Behind the Port of Auckland: Ford utes, tractors and a 1525% fee hike

The Port of Auckland is typically out of bounds, but Markets with Madison was let inside the operation to see what products consumers are importing and how the port company’s finances are improving, despite a global trade war.

“You get a real sense of how the economy is going,” port chief executive Roger Gray said on a tugboat circling its dock.

“You think tariffs, you think challenges, [but] we’re actually growing and that’s because Aucklanders are consuming.”

The port had seen an increase in agricultural equipment imports, such as tractors, reflecting an improvement in dairy farming earnings.

Coal imports were also more frequent with a ship for Genesis Energy arriving about every 10 to 14 days.

Port of Auckland CEO Roger Gray tells Markets with Madison he plans to continue increasing the price for trucks to access its container terminal.

However, challenges in some sectors of the economy were obvious.

“Cement is flat, structured steel through multi-cargo is the worst it’s ever been, cruise was okay this year, next year [cruise demand] drops by 30%,” Gray told Markets with Madison.

The volume of second-hand vehicle imports had already halved from its peak, he said.

“This trade of all has really been hit by the slowdown in the New Zealand economy.”

The cars that were coming in were more combustion engine conventional cars, not electric.

“I think what will also happen is, if the tariff situation stays with the US and China, I think China will start to look for free-trade markets,” Gray said.

“So rather than sending the BYDs into the West Coast, I’m expecting us to see some quite significant growth in the importation of BYDs into markets like ours.”

The Port of Auckland plans to sell two of its wharves to the Auckland Council for a price in excess of $70 million.

Gray said the company, which was owned but not controlled by the Auckland Council, planned to “sell” back two of the port’s wharves to the city for recreational use.

“Not give up, sell,” Gray explained, relating to a debate with the council about whether the land would change hands through a commercial transaction.

The port had guided that it would make a full-year net profit after tax of between $75 million and $80m in the financial year about to end.

“I’ve been quite open about starting to charge much more in access charges, because in my view, the city wasn’t getting a fair return.”

The charge for a vehicle, such as a truck, to enter the container terminal was $8 when Gray arrived at the port in March 2022.

It now cost $130 per vehicle - a 1525% increase.

And Gray planned to keep increasing the cost, he said, to be more in line with Australian ports that charged around $350.

The company had paid down $100 million worth of debt in the past three years.

It scrapped a straddle software automation project, resulting in a write-off of $65 million.

“I don’t think you should ever rule out automation, but what I would say is that automation project wasn’t the right one.

“We don’t have any capacity constraints now for at least the next 15 to 20 years.”

Go behind every aspect of the Port of Auckland operation in today’s episode of Markets with Madison.

Get investment insights from executives and experts on Markets with Madison every Monday and Friday here on the NZ Herald, on YouTube and wherever you get your podcasts.

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Disclaimer: The information provided in this programme is of a general nature, and is not intended to be personalised financial advice. We encourage you to seek appropriate advice from a qualified professional to suit your individual circumstances.

Madison Malone (nee Reidy) is host and executive producer of the NZ Herald‘s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.