The Ports of Auckland's inability to expand could push up the price of new and used cars and non-containerised freight expenses, while cruise ships could bypass Auckland, according to those with vested interests.
The port, which last week announced it would not appeal the decision against expansion, presented evidence in the Urban Auckland case showing Auckland could lose $12 million-plus from one big cruise ship shunning it, the port's value could fall by $86 million if multi-cargo handling was reduced and US25,600/day can be lost if a ship can't berth.
David Vinsen, chief executive of the Imported Motor Vehicle Industry Association - whose members include shipping companies, the ports, trucking companies, inspection and processing companies, the importers and exporters overseas, wholesalers and retailers - said about 12,000 new and used vehicles arrived in Auckland monthly.
But lack of expansion opportunity could drive that business to Whangarei or Tauranga.
"Aucklanders and all New Zealanders will pay more for their new and used vehicles, probably hundreds of dollars. With the port unable to expand, it will mean additional costs to transport cars from another port to Auckland, double-handling, increased risk of vehicle damage and increasing costs of extra transport. An additional 3000 heavy vehicles a month could be running for Tauranga or Whangarei to Auckland, transporting imported vehicles.
"When people see things sitting on a wharf, they think of it as a waste of space, whereas they should see it as working port. I was disappointed in the decision because I know that it's going to mean disruption and cost for the industry initially and the consumer eventually. The port is the very reason Auckland was founded where it is," Vinsen said.
Kevin O'Sullivan, Cruise New Zealand chairman, said an estimate showed one big cruise ship shunning Auckland could result in the city losing about $12 million for each port call and $40 million being lost to the New Zealand economy.
As a long-term solution, something needs to happen because if Auckland can't berth one of these ships, it means the rest of New Zealand suffers because the ships won't come here.
"It's far from ideal if the port can't expand. It's certainly not a good look for a major port like Auckland to have difficulty with berthing facilities," he said.
Knock-on effects would involve losses to retailers, particularly in the CBD, and tourism businesses, O'Sullivan said.
"As a long-term solution, something needs to happen because if Auckland can't berth one of these ships, it means the rest of New Zealand suffers because the ships won't come here. Auckland is a destination of choice," he said.
The 348m German-built Ovation of the Seas will be the largest cruise ship to visit New Zealand, scheduled to arrive in December and might have to moor in the middle of the harbour. Aboard will be an estimated 6500 crew and passengers.
One industry insider said that would make Auckland look like a third world city.
"The crew won't be able to come ashore because they'll all be working keeping the engines running to stop the ship drifting. Many of the passengers might not come ashore either. It's inconvenient for them as there's another transfer to get to land, so many will just stay aboard."
Given the growth in ship size and projections for vehicle imports, as well as other breakbulk commodities growing, the multi-cargo wharves will become progressively more constrained over next five to ten years.
The Property Council deems port expansion necessary for the city's growth, saying it "supports the concentration of POAL activities in the eastern port, thus enabling space to the west to be utilised for other activities. This concentration must continue in order to concentrate activities from Bledisloe Wharf to the Ferguson container terminal. Future reclamation and expansion, and the consequential redevelopment of Captain Cook Wharf and public use will likely require both the use of POAL's working capital as well as significant public money. Aucklanders need to know the cost of these spending decisions, as well as a suite of options for funding this transformation project."
The port's court submission cited Shipping New Zealand chairman Captain John Robinson outlining the need for bigger wharves in response to a trend for bigger ships. Vessels also required room for a ramp and safe turning circle to safely unload cargo.
"The effect of these capacity constraints...is that during the 2013-14 cruise season, 21 per cent of the car carriers and roll-on roll-off vessels suffered delays to their normal operation. In the 2014-15 cruise season, this number increased to 41 per cent," the submission said.
A 24-hour delay could costs shipping owners or charterers at least US$25,600/day in lost revenue earnings, Robinson said. Continued delays will over time incentivise the shipping lines to seek alternative destinations.
An NZIER report spelt out the consequences of expansion constraints: "The port has inherited a legacy wharf design that limits its ability to operate multi-cargo operations efficiently. Given the growth in ship size and projections for vehicle imports, as well as other breakbulk commodities growing, the multi-cargo wharves will become progressively more constrained over next five to ten years."
Ports of Auckland
• NZ's largest container port
• Handles 968,741 20-foot equivalent container units annually
• Handles 5.6 million tonnes of non-containerised cargo annually
• Handles more than 207,000 cars annually
• Gets about 100 cruise ship visits annually
• Expansion ban to constrain freight, cars, cruise ships
• NZIER report says problems will grow in 5-10 years
[Sources: Ports of Auckland, NZIER]
Read: Statement of evidence for Ports of Auckland