Tauranga could be a more economical logistics hub than Auckland for new companies importing and distributing furniture, electronics and apparel, a report says.
The Middlebank Consulting Group report said organisations looking to establish a distribution network in New Zealand should "seriously consider" Tauranga as a base.
It assessed logistics costsfor four imported commodity types: furniture, electronics, apparel and vehicles.
The countries of origin modelled and evaluated were all from Asia.
"Although arguably there would be relatively similar findings for other origins apart from potentially Australia," the report's executive summary said.
It said there was an argument for Tauranga to be a logistics hub for furniture, electronics and apparel.
That is if there is to be a single national distribution centre, or one North Island and one South Island distribution centre.
The 43-page document, prepared for Western Bay economic development agency Priority One, found it was not as clear-cut when it came to vehicles, however.
It said there was a benefit in using a combination of both Auckland and Tauranga for vehicle distribution within the North Island – servicing the Upper North Island out of Auckland and the Central and Lower North Island out of Tauranga.
The report said business scale would impact the significance of the cost/value benefit between operating a distribution network from Tauranga compared to Auckland.
"While the difference is unlikely to warrant an existing Auckland-based company to relocate (when business risk and cost of relocation are factored), Tauranga should be more comprehensively evaluated by any potential new entrant to New Zealand particularly where the product is sourced from Asia and distributed throughout the country."
The Bay of Plenty Times Weekend approached the Ports of Auckland for comment about the report.
Its head of communications said there was not enough time before the deadline to read the report and comment.
Port of Tauranga chief executive Mark Cairns said: "The report confirms what importers and exporters in our region have known for a long time. Port of Tauranga's cargo handling expertise, rail and road transport connections and international shipping options give companies a competitive edge."
Port of Tauranga chief executive Mark Cairns. Photo / File
The Middlebank report concluded Tauranga was a more economical solution than Auckland for distributing furniture directly to stores for scenarios where goods were sourced from sea "by 4.7 per cent to 4.8 per cent".
In the electronics analysis, it found the cost savings for using Tauranga ranged from 4.7 per cent (China – Xingang) to 5.1 per cent (Singapore).
And for apparel, the Tauranga savings ranged from 4.5 per cent (Bangladesh – Chittagong) to 5.8 per cent (Vietnam – Ho Chi Minh city).
For all three commodity types, the primary reasons given were: lower cross-docking and warehouse costs as well as lower road freight rates due to Tauranga's geographical location.
Meanwhile, the report's vehicle analysis concluded that, should all vehicles imported from North Asia be distributed either from Auckland or Tauranga, Auckland would be the more cost-competitive option by 1.18 per cent.
"However, an equilibrium between Auckland and Tauranga should not be bypassed for the vehicle industry and its distribution network in the North Island as it results in a more cost-optimised distribution network."
The report said as sea freight costs were similar from North Asia to Auckland and Tauranga, cost optimisation could be achieved by focusing on domestic storage and road freight costs.
"Storage costs over total distribution costs are proportionally lower than road freight costs. A hybrid distribution network with both Auckland and Tauranga servicing local demand areas based on the lowest freight costs options should be taken into account."
However, the report said that would only be the case if a company were utilising shipping lines that ship vehicles directly to Tauranga, which not all do.
