Auckland Council-owned Ports of Auckland is the country's main imports gateway. Photo / Michael Craig
For the sake of the economy, get Auckland’s port properly functioning before pursuing political ideologies - that’s the message from some big users of the country’s main imports gateway as the year closes on fiery debate about its location.
Fuelled by new Auckland Mayor Wayne Brown who campaigned on returning waterfront land to Aucklanders and a better return for ratepayers from the council-owned port, relocating cargo operations is a low priority for some stakeholders grappling with costly supply chain congestion in the upper North Island.
For listed global logistics and transport operator Mainfreight, the debate is “becoming boring”, says group managing director Don Braid.
“It is full of posturing and never-ending debate.
“There have been so many studies and plans. Not one of them has been adopted, or for that matter, has been good enough to be implemented,” said Braid, whose Auckland-headquartered company posted revenue of $5.2 billion in the 2022 financial year.
“The New Zealand supply chains continue to be congested,” he added.
“Mainfreight’s focus is to help customers move their freight as efficiently as possible. To have POAL (Ports of Auckland) operating efficiently and reducing pressure on the Port of Tauranga and the rail connection between Tauranga and Auckland would be welcomed.
Until that was sorted, common sense and logical decisions around the future of ports in New Zealand had to prevail, he said.
“Ideology from politicians might not be the answer for efficient supply chains.”
There have been at least 25 official studies and reports involving the Auckland port, including a Government-commissioned study headed by Brown.
It concluded in 2019 the port’s CBD freight operation was no longer economically or environmentally viable, and should be moved to Northport near Whangārei.
Another Government-commissioned report followed, recommending other locations. Meanwhile, the Government is due to publish a national supply chain strategy next year.
New Zealand’s freight forwarders, who organise import and export movements for retail, commercial and industrial sector customers, say the “immediate focus” should be on getting Auckland’s container operations fully functioning again after pandemic-driven delays and congestion.
The port’s productivity issues have seen listed Port of Tauranga, the country’s main export port, shoulder Auckland shipping diversions and skipped calls, inflaming supply chain congestion as goods have to be railed to Auckland.
Customs Brokers and Freight Forwarders Federation (CBAFF) president Rachel Madden said the Auckland port needed to focus on its promise to bring back scheduled berthing windows in March.
“This is incredibly important for the whole supply chain in New Zealand. Anything that distracts from this focus ... should be avoided until after this.
“There were a number of supply chain challenges and bottlenecks in New Zealand that were not addressed in the current supply chain government paper, such as rail issues, road bottlenecks, container depot problems,” said Madden.
“This should be a focus by (Auckland) council and our transport ministry. Reducing bottlenecks and issues within the supply chain will reduce both costs and carbon emissions for NZ Inc.”
Madden said New Zealand faced “real” supply chain issues Auckland Council and the current Government should understand.
“A change such as moving the Auckland port will have wide-reaching issues throughout the whole of New Zealand, and there is a massive investment piece required. Not getting this right and in line with any move will be disastrous for New Zealand.”
CBAFF believed an independent body, outside central government, driving supply chain change would provide a better future for the country.
Container shipping giant Maersk said for its operations, it was vital a port serving Auckland was structured to connect ocean routes and the port with inland road and rail connections to the city’s consumers.
My Therese Blank, head of Maersk’s Oceania Export Market, said no alternative port was available today, and “extensive” planning and infrastructure investment was required.
“We would also strongly support the port expansion at Port of Tauranga to future proof the upper North Island supply chain.
“If the move (of Auckland operations) were to go ahead, then in order to efficiently relocate the port in the next 18 years, the planning of the new site and the interconnectivity needs to start soonest.”
Asked if the port’s cargo operations could be relocated and still successfully serve Auckland, Blank said yes, “with adequate planning and development in infrastructure, both at the port and landside connections”.
“Maersk is currently using Port of Tauranga as entry point for a portion of our cargo with final destination Auckland and we connect cargo via rail from Tauranga to Auckland Metroport in south Auckland.”
For the road transport sector, Auckland port was “a massive and important piece” of the national infrastructure, said Transporting NZ chief executive Nick Leggett.
“Those working in and out of the port every day are more aware than most how complex the location of port services will be to unwind and shift,” he said.
Even one aspect of its services could take years to shift elsewhere.
“The industry is getting on with the job of Christmas and looking forward to operational and supply chain challenges in the local environment in 2023 and beyond.
“Relocation of the port, while worth consideration, isn’t occupying minds much at the moment.
“The question that must be asked before considering relocation is, what does a port do for an economy, how close does it need to be to populations to drive economic performance and ensure emissions can be reduced?
“Secondly, what does Auckland get out of the port’s current location and what is the opportunity cost of the land it sits on?” Leggett added.
“Only once Auckland understands what it gets from the status quo and whether there is a greater benefit from an alternative use, should relocation be considered.”
A recent Massey University analysis of the supply chain outlook identified main areas of risk.
They included high inventory levels, anticipated structural changes in supply chains, staffing, and freight issues.
But above all, the main risks were inflation and overall financial weaknesses in global markets, said the report by Massey University’s Supply Chain Risk Analytics Network (Scran).
Inventory levels had gone up to mitigate the typical disruptions experienced over the past two years.
“Now however, demand is low and warehouses are full,” the Scran report added.
“This contributes to a range of inventory-related costs, including alternative storage needs when warehouses fill up, increased working capital and reduced cashflow.”
The change may add $25m annually to costs during a cost-of-living crisis.