The Auckland port handled 819,000 containers last year. Photo / Michael Craig
The Auckland port handled 819,000 containers last year. Photo / Michael Craig
The Auckland port will “never go back to being the number one port in New Zealand” and the cars are not likely to shift in the foreseeable future, says its chief executive.
Port of Auckland (POA) boss Roger Gray delivered the sobering news to Auckland councillors yesterday, but he counteredit with a lot of good news as well.
POA no longer wants to be bigger than Port of Tauranga (POT). Instead, Gray said, “We want to be New Zealand’s number one premium import port.”
The competition between the two has focused on the container trade, which has such low profit margins it can lose the ports money. Tauranga overtook Auckland as the country’s main container port in 2015 and until last year the gap continued to widen.
Even though it has now closed a bit, Tauranga handled 1.18 million containers last year, compared with Auckland’s 819,000.
“I’m not going to drop our prices to get more market share,” he told the Council-controlled Organisation Direction and Oversight Committee yesterday. “We only want profitable volume.”
POA paid a $30 million dividend to its owner, Auckland Council, in the last financial year, which finished on June 30. That’s up from $14.2m in the year before and also up from the $17m budgeted for 2022/23.
But it’s not as profitable as Tauranga, which recorded a $117m net profit after tax last year. POA’s net profit after tax was $40.5m.
Gray told the committee POA continued to perform ahead of budget in the first quarter of 2023/24. One reason is a 19.1 per cent rise in car volumes over the same quarter last year. In just one week recently, 1400 Ford Rangers arrived in the port.
The financial value of the port’s vehicle-import business is such that Gray called it “one of the last trades I want to see moved”.
He also said there was an environmental reason for it – and the whole port – staying where it is.
“The best way to progress towards a low-carbon supply chain,” he said, “is to stay where we are. It would add 15,000 tonnes of carbon emissions a year if we shifted the roll-on roll-off [vehicles] operation. We would more than double our carbon footprint if all our operations moved.”
That could be a spanner in the works for Mayor Wayne Brown’s desire to convert more of the wharves to public use.
Roger Gray, chief executive at Port of Auckland.
Despite this, Gray was extremely blunt about the council’s target of a 50 per cent cut in emissions by 2030.
“The majority of our emissions come from the diesel-powered straddle carriers. There is no technology yet to replace them. If we tried, we would have to write off $75-$100 million in assets and replace them with technology that has not been fully tested. I really don’t want to put the port through that again.”
He was referring to his predecessor’s attempt to automate the port, which has been abandoned.
As part of the automation project, the company bought 27 driverless straddle carriers and scrapped a number of its existing straddles.
Gray told the committee they are about to convert those new carriers to manual operation. The process will take 18 months and will create enough straddle capacity for at least the next 15 years.
It may also lock the port into using those diesel-powered machines for that long.
POA reported lower emissions in its annual report for last year, but also noted they will rise again “as trade volume increases”. It has an electric tugboat, called Sparky, and will buy more when the others reach the end of their life.
Safety, Gray said, is now the port’s top priority. The company has worked closely with the Maritime Union (MUNZ) to introduce new protocols and an ongoing training regime and, as a result, the number of injuries is “down significantly”.
Mayor Wayne Brown has plans for the Auckland port but it's not yet clear if they will be supported by his colleagues. Photo / Michael Craig
In an earlier part of the meeting, councillor Ken Turner referred to “the bugbear of our modern world – health and safety regulations”.
Over the past 10 years, 18 people have died in New Zealand ports.
The union has also been closely involved in the port’s wide-ranging “Regaining our Mana” programme, which includes a literacy programme, PhD scholarships in harbour health, revisions to work rosters, sustainability goals and customer focus.
Many of the initiatives have come from the union. Gray said working with MUNZ has been “one of the highlights of my job”.
The committee also went into closed session to discuss the future of the port. Mayor Brown wants to lease the port operation, to take pressure off rates, and Gray was set to be quizzed on what he thinks about that.
If Brown gets his way the lease idea will be included in the draft 10-year budget, due for public release next month. The councillors on the committee yesterday were tight-lipped about their own thoughts on it.
Simon Wilson is a senior writer covering politics, the climate crisis, transport, housing, urban design and social issues, with a focus on Auckland. He joined the Herald in 2018.
