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Home / Business / Companies / Freight and logistics

Improvement in Auckland port books, but 'more work to do' on container service

By Andrea Fox
Herald business writer·NZ Herald·
27 Feb, 2022 09:42 PM4 mins to read

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Ports of Auckland focuses on improving safety record and lifting profitability. Photo / Brett Phibbs.

Ports of Auckland focuses on improving safety record and lifting profitability. Photo / Brett Phibbs.

Ports of Auckland has posted a mid-year group net profit after tax of $23.5 million on revenue plumped by improved cargo volumes to $131.6m.

The port will pay its owner, Auckland Council, an interim dividend of $2.1m.

The group net profit after tax was an increase of 72.8 per cent from the half-year ending December 2020, however the result included an $8.6m gain on investment properties. Excluding this gain, group net profit lifted by 9 per cent.

Revenue was up $17.4m on the previous corresponding half year. Costs increased by $15.7m, attributed to additional energy, depreciation and labour costs.

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Noting that it had worked through "one of the world's longest Covid-19 lockdowns" last year, the port company described the result as "reasonable". It said it had made progress on its core priorities, improving safety and lifting profitability, through the challenging six months to December 31.

Auckland's lockdown had delayed some of its work to implement the recommendations of a damning independent report from March last year into safety at the port, with 21 actions completed and the remaining 24 in progress.

All the report's recommendations were on track to be implemented by the end of June.

Volumes lifted across all cargo types.

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Container volume increased to 364,140 TEU (20-foot equivalent units) compared with 358,899 TEU in the same period last year.

Breakbulk volume including car imports was 3.9m tonnes compared to 3.1m tonnes, with car volumes of 129,924 against 104,224 in the corresponding period.

The Auckland lockdown last year slowed progress on the port's long-awaited container terminal automation project, planned since 2016.

The port said it was aiming to implement the full terminal rollout by June 30, "but current and further delays from Covid and the Omicron surge and the difficulties of operating under the 'traffic light' settings is putting pressure on this timetable".

There had been some improvement in its container terminal service delivery "but there is still more work to do", the port said.

"Disruption to the supply chain offshore and congestion in Auckland's landside supply chain are contributing to congestion in the terminal which is slowing our whole operation.

"While there is little we can do about these external factors, we are working to lift our productivity where we can. A key part of this is recruiting and upskilling staff. We've increased operational staff numbers by 17 per cent in the last 12 months and are looking to increase staff numbers further over the coming year."

The port is forecasting a similar performance for the remainder of the financial year, as landside supply chain congestion is exacerbated by the impact of Omicron.

In its half-year report it said fixing the congestion would require all parts of the supply chain to contribute to the solution. Shipping lines had been adjusting sailing times to minimise multiple ship arrivals and the port was working with the landside cargo community to increase the rate of container collection, particularly in off-peak times.

Demand pricing would be introduced from May "to encourage more efficient cargo flows through the port".

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Demand pricing is the imposition of a higher price at the peaks when there is high demand, lower in the off-peak to try to encourage more off-peak usage.

The company had reviewed the proposed joint venture hydrogen demonstration project and made the decision not to continue its part in it as it focused on its core business of port operations.

The six months saw several board changes.

Chairman Bill Osborne and deputy chairman Andrew Bonner retired.

Jan Dawson, one of three new directors, was named chairwoman. Dawson is a former chairwoman of Westpac NZ and deputy chair of Air NZ.

The other two new faces are Steve Reindler, a director of Z Energy and Steel and Tube, and Geoff Plunket, chairman of Blis Technologies and a former Port Otago chief executive.

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