David Porter: Tauranga a sensible solution to port problem

Port of Tauranga.

Auckland's Port Future Study Group will soon release the final report from an Ernst & Young-led consulting consortium on its 50-year plus plan. The final recommendations will be closely watched throughout the freight logistics industry.

In April, the study group announced its preliminary short list of options: constraining Ports of Auckland to its existing footprint; enabling its growth in its current location, or moving it to a new location, including possibly Manukau Harbour, the Firth of Thames, or Muriwai.

Independent chair of the study's Consensus Working Group and Reference Group, Dr Rick Boven acknowledged the three shortlisted options all had complex challenges.

Of course, there is a simpler and less complex solution - to shift the majority of Auckland's port activity to Port of Tauranga. That would free up Auckland's valuable waterfront real estate for more strategically useful development.

And it would allow Tauranga's port to continue expanding volumes because of its increasingly efficient operations. Despite Auckland's growth predictions, according to Ministry of Transport data available for the most recent three quarters, Ports of Auckland container volumes have gone down by 8 per cent, while the Tauranga port's volumes have gone up by 9 per cent.

Ports of Auckland has traditionally been focused around imports of fast moving consumer goods (FMCG), while Tauranga has dominated exports, in particular in dairy.

The game changer has been the recent completion by Coda Group, the freight logistics joint venture formed last year by the port and Kotahi, of the rail link into its Auckland intermodal freight hub in Otahuhu. The Coda hub consolidates export, import and domestic cargo flows into a single location. The new line connects to the Tauranga port's Metroport rail link in Onehunga.

Coda operations have already been slashing the number of empty containers and trucks between Auckland and Palmerston North, for example, while routing more export volumes through Tauranga. Ports that have lost dairy include Taranaki and Napier. Dairy export volumes across Tauranga's wharves rose 12.6 per cent to 1.75 million tonnes in the 2015 financial year.

The new rail link adds the final component. Port of Tauranga chief executive Mark Cairns notes that the Coda links have taken a lot of inefficiencies out of the New Zealand supply chain.

"We're using intermodal containers that can go on trucks or trains and they have FMCG going south and dairy going north. Those trains and the containers are now full in both directions, where previously they weren't."

Auckland's best option seems obvious. Giving up potential business growth is, of course, unlikely to be palatable to Ports of Auckland. But it's something the port's local government owners should seriously take on board.