Containers Lost At Sea – 2020 Update

in International Shipping News 10/07/2020

In 2019, the international liner shipping industry transported approximately 226 million containers, with cargo transported valued at more than $4 trillion. Proper packing, stowage and securing of containers and reporting of correct weight are very important to the safety of a container ship, its crew, and its cargo, to shore-based workers and equipment, and to the environment. However, even with proper packing of the cargo into the container, correct container weight declaration, and proper stowage and securing aboard ship, a number of factors ranging from severe weather and rough seas to more catastrophic and rare events like ship groundings, structural failures, and collisions can result in containers being lost at sea. Since 2011, the World Shipping Council (WSC) has undertaken a survey of its members to accurately estimate the number of containers that are lost at sea each year. The WSC’s member companies operate more than three quarters of the global containership capacity; thus, a survey of their losses provides a valid basis for a meaningful estimate of the total number of containers lost at sea. The 2020 update gathered information from years 2017, 2018 and 2019.

Methodology of the Surveys
In each of the surveys conducted in 2011, 2014, 2017, and 2020 the WSC member companies were asked to report the number of containers lost overboard for the preceding three years. For the 2020 report, all WSC member companies responded and together, they represent 80% of the total global vessel container capacity deployed at the time of the survey. WSC assumes for the purpose of its analysis that the container losses for the 20% of the industry’s capacity that is operated by carriers that did not participate in the survey would be roughly equivalent to the losses reported by the responding carriers representing 80% of the industry’s capacity.

The total annual figure reported by WSC members is adjusted upward to provide an estimated loss figure for all carriers, both WSC members and non-members, to arrive at an estimate of total containers lost. As expected, some carriers lost no containers during the period, while others noted a significant incident where hundreds of containers were lost in a single event.

There are more than 6,000 ships carrying containers around the world at any point in time. In previous surveys, WSC asked members to distinguish between losses that occurred because of a catastrophic event on a single sailing, defined as one where 50 containers or more were lost in a single incident, and non-catastrophic losses. This distinction was in part aimed at getting some insight into the general nature of losses. The conclusion after twelve years is that more than half of all containers lost at sea are attributable to the limited number of major incidents that have occurred during those years.

However, the industry recognizes that all containers lost at sea represent safety and environmental hazards regardless of how and when those containers were lost. Accordingly, the 2020 Update to the Containers Lost at Sea Survey no longer differentiates between catastrophic and non-catastrophic losses and includes only total containers lost at sea. It is this number that the industry seeks to reduce, and we continue to work with governments and other interested stakeholders to identify losses, their causes, and actionable solutions to reduce the losses in the future.

Upon review of the results of the twelve-year period (2008-2019) surveyed, the WSC estimates that there were on average a total of 1,382 containers lost at sea each year. With twelve years of data, it is particularly interesting to look at the trend of three-year averages, reported in each of the survey updates. In the first period (2008-2010), total losses averaged 675 per year and then quadrupled to an average of 2,683 per year in the next period (2011-2013). This was due in large part to the sinking of the MOL Comfort (2013) that resulted in a loss of 4,293 containers and further impacted by the grounding and loss of M/V Rena (2011) resulting in approximately 900 containers lost. Fortunately, there have not been such significant losses in a single incident reported since.

Nevertheless, the next period (2014-2016) was marked by another vessel sinking with the tragic total loss of the SS El Faro (2015) with the loss of 33 crew members and 517 containers. Even with that, the three-year average annual loss for the period was 1,390, about half that of the previous period. The downward trend continued into the most recent period (2017-2019) when the 3-year average annual loss was almost halved again to 779. There were no individual losses as significant as those noted in the previous periods, which is a welcome development. However, 2018 and 2019 were marked with a few incidents that each lost more than 100 containers.

Active Safety Improvement Initiatives
Containers lost overboard represent less than one thousandth of 1% of the roughly 226 million containers currently shipped each year. Nevertheless, the liner shipping industry remains committed to continuing to partner with governments and other stakeholders to enhance container safety in order to further reduce the number of containers lost at sea, including:

• Amendments to the Safety of Life at Sea (SOLAS) Convention: On July 1, 2016 changes to the Safety of Life at Sea (SOLAS) convention requiring verification of container weights before packed containers may be loaded aboard ships went into effect. This is an effort WSC advocated in support of for many years. The requirement makes container weight verification a legally binding condition for vessel loading. Mis-declared container weights have contributed to the loss of containers at sea, as well as to other safety and operational problems. For more information about this issue, visit: http://www.worldshipping.org/industry-issues/safety/cargo-weight

• Code of Practice for Packing of Cargo Transport Units (CTU Code): The IMO, the International Labour Organization (ILO), and the United Nations Economic Commission for Europe (UNECE), with industry support, produced a code of practice for the packing of CTU, including containers, outlining specific procedures and techniques to improve safety, such as how to ensure correct distribution of the weight inside the container, proper positioning, blocking and bracing according to the type of cargo, and other safety considerations. The code was approved in late 2014, and work to revise it is scheduled to commence in the near future. For more information about this and other initiatives related to the improved safety of handling containers, visit: http://www.worldshipping.org/industry- issues/safety/containers

• Revised ISO standards for container lashing equipment and corner castings: In support of the IMO’s efforts to enhance container safety, the International Organization for Standardization (ISO), with the industry’s active participation, revised its standards regarding lashing equipment and corner castings and the new standards went into effect in 2015. Both standards are poised to be revised in the near future. For more information about this issue visit: http://www.worldshipping.org/industry- issues/safety/containers

• Discrepancy in container stacking strength: WSC, working together with other industry associations, proposed to the IMO’s Sub-Committee on Carriage of Cargoes and Containers (CCC) 6 in September 2019 to align the Safe Container Convention (CSC)’s and ISO 1496-1 container stacking strength requirements, noting that the existing discrepancy might have significant safety implications, including collapsed container stacks and containers lost at sea. However, CCC 6 was not able to agree on specific steps but instead invited interested

delegations to develop a proposal for a new output for consideration by the IMO’s Maritime Safety Committee. WSC staff continues to engage with various parties for how best to address the current discrepancy in container stacking strength.

• Mandatory reporting of containers lost at sea: WSC is a co-sponsor of a submission to IMO’s Maritime Safety Committee (MSC) 102 by the European Union with a proposal for a new output on the mandatory reporting of containers lost at sea. The liner shipping industry supports such a mandatory reporting requirement and will continue to advocate for an early implementation of an effective and practical requirement.

• Revision of the IMO’s guidelines for the inspection programs for cargo transport units, including containers: CCC 6 agreed, in principle, to amend the IMO guidelines for inspection programs in order to: 1) further clarify that the selection criteria should be applied equally to CTUs carrying all types of cargoes, rather than being specifically applied on those declared to be carrying dangerous goods; 2) to adequately refer to the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU Code); and 3) to cover the reports from non-governmental organizations. A drafting group and subsequently a correspondence group have been reviewing the current guidelines, but further work is required before new revised guidelines may be adopted by the Sub-Committee. WSC has been a participant on both groups.

There are over 6,000 containerships continuously operating on the world’s seas and waterways linking continents and providing vital supplies to communities around the globe. The liner shipping industry’s goal remains to keep the loss of containers carried on those ships as close to zero as possible. Carriers will continue to explore and implement preventive and realistic measures to make that happen and welcome continued cooperation from governments and other stakeholders to accomplish this goal.
Source: World Shipping Council

Auckland port move: Review claims ‘omissions and flawed logic’ in plan to relocate to Northland

The case for moving Auckland’s port business to Northland does not fit the criteria of the working group proposing it, says a new analysis.

A review by Auckland Council said it is not satisfied the move option, recommended by the New Zealand First-driven group, justifies the estimated $10 billion of investment needed.

The council review described an economic case advanced by Ernst and Young as “inscrutable”, because it lacked detail on how it found the re-location made sense.

Ports of Auckland continues to invest in its site, with a hydrogen fuel plant and automated straddles
SUPPLIEDPorts of Auckland continues to invest in its site, with a hydrogen fuel plant and automated straddles

The work by the council, which owns Ports of Auckland and the 77 hectares of waterfront land it operates from, is the most detailed criticism yet of the controversial proposal to wind down the port and transfer its business to Marsden Point, perhaps within a decade. 

“The preferred option appears to be an extremely expensive way to relocate jobs to Northland from Auckland,” said the council analysis.

An aerial view of Ports of Auckland from the east
NONEAn aerial view of Ports of Auckland from the east

The council analysis is of the interim report by the Upper North Island Supply Chain Strategy working group, released in October along with an economic analysis from EY, of the future options for the ports at Marsden Point, Auckland and Tauranga.

The group, backed by EY’s findings, recommended re-locating Auckland’s port to Northland, reflecting New Zealand First’s 2017 election policy, before getting agreement from Labour in the coalition agreement to conduct the UNISCS study

The final report has just gone to the Government and will be considered by cabinet in December.

New Zealand First MP Shane Jones is driving the case to relocate Auckland's port to Northland
TOM LEE/STUFFNew Zealand First MP Shane Jones is driving the case to relocate Auckland’s port to Northland

Analysis of the interim report by Auckland Council’s chief economist unit and its strategy and research department said the re-location option did not meet the principles which the working group established for itself.

It said instead of “cost efficiency”, costs would rise, “maintaining the level of competition” would not be achieved, and removing a key supply point for Auckland would not “maintain or improve the resilience of the supply chain”.

The review disputed the working group’s conclusion that clearing prime waterfront land would be an economic windfall through higher rates for Auckland Council.

“There is no evidence for this – any new activity on the waterfront will likely displace activity elsewhere in the city,” it said.

The council also said the economic case did not seem to take into account the significant spending before any benefits might flow.

“Investment in Northland required to handle Auckland’s freight volumes would need to be complete and operational before any managed closure (in Auckland).

“This means the net benefit is probably much lower than estimated in the report,” said the council review.

The council said the assessed impacts on employment were inconsistent, suggesting few jobs would be lost in Auckland, but 2000 created in Northland.

“A $10 billion project to relocate 2000 jobs is a very expensive way to relocate jobs (roughly $5 million per job),” said Auckland Council.

It also questioned whether the rail infrastructure that would be needed to run more than 100 freight trains a day through Auckland, as well as the truck traffic generated by a freight hub near Kumeu, had been fully assessed.

Another analysis of the EY economic impact report, seen by Stuff, but with the name of the author not disclosed, believed EY and the group might have over-estimated the net economic benefit of the move by nearly four times.

New Zealand First MP, and Associate Transport Minister Shane Jones who is championing the case to relocate to Northport, said he was aware of the differing views.

“There was always doubt about EY’s work (on the move) – but I just consider that to be part of the consultancy gossip chain,” Jones told Stuff. 

The UNISC working party was chaired by Jones’ friend and Northland neighbour, businessman Wayne Brown, who took part in a television interview on TVNZ’s Q&A on Monday night in which several lines said to be from the final report, still unseen by cabinet, were put to him.

Stuff asked Jones whether the interview was appropriate.

“I don’t think it’s disproportionately unorthodox,” said Jones, who had been informed the interview would take place, but said he had not discussed with Brown what should or should not be said.

“Wayne Brown is someone my leader (Winston Peters) and I regard as an incredibly successful businessman, interested in Northland – but he is his own man,” Jones said.

The Government had made no promises on whether the idea proposed by New Zealand First in 2017 will progress.

“We undertook that we would complete the study, and we will,” Prime Minister Jacinda Ardern told Stuff in October.

“I am not going to make commitments beyond receiving the final report because we need to see what evidence has ben compiled, and what the report tells us,” Ardern said.

The conduct of the working group’s study has created tension between it and Auckland Council, with sparring between Brown and Auckland Mayor Phil Goff who favoured the gradual redevelopment of the waterfront, but insisted there would need to be a price negotiated. 

Ernst and Young was approached for comment, but declined.

Stuff

Did KiwiBuild not teach this lot anything?

Duncan Garner 05:00, Nov 16 2019

OPINION: So now Winston Peters and his Government want to move the Ports of Auckland to Whangārei.

Such a small little thing to do that will barely cause much disruption at all. Said no-one ever.

Does anyone have any idea how ginormous this pie-in-the-sky promise really is?

Containers being loaded on to rail wagons at Ports of Auckland. Rail freight is a major part of the proposed expansion of Northport, in Whangārei.
Containers being loaded on to rail wagons at Ports of Auckland. Rail freight is a major part of the proposed expansion of Northport, in Whangārei.

Why? When? Where does the cargo go in the meantime? Has it been done before anywhere in a sane Western nation?

I applaud ambition usually, but this Government doesn’t appear to have a master plan at all. It has a series of massive work plans and ideas whose time may never come.

They being an expert panel who probably have no real idea, but call it a panel and it gets serious. Seriously, with Shane Jones’s wacko performance to farmers and now this out-there port wind-up, no wonder business is rightly nervous.

This port idea is shamelessly the work of Jones and Peters. It’s not just economic nationalism but is regional parochialism at its best – or worst, depending on how the future pans out.

NZ First wants to move Auckland port operations to Northport, in Whangārei.
NORTHPORTNZ First wants to move Auckland port operations to Northport, in Whangārei.

So will the roads be upgraded north of Auckland, and what trains are needed, and how can it be done when we can’t get a passenger rail system to Auckland Airport?

Peters has spoken publicly about the port report like it’s a done deal, and the money will come shortly. But how can this happen so easily if the same Government couldn’t build a few houses for the middle class? Taking the build out of KiwiBuild since election night 2017. 

Also no gain like a capital gain, as in the tax that sunk confidence but never went anywhere. And while we are at it, so much for ETS for farmers, because Labour suddenly froze.

The Whangārei port move is "shamelessly" the work of NZ First deputy Winston Peters and his colleague Shane Jones, writes Duncan Garner.
LAWRENCE SMITH/STUFFThe Whangārei port move is “shamelessly” the work of NZ First deputy Winston Peters and his colleague Shane Jones, writes Duncan Garner.

Anyway, the prime minister would hardly say boo about sinking the ports of Auckland into northern waters for fear of saying the wrong thing.

She hadn’t seen the report, but an hour later Winston was word for word all about it. So why was he all over it and the country’s most high-profile Auckland MP, who happens to be the PM, didn’t know anything. Is it deliberate and, if so, let’s drag her deep and demand answers.

It’s not a Government scared of trying anything and everything. Something has to work soon, if not in education, then health. If those then fail, maybe it’s in tax reform, but we know that answer, so maybe it’s on climate reform. Oh yes, the Zero Carbon Bill. That’ll do it.

Duncan Garner: "I applaud ambition usually, but this Government doesn't appear to have a master plan at all. It has a series of massive work plans and ideas whose time may never come."
SUPPLIEDDuncan Garner: “I applaud ambition usually, but this Government doesn’t appear to have a master plan at all. It has a series of massive work plans and ideas whose time may never come.”

I think this Government is dreaming, even on some of the small stuff. Standards and credibility matter, and they need to get busy, but they need to be believable.

Their eyes are bigger than their stomachs, and I wonder how much voters can digest if it’s a repeat next year.

Stuff

Moana Chief – media release from Pacifica

Pacifica are proud to announce that our new vessel Moana Chief, sailed into Auckland this week on her delivery voyage to begin a new life dedicated to the NZ coast.
We plan to phase her into service this week commencing with voyage 4132 departing Auckland Friday 20 September which will coincide with the departure of Spirit of Canterbury.
The Moana Chief brings over 50% greater capacity than SPOC (1700 teu Vs 1100 teu) and will operate on the same fixed day weekly schedule ;
rotating Auckland →Lyttleton →Nelson →Tauranga .
Pacifica’s introduction of additional capacity is a significant investment and commitment from our parent company Swire , and is a response to the growing demand for reliable access to the “Blue Highway” connecting key North & South Island ports .


As N.Z’s only dedicated weekly coastal carrier Pacifica are uniquely placed to offer a sustainable year-round solution for your wharf/wharf or door/door FCL shipments.
We also take this opportunity to pay tribute to the mighty SPOC for years of dependable service ; she never missed a beat during the hundreds of voyages around N.Z and we wish her continued smooth sailings in her next deployment.

Port of Tauranga partners with Waikato-Tainui owned Ruakura inland port

Tainui Holdings Group CEO Chris Joblin said the agreement with Port of Tauranga is a key step.
TOM LEE/STUFFTainui Holdings Group CEO Chris Joblin said the agreement with Port of Tauranga is a key step.

Developers of the Ruakura inland port in Hamilton have taken a big step forward by signing a 30-year partnership with the Port of Tauranga.

Port of Tauranga and the Tainui Group Holdings subsidiary, Port Ruakura LP, announced the agreement on Thursday.

Cargo shipped by a rail between Auckland and Tauranga will be handled at Ruakura and will meet the future needs of the company, Port of Tauranga chief executive Mark Cairns said.

An artist's impression of the full Ruakura Inland Port development.
SUPPLIEDAn artist’s impression of the full Ruakura Inland Port development.

“The Ruakura development will provide a highly efficient rail hub in the Waikato by utilising our existing train services linking our MetroPort Auckland inland freight hub with Port of Tauranga.”

Port of Tauranga will have priority rail slots at the Ruakura facility with Port Ruakura LP providing the infrastructure including a rail siding, hardstand and cargo storage.

Waikato-based importers and exporters will have direct access to international shipping services at Tauranga.

The 480-hectare Ruakura estate has 192 hectares earmarked for logistics and industrial uses and the planned 30 hectare inland port.

Tainui Group Holdings chief executive Chris Joblin said the initial 30-year agreement is a key step toward unlocking the economic golden triangle of Auckland, Hamilton and Tauranga for importers and exporters.

“The agreement will see Port of Tauranga trains initially call at Ruakura four times daily and this is likely to grow,” Joblin said. “This service will underpin the significant supply chain savings we have been modelling with prospective customers and tenants of Ruakura.”

About half of all freight volumes in New Zealand occur in the golden triangle and container volumes are forecast to grow 60 per cent by 2042. Tauranga handles the biggest container ships to visit New Zealand. 

KiwiRail operates up to 86 trains per week between MetroPort Auckland and Tauranga, hauling up to 9000 twenty-foot equivalent units and the route has unused capacity.

KiwiRail CEO Greg Miller says the upper North Island is a key growth region for KiwiRail and the country.

“This is another example of the supply chain collaborating with KiwiRail to design and deliver rail infrastructure to better connect New Zealand,” Miller said.

Development of the Ruakura Inland Port is scheduled after the completion of the Hamilton section of the Waikato Expressway in 2021.

Stuff

Pacifica Shipping to upgrade with larger vessel

Wednesday, 7 August 2019, 8:29 pm
Press Release: Swire Shipping

Increased tonnage to meet rising coastal and international transhipment demand

New Zealand – Pacifica Shipping today confirmed that it has acquired a larger 1700 teu vessel for deployment on its premium coastal shipping service in New Zealand. The MV Moana Chief – which is expected to commence operations formally in September 2019 – will meet growing domestic and international transhipping cargo demand. Pacifica was acquired by The China Navigation Company (CNCo) – parent of Swire Shipping – in 2014.

Swire has been a long-term and active participant in New Zealand’s maritime and transport industry. The first Swire vessel called to New Zealand some 130 years ago. Today, Swire Shipping and Swire Bulk currently operate multiple liner and bulk vessels per month, connecting New Zealand to Australia, Asia, North America, Papua New Guinea, Pacific Islands and the rest of the world. For more information, please visit https://www.swirecnco.com

Brodie Stevens, Country Manager, Swire New Zealand, said: “With the acquisition and an increase in tonnage from 1,100 to 1,700 teu, we strongly believe Pacifica will be in a good position to meet rising domestic cargo and transhipment demand. We want to expand the range of valuable domestic transport solutions currently already provided by Pacifica, and this will enable us to do so. Coastal shipping in New Zealand continues to play an important part in the country’s domestic economy. It is also highly complementary with road and rail networks.”

According to a report by Deloitte in 2016, 236 million tonnes of freight are moved within New Zealand annually. The size of container ships has been increasing. Coastal shipping will continue to play a role in reducing greenhouse gas emissions per container, and will also be a factor in New Zealand manufacturers’ decarbonisation of their supply chains.

Additionally, New Zealand’s domestic freight volumes are forecast to more than double by 2040, as stated in The National Freight Demand Study 2008, and confirmed again in the NFDS update, completed in 2014 – “Even with massive investment in land transport this increase could not be accommodated by road and rail alone. By growing coastal shipping, New Zealand can take a load off the other transport modes and contribute to a more efficient land transport network. By comparison, in Japan, a country with a similar geography, more than 30% of freight is carried by sea.”

Details of the acquisition are confidential.

Wild weather hits the south with 120kmh wind gusts and heavy rain

South Port and Bluff harbour during gale force winds on Wednesday where shipping containers have been blown into the water.
JOHN HAWKINSSouth Port and Bluff harbour during gale force winds on Wednesday where shipping containers have been blown into the water.

Shipping containers have been blown into the Bluff harbour as severe weather hits Southland.

A stevedore said several 40ft containers, which were in a stack of five high, had blown over, some falling into the water.

It is believed about 10 were in the water.

It's another rainy day in Invercargill.
KAVINDA HERATHIt’s another rainy day in Invercargill.

The containers were empty and tug boats in the water were out securing them.

“It’s very rare.”

The stevedore expected the containers to eventually sink and then be pulled out by a crane.

South Port chief executive Nigel Gear said the “current situation is that, due to particularly strong winds, some containers have been dislodged from the stack and have landed both in the yard and also into the berth area”.

“The container terminal therefore has been closed down for safety reasons (standard practice) and we are currently working through the process of securing the containers that have fallen into the berth.

“We will continue to monitor the situation, especially the wind conditions, over the next 24 hours.”

Up the road, Invercargill is the windiest place in the country at the moment, being hit by forceful 120kmh westerly wind gusts and persistent rain.

There are power outages throughout the region with some businesses closing early because of no power. 

Air New Zealand flights both arriving and departing the city had been delayed. 

Severe weather warnings and watches have been issued for severe westerly quarter gales with the Canterbury High Country and coastal Clutha, Southland and Stewart Island most at risk.

Metservice data showed just over 4mm of rain had fallen in Invercargill so far on Wednesday.

Fourteen millimetres of rain was forecast for the day.

Wind watches and warnings are expected to ease on Wednesday night. However, the strong winds were forecast to continue, not dropping below 30kmh until 6pm Thursday.

Metservice forecast 22mm of rain to fall on Thursday as well.

Several places throughout the country recorded gusts over 100kmh on Tuesday.

Stewart Island saw the biggest gust with 148kmh, while Castlepoint saw 119kmh. Both Remutaka Hill near Wellington and Swampy Summit near Dunedin saw gusts of 113kmh.

A road snowfall warning has been issued for the Crown Range Rd and the Milford Rd. 

Snow showers are expected to affect higher parts of the Crown Range Rd between midday and 6pm on Thursday, when 1cm or less of snow may settle on
the road above 900 metres. 

Snow showers were expected to affect the summit of the Milford Road between 10pm on Wednesday and 6am on Thursday, when 1 or 2cm of snow may settle. 

Loss of Auckland ports could cost ratepayers extra 4 per cent a year

The location of Ports of Auckland has prompted public debate about whether there are better alternative uses for the prime waterfront land. Photo / Jason Oxenham
The location of Ports of Auckland has prompted public debate about whether there are better alternative uses for the prime waterfront land. Photo / Jason Oxenham

By: Natalie AkoorieNZ Herald reporter based in Hamiltonnatalie.akoorie@nzherald.co.nz@NatalieAkoorie

Moving some or all of Auckland’s port out of the city and revitalising Northland’s port including building a rail line between the two are some of the options canvassed in a new report.

However, Auckland Mayor Phil Goff has warned against the potential loss of income from Ports of Auckland if it were moved or downsized, saying if the annual $50 million dividend was lost it could lead to a 4 per cent rate rise.

The first of three progress reports by a working group tasked with investigating New Zealand’s upper North Island supply chain strategy outlines key information about the country’s three main ports: Ports of Auckland on the city’s waterfront, Northport at Marsden Point near Whāngārei and Port of Tauranga.

The ports are critical to New Zealand’s freight task and together account for half of the country’s total export volume and two-thirds of its import volume, in tonnes.

Port of Tauranga handled the highest volume of all New Zealand ports (in tonnes) and was the most successful of the three upper North Island ports having capitalised on rail infrastructure provided to the Bay of Plenty region by the Government.

“We will therefore be considering whether similar investment in Northland would provide similar results for the region and Northport,” the working group said.

The report, released by Associate Minister of Transport Shane Jones, noted that overall imports are expected to increase across all upper North Island regions while exports will increase initially before declining at Northport and Port of Tauranga, largely because of projected decline in log exports.

Northport from the air with the Marsden Point Oil Refinery in the background. Photo / Supplied
Northport from the air with the Marsden Point Oil Refinery in the background. Photo / Supplied

However, it said roading and rail in the Northland region was so lacking that the working group “fundamentally believe there is no point making further investment in Northport without investment and development of the train line to Auckland”.

“… it is generally agreed that the lack of rail infrastructure and connectivity to Northport has hindered Northland’s economic development.”

Ports of Auckland occupied 77ha of Auckland waterfront with a book value of $735m, though this was thought to be well below valuation of comparable industrial land.

“This excludes the massive social, cultural, environmental and economic value that would be created by transforming this property into a globally iconic waterfront,” the working group said.

Stakeholders including the ports, shareholders and the road freight and shipping industries named several issues surrounding the current port system including:

• They are competing and not co-operating;

• Lack of rail infrastructure and port connectivity had been a brake on Northland’s economic development;

• Unanimous support for a fully functioning rail system to the ports;

• Concerns over duplication of port and inland port assets;

• Congestion was the main problem for freight operators.

Options to make the three ports work better included the Northland to Auckland rail spur, a second route between Auckland and Tauranga, a freight corridor through West Auckland, a West Auckland inland port, an expanded or moved Southdown inland port, a new mega port in the Firth of Thames, a vehicle servicing and import facility at Northport and a New Zealand dry dock.

Goff welcomed the report but said it did not present an analysis of options, the business case for each and the impact of each option on Auckland, the region and the country.

“The relocation of the Port out of Auckland’s city centre has some clear advantages.

“It would ultimately open up 77 hectares of central city and harbourside land and wharves for alternative and potentially more valuable uses.

“As in other international cities, it could enhance the attractiveness of Auckland as a place to live, work, enjoy and to visit. It would also reduce congestion caused by freight movement and pollution from associated activities.”

A cruise ship docking at the Port of Tauranga. The port is the most successful for freight volumes in the country which many put down to a rail link. Photo / Alan Gibson
A cruise ship docking at the Port of Tauranga. The port is the most successful for freight volumes in the country which many put down to a rail link. Photo / Alan Gibson

However, he said as a city of 1.7 million people making up 35 per cent of New Zealand’s population, Auckland needed to have the most cost-effective and efficient way of delivering goods and services to its people.

“Vital to the decision of moving Auckland’s port is the impact of each alternative location on Auckland consumers and businesses.”

Aucklanders needed to know whether and how much alternative port sites added to costs for the city, Goff said.

“We also need to ensure that the working group on the supply chain strategy considers the value of the investment Aucklanders have made in their port and the dividend return they get from it which in past years has been $50 million – equivalent to a 3 to 4 per cent rate increase if that dividend is lost.”

Port of Tauranga chief executive Mark Cairns said the progress report identified well-known issues such as the need for increased investment in road and rail networks and the historic financial under-performance and inconsistent reporting by some ports.

He said Port of Tauranga challenged some of the “facts, assumptions and implications” in the interim report, and were hopeful they will be addressed before the next report.

“For example, the report states that the Bay of Plenty and Waikato have benefitted from rail infrastructure and investment provided by the Government at no capital cost to the end user.

“This ignores the $267 million in rail costs paid by Port of Tauranga since 2010.”

National’s Transport spokesman Paul Goldsmith claimed the interim report showed a “thinly disguised preference for massive investment in rail between South Auckland and Northport, leading to a shift of activity away from the Ports of Auckland to Northport”.

“It also seems to be peddling the concept of a nationalised ports monopoly in the upper North Island. There is no evidence or analysis to back up the suggestion that such a nationalised monopoly would be more efficient than current arrangements.

“There is no evidence to suggest the billions it would cost to upgrade rail from Auckland to Whangarei, plus building a new spur to Marsden point and a new freight line across Auckland, would be the best use of scarce transport resources and would lead to a better outcome for exporters or consumers.”

Goldsmith said the Government was “quite right” to be inquiring into the efficiency of freight movements across the NOrth Island and planning for the long term future.

“We support careful and considered planning of future investment. Which is why National has supported the Government’s planned Infrastructure Commission to advise on such things. The direction of this report, however, undermines the Infrastructure Commission approach.”

A second report outlining advantages to changing from the status quo, international comparisons and a long-term view will be presented to Cabinet in June.

The final report with recommendations for future development and strategy will be presented to Cabinet in September.

Upper North Island ports by the numbers

Northport

• Exported 3.25 million revenue tonnes in one year, mostly logs as well as kiwifruit, steel and woodchip;

• Imported considerably lower amount of 311,000 tonnes to June 2018.

Port of Tauranga

• Accounted for 43 per cent of New Zealand’s total export volume in year to June 2018;

• 55 per cent of exports are wood and paper products, majority of which are logs.

Ports of Auckland

• Second largest container port after Tauranga, Ports of Auckland is significant for imports because of the population it serves – 35 per cent of New Zealand’s population.

• Largest importer of vehicles. In year to June 2018, Ports of Auckland handled almost 300,000 cars, a 43 per cent increase from 2014.

• Ports of Auckland and Port of Tauranga have an import-export imbalance – Auckland has higher imports and Tauranga higher exports. It means about 40 per cent of 20-foot containers stand empty.

Shareholders would solve Ports of Auckland’s problems

New cranes at Ports of Auckland. Photo / Jason Oxenham
New cranes at Ports of Auckland. Photo / Jason Oxenham

NZ Herald Editorial

COMMENT:

Of all the policies the NZ First Party brought into this coalition Government, the wildest and wackiest was to move the entire port of Auckland to Marsden Pt. The Labour Party agreed only to commission a feasibility study the idea of moving the port and left open the choice of alternative sites. Winston Peters, hoping to hold the Northland seat, promised to move the whole operation to Northport, but the coalition agreement merely directed Northport be given “serious consideration”.

The feasibility study led by former Far North District mayor Wayne Brown is reported to have produced an interim report for the Government and its tentative suggestions ought to be interesting. The fact that ministers will receive at the same time a report on upgrading the railway from Auckland the Marsden Pt suggests Northport is the preferred alternative for at least some of Auckland’s imports.

Doubtless there are countless ways that goods shipped to or from New Zealand could be better shared between various ports, not only for more efficient handling and distribution but also to stop the Auckland port encroaching ever further on the Waitematā harbour.

Doubtless too, the companies running ports would quickly find a more efficient use of them — within the constraints on Auckland — if Ports of Auckland Ltd had commercial shareholders.

Its nearest rivals, Port of Tauranga and Northport, are majority owned by their local bodies but also have tradeable shares which has resulted in a degree of cross-ownership. Tauranga has a stake in Northport, as does Ports of Auckland Ltd. But PoAL is entirely owned by the Auckland Council which has been averse to any of its business going to other ports.

Total public ownership has been a mixed blessing for Auckland citizens. While the council collects all the port’s dividends it suffers a conflict of interest when Aucklanders oppose the port’s further expansion. Despite a long campaign to stop the port company extending wharves for the latest cruise ships, the council is allowing moored “dolphins” and walkways to extend Queens Wharf.

Mayor Phil Goff did not exactly welcome news this week that an interim report of the feasibility study has arrived on ministers’ desks. “Any decisions on the future of Ports of Auckland should have the agreement of the council,” he said. “We accept that at some point the growth of freight into Auckland will outgrow the land available…..” Citizens opposed to further harbour reclamation would say that point was reached some time ago. Goff said the same when he stood for election.

“However, the port is also a critical lifeline of freight into our city,” he says now. No it is not. Freight from any other port could reach Auckland, making room for cruise ships within Auckland port’s existing harbour footprint.

Most of Auckland’s port is unlikely to be going anywhere. The feasibility study should be looking at rationalising the use of all New Zealand Ports but it should not suppose politicians can best decide where freight goes. The Hawke’s Bay Regional Council is planning to partially float its port at Napier. If the Auckland Council did likewise it would see the city’s interests more clearly.

Ports of Auckland goes driverless to boost container numbers

In the high-tech equivalent of “look Mum, no hands,” Ports of Auckland’s new 70-tonne straddle carriers will hurtle around at up to 22km/h, without anyone at the controls.

This Luddite’s nightmare means no human contact with the container from the time the truck driver unscrews his twist locks to just before it is hoisted by crane and deposited on a ship. For imports, it will be the same process, only in reverse.

As the port sees it, public opinion is against expansion through further reclamation, so the only way to improve productivity is through technology.

The system is now being tested, with empty containers stacked high to act as a barrier in case something goes wrong.

And something going wrong doesn’t really bear thinking about: fully laden, the port’s new carriers weigh in at 100 tonnes – not easy to stop in a hurry.

When the project is complete, the port’s 27 new blue carriers will be involved in an elaborate dance to get containers on and off ships, with the process controlled by software at head office.

“It feels funny when you see this giant machine coming straight towards you,” says the port’s automation project manager, Ross Clarke.

The Auckland Council-owned port is under pressure from New Zealand First to relocate to Whangārei, and the Government is conducting a comprehensive upper North Island logistics and freight review to ensure New Zealand’s supply chain is fit for purpose in the longer term.

The review will guide the development and delivery of a freight and logistics strategy for the upper North Island. This includes a feasibility study to explore moving the location of Ports of Auckland, with consideration to be given to Northport.

Clarke says the new straddle carrier technology, alongside the port’s three new cranes that arrived last year from China, is seen as a game changer.Can we resuscitate our struggling sharemarket?

Automation will increase its terminal capacity from just over 900,000 TEU (20-foot equivalent units) a year to 1.6-1.7 million, the port says.

Auckland will be the first New Zealand port to partially automate its container terminal.

At the same time, the port says the straddle carriers will save as much as 10 per cent on fuel use. There should also be less impact on neighbouring communities as they will require less light and will not make as much noise as conventional, manned carriers.

The new Konecrane carriers will deliver more capacity because they can stack four containers compared to just three for the existing carriers. This, combined with changes to the terminal layout and past reclamation work, is expected to increase capacity by 80 per cent.

They come with a positioning system called Locator – a type of ground-based GPS that boasts an accuracy of plus or minus 3cm.

Clarke says that given its constrained area, something had to be done to grow the port.

Auckland's new automated straddle carriers can stack containers four high. Photo / Leon Menzies
Auckland’s new automated straddle carriers can stack containers four high. Photo / Leon Menzies

“If we didn’t do something to increase that capacity then the business’s throughput, and therefore revenue and profit, would be capped.

“We can’t expand the footprint of the terminal – the public have been clear about that,” he says.

“Dwell times” – the time it takes for exports inside terminal gates to be loaded onto a ship and imports onto a truck or train – are already low by world standards.

“So the only other avenue to increase the storage capacity is to stack more densely and we are going up with automated machines.”

Automation means stevedoring roles will go, but Clarke says the number of jobs lost is likely to be less than the original estimate of 50.

“The chances are that with the new cranes, and the increased throughput, the reduction in jobs might not be that much at all,” he says.

“Implementing automation helps fund the investment in the new technology. Reducing jobs was never the ambition – it’s just an outcome.”

Clarke says the port has trouble recruiting enough staff to deal with current demand, and there are vacancies it can’t fill.

“With the business growing, and the number of unfilled jobs that we have at the moment, the actual level of redundancies might be quite small.”

The high-tech carriers will initially work with the port’s new, $60 million, 82.3m high cranes which weigh in at 2100 tonnes apiece, against 1200 and 1300 tonnes for the older cranes.

The port says that with these new cranes, and the new deepwater berth they will sit alongside, the port will be able to handle the biggest ships coming to these shores.

They can lift four containers at once, weighing up to 130 tonnes combined, a New Zealand first. The current cranes can lift two containers, weighing up to 65 tonnes.

The new cranes can service ships carrying more than 11,000 TEU, which the port expects will offer some “future-proofing” against increases in the size of ships.

Ports of Auckland is only the second port in the world to automate as a “brownfields” development – most automated ports are built from scratch.

Clarke says maintaining the port’s day-to-day operations while the project is underway has been a big challenge.

Initially the northern third of the terminal – where the new cranes are – will be automated while the southern part will continue with manned straddle carriers.

Once it is satisfied that the technology is working to plan, the port company will complete the rollout for the rest of the terminal.

The first stage goes live in February next year, followed by the second stage in April.

Clarke says that by the middle of 2020, the port should have a fully operational automated container terminal.

NZ Herald