Port strike angers manufacturing companies

Lyttelton, the third largest container port in the country, handles more than half of the South Island's container volume. Picture / NZME

Canterbury's manufacturers are frustrated that the on-again, off-again Lyttelton port strike is causing delays in receiving crucial materials, and pushing freight costs up because of the need to transport goods to and from other ports.

Lyttelton, the third largest container port in the country, handles more than half of the South Island's container volume, including 70 per cent of imports. It is the country's largest coal facility and handles a significant quantity of agricultural exports, including 44 per cent of wool exports. It also takes 6 per cent of machinery exports.

Port company management and the Rail and Maritime Transport Union have been unable to resolve disputes around pay and weekend rosters, and the union has called and suspended strike action twice since March 7.

Dieter Adam, chief executive of the Christchurch-based Manufacturers' Network said he sent out an email on Tuesday evening asking his members about the impact of the industrial action, and got a quick and sometimes angry response.

"This is affecting manufacturers who are trying to get their products out of the port to meet delivery deadlines, and those who are waiting for input goods to arrive. Some have reported the lack of input goods is expected to severely impact their manufacturing businesses, potentially delaying their own production," he said.

"Some manufacturers are having to use road and rail services to move goods through the Timaru port, at a significantly increased cost and longer time frame for transportation. We also have reports of export goods waiting in the port to leave to Australia which are needed urgently."

In particular, Adam said one of his members has several hundred thousand dollars-worth of tools that have to be shipped to Melbourne, and doesn't know how to get them there. Others are reporting having to pay between $1,000 and $4,000 in additional freight costs to move containers to alternative ports.

Although members of the Rail and Maritime Transport Union haven't actually spent much time out on strike since talks broke down on March 7, on-off threats of industrial action mean Lyttelton Port Company has been forced to divert ships to other ports, some going as far as Auckland or Tauranga.

Strike notices are still potentially in place until March 25, although the union yesterday suspended its strike action from midnight until Tuesday next week. This meant the port could start bringing ships back into Lyttelton, said LPC operations manager Paul Monk.

"With this level of strike withdrawal notification, the shipping lines, exporters and importers will be able to reorganise their schedules to some extent, allowing at least a minimum amount of shipping to return to the port."

Dieter Adam said it was annoying that the two sides appear to be close to an agreement, yet haven't got a deal.

"South Island freight services are being held to ransom over what currently appears to be a relatively small amount of money which is still in dispute. This is particularly frustrating when many of the workers involved may already be on significantly higher wages compared to other workers in the transport industry, and stand to receive further pay increases from the offer put on the table by the port.

"We need this dispute to end and get operations back to normal. The port is a critical piece of infrastructure for companies and manufacturers, and its closure for any amount of time will have significant impacts on these businesses and the wider Canterbury economy, which relies on manufacturing and exports for a large amount of its GDP and growth."

South Island agricultural exporters are also calling for a rapid resolution to the impasse. David Ross is chief executive of Lyttelton port's largest customer, Kotahi, which handles ocean freight cargo exports for around 40 New Zealand companies, including Silver Fern Farms and Fonterra Cooperative Group. Ross says the industrial action has already cost Kiwi exporters.

"Moving cargo in and out of New Zealand is complex and we need certainty of service and equipment availability. As part of the preparation for this week's industrial action we were required to divert 100 containers of cargo, by rail to Port Chalmers, to guarantee export of our customers' critical product," Ross said.

Mediation between Lyttelton Port Company and the Rail and Maritime Union is due to restart today.