As you are aware, in 2017 Napier Port introduced an insurance levy to recoup a portion of sudden increases in premiums which occurred as a result of the Kaikoura earthquake. Unfortunately, port insurance costs have continued to rise year on year resulting in a 171% increase over a three-year period. This year has seen a 25% increase to insurance compared with the previous year.
While insurance is factored into our business costs, an increase of this magnitude highlights how insurance is an uncontrollable business factor closely related to the seismic activity of our country. Napier Port are unable to absorb the full impact of the increasing costs and thus must continue to charge an insurance levy.
Given the variable nature of insurance we have redesigned the insurance levy to be an Insurance Adjustment Factor (IAF) which will be adjusted accordingly when we see a substantial increase or decrease to Napier Port insurance costs. These changes will be visible on the Napier Port website from 1 February 2020.
We have recently taken some time to review the structure and application of the IAF. This review has determined that Napier Port cannot absorb the full 25% increase incurred this year, and thus must increase the IAF by 13%.
From 1 February 2020 the new rates for the IAF will be as follows:
- $5.93 + GST per TEU
- $0.53 + GST per revenue tonne/kilolitre/JAS/M3
If you have any queries regarding this adjustment please contact our Commercial team via email: Commercialdepartment@napierport.co.nz or directly:
David Kriel – General Manager Commercial 027 241 8295
Andrew Palairet – Business Development Manager 021 859 663
Dominic Sutherland – Business Development Manager 021 026 82324
We appreciate your support, and look forward to continuing to deliver for your business.