why international containerised shipping is an emissions efficient method of distribution and what can be done to reduce shipping emissions even further. 

Watch the full interview with David or read key Q&As from the interview below:

Q&A with David Ross - CEO of Kotahi Logistics

Q: Who and what is Kotahi Logistics?

Kotahi Logistics is New Zealand's largest containerised freight manager and is a joint venture partnership between Fonterra and Silver Fern Farms. It was formed in 2011 after the problems we had with supply chain post the Global Financial Crisis and it had a mandate right from the start to build a more stable and resilient supply chain. Kotahi plays a really significant role in moving New Zealand's export products to the world.

Q: What plans are in place to reduce shipping emissions even further?

Kotahi is committed to playing its part in reducing New Zealand's carbon emissions. So already some of the work we've done in bringing bigger and more efficient ships to New Zealand has helped Fonterra reduce its shipping-related emissions by 16% between 2015 and 2023*.

Further gains on the current fuel systems are now fairly limited. However, fortunately, technology is really moving forward at pace and so we're starting to see the commercialisation of some alternate fuel systems with lower carbon footprints. Several carriers are planning to roll out a significant number of new dual fuel vessels over the next few years and enable the scale up of production of these green fuels to power those vessels. So things are really moving forward in that sense.

Q: Should customers be concerned about international shipping from New Zealand?

Containerised shipping is a really efficient way of moving product around. It's got a much lower per tonne-kilometre footprint than trucking and air**. So when we look at the total emissions profile associated with dairy, then Fonterra's distribution-related emissions account for around 1% of the total profile***. 

Q: How has Kotahi responded to supply chain challenges they’ve faced recently?

Global supply chain challenges that we’ve faced into recently, whether they're pandemics, geopolitical or climatic events are really becoming the norm. By committing to a scale, long-term partnership with Maersk, we've been able to provide customers with sustainable, reliable shipping, even through these difficult periods.

During the peak of the COVID disruption, Maersk were the standout carrier in bringing additional capacity and containers to the market, enabling Kotahi to deliver for its customers and for Fonterra to have a record shipment year.

Q: What does the future look like for shipping?

Kotahi is committed to working with its partners to bring green fuel solutions to New Zealand trade lanes. But it's not that straightforward. There is a premium at the moment associated with green fuels, so it's not happening as fast as some other sectors. 

What we'll be watching with interest is the development of emissions tariffs and what the International Maritime Organisation (IMO) will be doing in terms of potentially implementing a global standard. And that's going to be quite important because it's going to level the playing field a little bit in terms of the cost of current fuels and future fuel systems. I think that might change the tipping point for the acceleration of the use of green fuels in shipping. 

Until we get to this tipping point, customer demand and willingness to meet the fuel premium is going to drive the speed of transition. So that's where Kotahi is in an ideal position with the scale, with the large customer base we have in New Zealand and our partnerships to be able to bring green fuel shipping solutions to New Zealand export trades when the time is right.

*Data for Fonterra’s emissions reporting of ocean freight is based on the Global Logistics Emissions Council (GLEC) Framework, using the globally accepted and endorsed Clean Cargo Working Groups (CCWG) methodology.  
**Comparison is between road transportation such trucking, and air freight. Source: Second and Third International Maritime Organisation Greenhouse Gas Study (2009/2014).
***Fonterra's distribution-related emissions account for 1% of Fonterra’s total emissions profile.