A new alarm has sounded in New Zealand's congested supply chain - the country's biggest port at Tauranga risks running out of capacity if it doesn't get the green light very soon for a long-mooted container berth extension.
The extension, planned since 2018 and considered by export and import leaders to be "critical" in New Zealand's infrastructure as freight volumes balloon, is now awaiting a resource consent hearing date in the Environment Court, after being declined for the Government's shovel-ready and Covid fast track infrastructure project programmes in 2020 and 2021 respectively.
The project has lost a year through these unsuccessful processes, and now chief executive Leonard Sampson said the port is "running very tight in terms of capacity matching volume demand".
It was likely to run out of capacity in 2024-2025 if current annual compound freight growth continues. The berth will take up to 2.5 years to build.
Leaders of some of the country's biggest earning export industries say they're concerned about the threat to the port's container handling capacity. They're urging the Government to urgently recognise the delay issue. The NZX-listed port handles 42 per cent of New Zealand's container traffic.
On the drawing board since the Sulphur Point container terminal was developed in the early 90s, the 220m extension would allow more big ships to berth and provide capacity for an extra 800,000 to 1 million containers to be handled - or as Sampson puts it, a decade-plus of growth headroom.
In 2018 when Port of Tauranga called in Netherlands-based global container terminal experts TBA to analyse its capacity, the port was handling just over 1 million containers a year, said Sampson. It's now handling 1.25m.
"They identified in terms of the current footprint that without the additional berth we had capacity for around 1.5 million TEU (twenty foot equivalent) containers.
"Compound annual growth over the past five years has been 7.4 per cent ... delay in getting consent means we are running very tight in terms of capacity in matching volume demand," said Sampson.
"If we continue growth of 7 per cent we will run out of capacity in around three years."
"We have a construction 2 to 2.5-year timeframe so we have a very short period of time before it starts causing challenges."
The port's resource consent application is for a total of 380m of berth development at Sulphur Point and the Mount Maunganui wharves opposite. But the priority job is a first stage 220m extension to the existing terminal wharf at Sulphur Point. The $68m build would create 368 jobs during construction and 81 permanent jobs on completion.
Sampson said there are no plans currently to develop the Mount Maunganui side, but the port needs to be ready to develop other berths according to cargo demand.
"Most people don't seem to realise we are just talking about a berth (at Sulphur Point) on an existing (structure) which is already being used for the port. There's a big rock wall there at the moment, part of the sea wall reclaimed when Sulphur Point was built. Some dredging is required but only a small amount. Most of the dredging is already consented."
Transport Minister Michael Wood and Infrastructure NZ have yet to respond to Herald inquiries.
Meanwhile, major port users are concerned about the delay in a start on the berth, which when added to the existing 770m container wharf, would make the quay about 1000m long, improving tie up space for current sized big container vessels but also providing for future ship size growth.
Zespri chairman Bruce Cameron told the Herald the capability of New Zealand's biggest port is essential for Zespri's growth plans. Its revenue last year nudged $4 billion.
"Our growth strategy is very dependent on infrastructure. Eighty per cent of New Zealand kiwifruit is grown within a two-hour drive of the port.
"Last year we chartered something like 66 ships. This coming season we're looking to charter about 76. On top of that we have the need for 17,000 refrigerated containers.
"(In 2021) we exported 620,000 tonnes of fruit, just under 180 million trays. As our volumes increase congestion is becoming an increasing concern for us."
Kotahi, the country's biggest supply chain collaboration, uses Port of Tauranga for 99-plus per cent of exports it handles, said chief executive David Ross.
"The last 12 months really highlighted the need for greater resilience in the New Zealand supply chain so the additional berth is the best way to get more near-term capacity and therefore the ability to handle supply chain disruption and schedule slippage.
"In 2021 the upper North Island supply chain was at full strength and beyond for Port of Tauranga and the port of Auckland."
Extra congestion charges for exporters and importers ran into "millions" of dollars.
"If you look at what expected cargo volume is for us and what we face in the future ... it's a pretty scary prospect if we collectively can't get this moving. We are quite worried.
"Having that extra berth capacity starts to open up the opportunity for better coastal feedering. At the moment that's a bit constrained. We see lots of upside in terms of overall network effectiveness from the fourth terminal.
"For coastal feeders - or vessels playing that role - it's hard to make those things work well (without the hub port extension)."
Fonterra is New Zealand's biggest business. Last year, out of the total 200,000 containers of dairy product it exported, 120,000 went through Tauranga, said chief operating officer Fraser Whineray.
"Long term planning and execution for infrastructure is very important and ports are very important for the two-way flow for people and industry - not just exports. There are many benefits to making sure we remain attractive and consistent (to shipping) with the way global shipping is developing.
"We need to make sure work is done in advance of when it's required."
Japanese paper and packaging giant Oji exports 50,000 TEU a year through Tauranga, through its freight and logistics division Lodestar.
New Zealand general manager Murray Horne said efficiencies at Tauranga ensure "NZ Inc can function efficiently".
"New Zealand is only growing so we need port systems and supply chains to grow with us as exports and global markets grow. Without the capacity to put the extra berth in and so increase the turnover of vessels...we are going to be constrained."
Like other sector leaders, Horne believed the Government should be getting in behind the extension "as one of the levers to help growth".
"They talk quite a lot about coastal shipping and trying to help there but without the port having more capacity, coastal shipping becomes quite difficult because they are the logical port for coastal shipping to hub across."
The New Zealand Cargo Owners Council represents the country's major exporters and importers and has transport and logistics affiliate members.
Chair Simon Beale said Government support is needed to get this "critical infrastructure processed quicker".
"We need action now. Every day of delay puts pressure on everyone, including the port."
The council had raised the berth extension in discussions last year with minister Wood, the Ministry of Transport and Infrastructure NZ.
There had been "some good engagement" by these agencies but the council wanted cargo owners to be consulted more fully than they had been so far in the Government's yet-to-be-released wider supply chain and freight logistics plan.