New Minister of Transport Michael Wood says he's keeping a close eye on the freight supply chain congestion that's driving up import costs and delaying by weeks deliveries to frustrated businesses.
Asked by the Herald for his response to the heavy shipping congestion that's led to a freight jam in the upper North Island supply chain, Wood said his ministry was leading an inter-governmental group of officials monitoring the developments and assessing if there were areas for mitigation.
He had asked for weekly updates on the issue.
Some supply chain participants, including the Road Transport Forum, have called on the Government to drive improvements to the economically important 'golden triangle" supply chain infrastructure between Tauranga, Waikato and Auckland.
Forum chief executive Nick Leggett said he understood Wood needed time to "get around his portfolio".
"But every New Zealander will soon know how the supply chain is challenged at the Christmas peak and about not being able to get their goods."
He understands every Auckland consumer will pay $300 a year more for imported goods because of the rise in freight costs.
Bryan Johnston, owner of Auckland-based First Global Logistics, has urged Wood to order an independent review of the efficiency of the Auckland Council-owned Ports of Auckland, the country's main import port and the target of much of the supply chain wrath.
"If the port company which is owned by the council is not running efficiently there should be an independent review at ministerial level," he said.
"Now the ratepayers of Auckland are paying 20 per cent more for their goods from China."
Container ships carrying imports are waiting up to 10 days to be unloaded at Auckland. Observers point out only three of its eight cranes are working during the day and two at night. The port attributes this to a stevedore labour shortage.
Ships have been avoiding Auckland and diverting to the country's biggest port at Tauranga where the busy export season is also under way. Other New Zealand ports are busy too. Freight unloaded at Tauranga needs to return to Auckland, but space and rail and road transport is under heavy pressure.
Northport is helping get Christmas goods to Auckland shop shelves by next week taking on its biggest ever container ship handling job, but unloading of up to 2000 containers for Auckland will take three days and then they have to be trucked from Whangarei to Auckland.
Freight handlers estimate this will add an extra $1200-$1300 per container to importers' costs, which will be passed on to consumers. It could be 10 days before trucks can clear the container stack from Northport, one freight company predicts.
Johnston said shipping rates have soared 400 per cent since July due to the Covid-19-driven shortage of aircraft and vessel space. Shipping lines have also imposed a special congestion charge on containers unloading at Auckland. It ranges from US$250 to US$500-plus a container.
The world's biggest container shipping line Maersk has warned it could be the second quarter of next year before the current levels of North Island congestion ease and that the export season could be "challenging.
But the Road Transport Forum said the issue cannot be blamed solely on Auckland's port issues. Wood agrees, saying nor can it be attributed to an infrastructure problem.
The congestion at Auckland and through the supply chain was "the result of a perfect storm of international and domestic factors, of which infrastructure is only one part", Wood said.
International factors included unforeseen high demand for sea freight despite Covid-19, container congestion issues at international transhipment ports and interrupted shipping schedules.
"Our Government will improve several important freight corridors with infrastructure upgrades, such as a new 22km four-lane corridor from Whangārei to Port Marsden, the third main rail line between Quay Park and Wiri, a four-lane corridor from Omokoroa to Tauranga, and improvements on SH76 to support a more reliable freight route to Lyttelton Port," Wood said.
He noted state-owned enterprise KiwiRail had tried to help by putting on additional trains between Tauranga and Auckland "beyond what they've be contracted for".
The Herald understands the extra trains have varied from two to three a week, carrying around 420 additional containers a week, and that KiwiRail has undertaken to continue this extra service until the second week of January. The level of extra assistance after that is unknown.
Wood said KiwiRail had put on more trains in the South Island and offered to help facilitate a ship call to Wellington with distribution of freight north by rail.
"The Government has provided KiwiRail funding for additional wagons, and in the next peak freight season they can increase their capacity. Our Government still has a big task ahead to get the rail system back on track after years of under-investment and managed decline. We will restore rail to a resilient and reliable standard, improving the capacity of rail to meet freight demand."
Wood said to preserve airfreight while flight numbers remained low, the Government-supported airfreight scheme had enabled more than 3400 flights in and out of New Zealand since April.
It had extended the airfreight capacity scheme to the end of March next year.