This excellent article from the Shipping Gazette helps to explain the enormous supply chain difficulties being faced this year. Start with the bottom page.
This excellent article from the Shipping Gazette helps to explain the enormous supply chain difficulties being faced this year. Start with the bottom page.
The Government has honoured a campaign pledge to keep electric trains running and has committed an extra $35 million to refurbish them.
Fifteen electric trains currently operating between Hamilton and Palmerston North will be refurbished under state-owned KiwiRail – a move welcomed by the Rail and Maritime Transport Union.
“We’re thrilled to see the Labour-led government protecting Kiwi jobs,” said Rail and Maritime Transport Union general-secretary Wayne Butson.
“Union members, environmental campaigners and industry experts have all spoken out about the importance of investing in electric rail, and we clearly have a government that listens to the people.”
If KiwiRail had been permitted to proceed with National’s plans to replace the EF Class electric locomotives with DL class diesel engines imported from China, the union says it would have added an extra 12,000 tonnes to New Zealand’s carbon footprint.
The plans to switch from electric trains to diesel under KiwiRail between Hamilton and Palmerston North were announced in 2016. But an external review by engineering consultants Worley Parsons warned that diesel trains purchased from China have “a very high failure rate”.
Studies also suggested that the DL locomotives are often unreliable, overly expensive and at risk of asbestos contamination. The Worley Parsons review said KiwiRail should be switching its whole fleet to electric.
The switch to diesel would be 25 percent cheaper to run. And KiwiRail said at the time the move would reduce its carbon footprint because fewer trucks would be needed to move loads, despite diesel emitting five times more greenhouse gases than the current fleet.
Green Party Associate Minister for Transport Julie-Anne Genter, who was transport spokesperson at the time, said it was “shocking” that KiwiRail would choose the diesel options. She called on then-Transport Minister Simon Bridges to halt the plan.
In a letter to KiwiRail chief executive Peter Reidy in August last year, Labour’s transport spokesperson at the time, Michael Wood, confirmed that if Labour was elected, it would “require a halt on any work to de-electrify the [train] network”.
He said Labour would “work with KiwiRail to develop an evidence-based, long term plan to guide capital investment in the rail network,” adding, “We will consider options to expand electrification as part of this plan.”
Mr Butson believes New Zealand must “electrify more of our rail network, not less”.
“The highly skilled workforce in KiwiRail’s workshops can now build a modern, sustainable fleet of locomotives that will be the envy of the world,” he said.
National’s transport spokesperson Paul Goldsmith has been contacted for comment.
KiwiRail has started work on geotechnical investigations along a section of the new route for the proposed rail-link to the port at Marsden Point in Northland.
KiwiRail Acting Chief Executive Todd Moyle says the scoping work will inform the business case for Northland rail currently being developed by the Ministry of Transport.
“We’ve held a designation for this rail spur for several years, and are very pleased to be now taking steps to determine how the line would be built,” says Moyle.
“These investigations will provide us with more detailed information about the design and potential construction methods for the link, as well as costs and timeframes.
“To begin with, we’ll be working at Mata Hill over the next few weeks, using a drilling rig to take samples from a number of locations,” he says.
These will bore up to 30 metres into the ground to remove samples for analysis.
“We are also investigating what associated works would be needed on the North Auckland Line to allow for more freight to be carried by rail to and from Northland,” says Moyle.
“The Government has indicated its strong support for the value rail delivers in the regions and the benefits it brings for New Zealand by taking trucks off the road, improving safety and reducing carbon emissions.
“The work we are doing in Northland is one of a number of projects underway to ensure we deliver stronger connections for a better New Zealand,” he says.
The November 2016 quakes put Wellington’s container cranes out of action for 10 months. Now CentrePort is looking at investing to accept bigger container ships. But not everyone agrees, Thomas Coughlan reports.
Wellington’s CentrePort is at a crossroads. Flush with cash after more than $170 million of earthquake insurance payouts, the port now has an opportunity to reposition itself for the future. But its proposal to dredge the harbour entrance to welcome in much bigger container ships is being challenged by those worried it will waste money on ships that never come. However, the quakes have also ironically proven the worth of keeping ports open to provide a back-up if road and rail fail.
Even before the earthquakes, CentrePort’s future was uncertain. Container ships are getting bigger and bigger and Wellington runs the risk of falling behind.
The port currently supports ships with a capacity of 4500 containers, half the capacity of the Port of Tauranga, which hosts the 9640 container Aotea Maersk, the largest container ship to visit New Zealand.
The port has long had an eye on dredging the entrance to Wellington Harbour to allow the port to host ships with up to 6000 containers. The plan was put on hold after the earthquake, but is again on the agenda as the port recovers.
But figures in the industry question the wisdom of such massive capital outlay. If trade tensions bubbled over, the project could become a white elephant, forcing CentrePort, and its owners, the Wellington and Horizons Regional Councils to bump up port fees.
Detractors say the port should stick to what it’s good at: providing services for the 10 Cook Straight ferry sailings it hosts each day. They say attention should be paid to resilience and making sure that when the next big one hits, the main link between the North and South Islands is not cut off.
Wellington’s future has country-wide implications. Ninety-nine percent of New Zealand’s imports by weight arrive on ships and the Government is keen to increase the amount of coastal shipping in New Zealand as part of a push to take trucks off roads.
This is likely to form part of the Government’s second-stage General Policy Statement on Land Transport, which is due next year.
Scraping the bottom
Shipping is an industry of maxims. Speak with anyone for long enough and they will give you one or two inviolable rules about how the industry operates.
CentrePort CEO Derek Nind is no exception. Speaking to Newsroom he said the major trend he had experienced in his career was the size of ships increasing.
“In my 25 odd years all we’ve seen are container ships getting bigger,” he said.
In shipping, capacity is measured in containers, which are known as TEUs or “20-foot-equivalent”. The harbour currently [handles] ships carrying roughly 4500 TEUs. With dredging, it could host ships of up to 6000 TEUs.
Container ships have grown massively in size. In 1996, the largest ship in the world carried 6000 TEUs. Now, new classes of container ships carry up to 21,000 on ships each as long as four rugby pitches.
Those sorts of ships are unlikely to visit New Zealand anytime soon. The current international trend for hubbing means that they tend to operate on routes between major trading centres, like Shanghai and Singapore.
Ships that stop over in New Zealand tend to be much smaller, although they are growing. Since 2016, Tauranga has hosted visits of the the 9640 TEU Aotea Maersk. Though relatively small by international standards, in 1996, it would have been the largest ship in the world.
Nind says the improvement would encourage ships sailing round New Zealand to call in to Wellington. In shipping terms, this is known as intermediacy and diversion. Wellington had good intermediacy to ships passing along the cost. Ships could call in to port and potentially only face a four or five hour diversion from their regular route.
“Intermediacy is if you’re calling at Tauranga and you’re calling at Lyttelton we’re a four hour deviation,” he said.
But dredging is expensive. Costings done under the leadership of former CEO Blair O’Keefe came to around $40 million. It wouldn’t be extensive. Wellington is a naturally deep harbour, but for a lip at the entrance, which bars larger ships from stopping at port.
With inland transportation costs currently high, Wellington is well placed to take advantage of logistics firms looking to [cut] costs by shipping products as close to their end destination as possible. CentrePort can take advantage of road and rail connectivity in the Lower North Island and ferries to the top of the South Island.
But the programme has some detractors.
Annabel Young, Executive Director of the New Zealand Shipping Federation, thinks the port should stick to what it’s good at: inter-island ferries.
She backs this up with another maxim: “Ships go where the cargo is”.
“This is all driven by ‘where is the cargo and how much is there?,” she said.
Young is a former National MP and her sister is Nicola Young, a Wellington City Councillor and mayoral candidate. Young is concerned that without adequate cargo in Wellington, the port will be forced to recoup the cost of dredging by raising port fees.
“If they do the capital work and the ship doesn’t turn up, consumers will pay,” she said.
The question of cargo is a touchy one in New Zealand. After the Kaikoura earthquake, cargo destined for CentrePort was offloaded elsewhere before making its way to Wellington by truck or train.
CentrePort has taken some of that business back, although it still has some way to go. In the 2016 financial year it offloaded 131,645 TEUs, this more than halved to 51,750 in 2017 before bouncing back to 84,755 this year.
But the port is focused on making sure it’s the nexus for shipping in the Lower North Island, partnering with KiwiRail to develop rail connectivity. Nind said the port wants to be “the port of choice for Central New Zealand.
It has developed rail hubs in Whanganui and New Plymouth and leverages Wellington’s strong transport connections with Palmerston North. This encourages cargo to travel via Wellington, rather than Napier or other ports.
But even with these connections, Young says there is still a limit to the amount of shipping that will pass through the Lower North Island, based on the size of local industries. These are dwarfed by industries based in the highly productive “Golden Triangle” of Hamilton, Tauranga and Auckland.
Roll up and roll on… and another working group.
Young believed attention needed to be directed to the Cook Strait ferries.
The port is currently part of a working group comprised of the Wellington City and Regional Councils, ferry operators, and NZTA about the future of the Cook Strait connection.
The working group is currently looking at the possibility of combining the Interislander and Bluebridge terminals into one and looking at ways to ensure the ferries can continue to service both Wellington and Picton after a major earthquake.
State Highway 1 technically runs over Cook Strait, which means the Government and NZTA have a strong interest in making sure the connection is resilient. It services seven million tonnes of cargo and 1.2 million passengers each year.
Nind noted that the port was quick to have both the Interislander and Bluebridge terminals up and running after the Kaikoura earthquake.
Wellington — and the whole country — will hope the Port fares similarly next time.
Two weeks of talks in London on what measures the global shipping sector should take to reduce its climate impact have failed to make progress. Governments meeting at the UN’s International Maritime Organisation (IMO) were supposed to start delivering on their April commitment to decarbonise international shipping but instead became bogged down in procedural matters. The Clean Shipping Coalition  said the total lack of urgency was in stark contrast to the impassioned pleas for action made to delegates by the authors of the recent report of the Intergovernmental Panel on Climate Change (IPCC).
Measures are urgently needed if the IMO’s agreed plan – to reduce shipping’s carbon intensity by at least 40% by 2030 and total emissions by at least 50% by 2050 – is to be met. The April agreement included a commitment to deliver immediate measures that reduce emissions before 2023. Yet developments this week mean that consideration of those measures will now only commence in May 2019, over a year after the original agreement was reached.
Bill Hemmings, shipping director at Transport & Environment, said: “Time is running short but that’s not the feeling you get inside the room. The commitment last April to agree and implement in the short-term immediate emissions reduction measures has fallen victim to procedure, bureaucracy and delay spearheaded by countries who were never really on board. The US, Saudi Arabia and Brazil head that list. And all this despite the authors of the IPCC report making absolutely clear to IMO members that now is the time for action.”
The lead proposal being considered is mandatory speed reduction – either as a standalone measure or as an element of one that sets a target for improving ship efficiency. Either approach, if done right, could meet the agreed 2030 carbon intensity goal and deliver fuel savings for industry. Sections of industry oppose speed reduction but have failed to put forward any alternatives that come close to the cut in emissions that will be required.
John Maggs, senior policy advisor at Seas At Risk, said: “The stakes are high. Ships have deployed slow steaming over the past decade in a way that has seen dramatic reductions in emissions. The world is not blind to this. Speeds must initially be capped to avoid backsliding, then progressively lowered. The impact on emissions is immediate and incontestable. The commitment of many at the IMO to genuinely reduce ship emissions is not.”
The IMO today also overturned a decision to tighten new ship design standards, known as the EEDI, even for container ships meeting the standard a decade in advance.
Bill Hemmings concluded: “While congratulating itself on quite mediocre progress on greenhouse gas emissions, the IMO had no qualms in killing any remaining hopes for requiring the building of more efficient ships in the future. If this is the pace being set to implement the IMO’s Initial GHG Strategy, then some of the delegates returning back home from future negotiations won’t have a country to land on.”
Shipping emits 3% of global CO2 – and emissions are increasing year on year – yet it remains one of the few sectors of the global economy without sector-specific emissions reduction measures.
One of the things to be affected by international legislation involves ship emissions. By January 1, 2020, just 15 months away, new UN-enforced ship emission laws come into effect in which container ships will have a 0.5% sulphur cap imposed.
For the shipping lines that means one of several things. One of these is to install special “scrubbers” to reduce the amount of sulphur (CO2) emitted into the atmosphere. Another is to avoid the use of conventional thick bunker fuel oil; some ships are now being designed around using liquid nitrogen gas (LNG) instead of oil-based fuels.
The major shipping lines, led by Maersk, MSC and CMA CGM, have reacted in a startling way, saying that the costs of adapting their ships will be passed on to the cargo owner.
These charges will be as high as $160 per TEU (20-foot container equivalent). MSC intends adding a fuel surcharge as from January 1, 2019, one year ahead of the IMO requirement, “to help customers plan for the impact of the post-2020 fuel regime”. The other lines have followed similarly.
CMA CGM has placed orders for nine LNG-powered container ships and will probably use scrubbers for the existing fleet.
According to Maersk the sulphur cap will increase its fuel bill by up to $2 billion a year, to be recovered with bunker surcharges.
However, the Global Shippers Forum (GSF) calls the surcharges “suspicious”.
“Given historical experiences with surcharges, shippers are naturally suspicious over something shipping lines say is ‘fair, transparent and clear’. GSF will be taking this piece of financial engineering apart piece by piece as we suspect this has more to do with rate restoration than environmental conservation. Asking customers to contribute to new environmental costs is to be expected, but this charge lacks transparency; no data is available to let customers work out how the charge has been calculated.”
The GSF also said the lines were “helping themselves to a whole year of higher fuel surcharges a full 12 months before the rules requiring them to use surcharges actually come in”.
These new IMO rules refer back to UN climate change talks held in Durban in 2011.
Meanwhile, ship owners and operators, engine builders, oil companies and others are devising ways at reducing ship emissions while keeping costs down. The changes are all about global warming and an international response to the challenges facing the world generally and some nations more particularly. Consider the dilemma facing a country like the Marshall Islands which boasts one of the world’s biggest ship registries, but whose low-lying islands and atolls lie threatened by the rising waters of global warming.
Another challenge involves the fast-developing trend towards autonomous shipping at sea and within the ports. The march towards a new era is being unveiled with unmanned ships and unmanned port equipment under development or already in service.
The port of Shanghai, the world’s busiest container port handling an incredible 40.23 million TEU in 2017, almost seven million TEU more than its nearest rival, Singapore, already has a large section of the port under automatic control, with just a few people in attendance in a control room.
When the Shanghai Yangshan Deep-Water Port’s Phase IV container terminal started its trial operations in December last year, it signalled the way for future port terminal handling. The automated Phase IV terminal will cement Shanghai’s leading position with an additional seven berths and another 4-6 million TEU of capacity. That’s more capacity than the whole of South Africa’s four container ports and 15 berths combined!
At sea a similar revolution is taking place. Already in the Baltic fully automated coastal or “short-sea” operations are testing the ability of ships to load cargo in one port and deliver it to another without anyone “driving” it.
The Norwegians are among the leading developers in the autonomous field, with Kongsberg leading the way with a company called Yara, to develop the world’s first all-electric, fully autonomous container ship.
To become meaningful ships with considerably more capacity than 100 containers will be necessary but they will follow, more than likely burning LNG and with just a few maintenance technicians on board. Savings will be considerable but before anyone cries about job losses, consider that there will be a reported shortage of 147000 officers worldwide by 2025.
“Sailors fear for their jobs when they hear about what we are doing, but autonomous does not mean unmanned,” said Peter Due, a director at Kongsberg Maritime.
Source: The Mercury
The Tauranga Northern Link has been taken off the chopping block, with the NZ Transport Agency confirming it will build the highway – albeit in a different form – after months of speculation.
The new state highway between Tauriko and Te Puna will have two lanes rather than the four initially proposed, but the agency was looking at adding extra lanes for buses and other high-occupancy vehicles.
Critics have welcomed the decision but also expressed frustration and noted the continued lack of a timeline for when construction of the highway, and other State Highway 2 improvements, would start.
The northern link was one of four major roading projects between Tauranga and Waihi that have been in limbo for months as the agency re-evaluated to see how they fitted with the coalition Government’s transport priorities.
Te outcomes of those re-evaluations were announced yesterday.
Agency spokesman Brett Gliddon said it would speed up and extend its plan for safety improvements on SH2 between Waihi and Te Puna, one of New Zealand’s deadliest stretches of highway.
Previously-announced funding of $101 million was ringfenced for improvements between Waihī and Ōmokoroa over the next five years, including 26 intersection upgrades, wider centrelines, flexible median barriers and protections against other hazards.
The agency wanted to roll those out faster and start designing and finding funding for similar improvements, to be constructed simultaneously, for the stretch between Ōmokoroa and Te Puna.
The agency would also progress with a major Omokoroa Rd intersection upgrade. What form that would take was still to be decided but Gliddon said a roundabout would make sense.
“We want to get on to this as quickly as we can.”
Gliddon said the long-planned Katikati bypass, however, would not happen any time soon.
The agency would keep the land designations but he said the project was not as high a priority as others.
Stuart Crosby, chairman of the Bay of Plenty Regional Council’s transport committee, said the Katikati community would be disappointed to see the bypass put on the backburner.
Katch Katikati promotions manager Jacqui Knight said the lack of a bypass was stifling the development of the town.
“It doesn’t have to be a four-lane highway, there just needs to be an alternative route.”
Gliddon said the agency hoped to have more news about the timelines and funding for projects in December, after it completed the re-evaluations of several other projects around New Zealand and weighed the priorities.
He said $216m of previously ringfenced funding for the northern link was still secure, but more was needed before construction could start.
National MPs have claimed the Government had cancelled the Tauranga Northern Link.
Bay of Plenty MP Todd Muller was unrepentant yesterday, saying the tender for his government’s proposed northern link – which would have seen construction starting last month – had been cancelled, criticising the new plan as “half-baked”.
Phil Twyford, Transport Minister, Labour
“NZTA is prioritising urgent safety improvements to these roads to make them more forgiving of human error. Drivers will always make mistakes and the government’s job is to stop those mistakes turning into tragedies.
Responding to Muller he said: “If the TNL was so desperately needed five years ago, why didn’t Todd Muller’s government and former transport minister Simon Bridges build it?”
Matthew Farrell, Fix the Bloody Road campaign spokesman
“Overall, I think we have got to be happy that a road that had its tender process cancelled is now going to be built, albeit in a new form.
While there may be some disappointment it’s not a four-lane road, you have to see it as a win that this project still has more than $200 million in ring-fenced funding and will be going ahead, unlike some other projects elsewhere in New Zealand.”
Swire Shipping has become the first company to send containerized grain from one country to another powered entirely through electronic bills.
Bolero International, which specializes in making trade finance go digital, facilitated these bills. Labelled as electronic bills of lading (eBL), they have never been used on the route between Australia and New Zealand before, and they should significantly speed up trade route deliveries.
Swire Shipping achieved this in collaboration with Cargill Australia, which provides the grains in question and various other commodities, and BSM, which optimizes the trade execution process.
With BSM offering easily facilitated execution solutions and Bolero providing multi-party documentation processing, Cargill can save a large amount of resources by digitizing as much of the trade route process as possible.
The project has already proved to be a success, and eBLs are now set for use in more trade routes. The route that connects Australia to the Solomon Islands is next on the list for Cargill. With the certification process becoming more digital with each passing year, there is a clear need for companies to keep on top of the trends and react to market expectations. The burgeoning fintech sector is making this a lot easier for the bigger companies.
Digitized processes offer several other benefits, which include increased security. Backup takes place for all the proper documentation, and losses that cause serious backlogs and delays are less likely to occur.
Swire Shipping General Manager Jeremy Sutton said that the company is “wholly committed to bringing customers the highest standards of service through sustainable innovation.” He went on to describe its “successful use of Bolero’s electronic bills of lading to support a grain shipment,” calling the deliver “a significant first for us and for the region.”
Sutton was quick to point out how Swire Shipping has “been impressed with the substantial gains in speed of execution, simplicity of use and security” that came with the eBL pioneering, and said that he expects this accomplishment to be just the first of many.
Meanwhile, BSM Managing Director Robert Flemming hailed his business offering, saying that it is “dedicated to smoothing workflows and super-charging the efficiency of trade.” He added that the use of eBLs “demonstrated all the advantages of digitization in terms of speed and cost.” Flemming expects that BSM’s “partnership with Bolero is certain to go from strength to strength.”
Cargill, the company set to see the largest benefits from this process, feels that it is great news for several reasons.
David Werner, Trade Execution Manager for Cargill’s Australian operations, said that he is delighted by “the speed and efficiency generated by the Bolero solution.” He lauded “the fast release of our cargo,” saying that it would give “our customers the best level of service possible.”
He went on to mention that Cargill believes that “our use of digitized trade documentation is certain to expand to other routes in line with our determination to bring customers the real benefits of digital innovation while upholding the integrity of our documentation.”
With current tech advances showing no signs of slowing, trends such as this should only continue.
The owner of New Zealand’s Napier Port has dismissed concerns about its planned NZD$350m upgrade and that the port’s recent growth could be short-lived.
Hawke’s Bay Regional Council could sell up to 45% of Napier to fund the port’s growth requirements, but as public consultation begins on funding options, New Zealand Shipping Federation executive director Annabel Young said most of the port’s extra business is due to Napier taking business from Centreport following the Kaikoura earthquake, reported Radio New Zealand.
Ms Young stated that “Centreport thinks it is going to claw back its trade and Napier thinks it’s going to hang on to it,” stressing that a plan involving any extra charges would end up impacting customers the most. However, Hawke’s Bay Regional Council chairperson Rex Graham said that was “nonsense”.
Weighing up options
Expansion options include the council’s preferred option of listing up to 49% of the business on the stock market; finding an investment partner; a long-term leaseholder; or keeping 100% ownership and making ratepayers foot the bill by hiking rates by 53% next year.
Another proposal by Councillor Paul Bailey is for the port to take on more debt to pay for the upgrade and then charge its customers an extra fee to make up the cost.
While Ms Young stated that “my worry is if they expand and those large ships don’t come then it gets added to the pricing chain and you end up paying for it in your packet of biscuits,” Mr Graham said that all “our commodity prices are at all time highs. I’ve never seen the Hawke’s Bay economy as strong as this in my working life.”
People heating their homes and using their vehicles are the biggest causes of poor air quality in New Zealand, according to new statistics.
The Ministry for the Environment and Statistics New Zealand has released its latest report in the environmental reporting series as legally required.
Our air 2018 showed there had been an improvement with levels of some pollutants declining, however there are persistent problems such as heat sources.
Burning wood or coal to heat a home is the largest single-cause of air pollution by humans in New Zealand.
Wood burners heated 33 percent of North Island homes and 47 percent of South Island homes, according to the last available data, however, burning wood as a heat source had declined over time.
Coal burning accounts for about four percent of residential emissions, but the report said this could be an underestimate.
Other human factors contributing to air quality include the burning of wood for construction and manufacturing processes.
Emissions from vehicles are also a major contributor of poorer quality air from exhausts, but also through the wearing and abrasion of pavement, tyres and brake pads.
Shipping was an important source of sulphur dioxide emissions, and the report said the size and number of international cargo ships and cruise ships visiting New Zealand continued to grow.
Recent intensification of agriculture could be causing an increase in ammonia emissions, which could affect ecosystems and biodiversity.
Read the full report here:
The report mainly deals with two types of air pollution – PM10 and PM2.5 and these refer to what is known as the particulate matter, or particles suspended in the air that are small enough to be inhaled.
PM10 is particles less than 10 micrometres and PM2.5 is particles less than 2.5 micrometres.
In general, the smaller the particle, the greater the impact on human health because they penetrate more deeply into the human body.
Modelling suggested that in 2016 the number of premature adult deaths per 100,000 people from exposure to PM10 in New Zealand was 8 percent lower than in 2006.
But relative improvements in air pollution effects appeared to be largely due to more people living in areas with lower PM10, such as Auckland, rather than an actual reduction in the pollution.
New Zealand was one of the few developed countries with no air quality standards for PM2.5, so it wsas measured against the World Health Organisation’s guidelines.
Long-term data showed that four of the 11 airsheds monitored for PM2.5 had an annual average higher than the WHO guideline between 2014 and 2016.
According to international studies, effects of air pollution included shortness of breath and coughing, heart attack, stroke, diabetes, and premature death. New Zealand specific studies on the health impacts were limited.
The report stressed that the knowledge of environmental issues in the New Zealand air domain was incomplete.
There was very little data about the impact of air pollutants on natural ecosystems and biodiversity.
There was also limited information on indoor air quality in New Zealand, which was important because people spend 80 to 90 percent of their time inside and outdoor air (which could be polluted) could make its way inside.