Port of Tauranga CEO Mark Cairns to retire

Port of Tauranga chief executive Mark Cairns. Photo / George Novak
Port of Tauranga chief executive Mark Cairns. Photo / George Novak

By: Andrea FoxHerald business writerandrea.fox@nzme.co.nz

Port of Tauranga chief executive Mark Cairns will retire in June next year.

He will be succeeded by the listed company’s chief operating officer Leonard Sampson.

Cairns, 58, will step aside after more than 15 years heading New Zealand’s largest port, during which time its market capitalisation increased more than seven times, by $4.4 billion, to $5.1b today.

Chairman David Pilkington said under Cairns’ leadership, the port company had grown from a regional bulk export port to New Zealand’s international cargo hub and one of its most successful listed companies.

During his time in the job the average compounding total shareholder return had been 19 per cent per year.

When Cairns became chief executive in 2005, the port handled 12.6 million tonnes of cargo and 438,214 containers a year.

In the year to June this year, those tallies had swelled to 24.8m tonnes of cargo and 1.25m containers.

Cairns said the next stage of his career would be in governance.

Craigs Investment Partners head of private wealth research Mark Lister said he was confident Cairns would be in demand as a director.

“Mark has done a great job, and under his command Port of Tauranga has grown significantly, been an industry leader across the board, and delivered excellent returns to shareholders.

“He will be missed, and as is the case whenever a strong CEO chooses to hang up their boots, the focus will be on the company to see if it can continue to deliver in his absence.

“It will certainly be the end of an era, but Mark is still fairly young and enthusiastic, as well as being very capable, so I’m sure he will have no shortage of offers on the governance front,” Lister said.
Jarden managing director, head of research Arie Dekker said Cairns oversaw a period in which investors had seen material capital appreciation.

“The strategy and execution under Mark’s leadership has seen Port of Tauranga materially outpace its competitors.

“Highlights include strategic investments into MetroPort and Timaru and the Kotahi deal – these have helped underpin Tauranga as New Zealand’s leading port.”

Chief executive-designate Sampson was appointed chief operating officer a year ago after six years as the port’s commercial manager. Previously he was general manager sales at KiwiRail.

Pilkington said the company’s success had delivered wide-ranging benefits to the Bay of Plenty region. Local ratepayers own just over half of Port of Tauranga’s shares through regional council entity Quayside Holdings.

A highlight of Cairns’ time as chief executive is considered to be the port’s ambitious play to become the only New Zealand port able to accommodate the world’s biggest cargo ships. This was via a six-year, $350m capital expansion programme intended to cement its future as the country’s premier freight gateway and hub and feeder port.

In an interview with the Herald in 2018, Cairns recalled the analysis had been gruelling and the commercial risk high.

“For a company of our size with a $2.5 billion market cap at the time, to embark on a $350 million capital expansion programme was a big commercial risk.

“We had to back ourselves to attract that cargo. It was a lot of money and the board put a lot of commercial tension around it.”

In late 2016, following dredging to deepen and widen the port’s shipping channels, major landside operational change to handle the anticipated big increase in cargo, and the securing of long term customer contracts to drive container volumes, the first of the big ships tied up at Tauranga – the only port able to accommodate them on international services.

The strategy paid off. In the 2019 financial year the port company cracked $100 million profit for the first time.

Napier-born Cairns, who has a civil engineering degree with first class honours and master of management and business studies degrees, was previously chief executive at Toll Owens and at Owens Cargo.

“The time feels right to hand over to the next generation to continue the Port of Tauranga’s success into the future,” he said.

“Port of Tauranga is in excellent shape. I’m incredibly proud of our people and the positive outcomes we have achieved for our customers and our community.”

Covid 19 coronavirus: Auckland and Tauranga port communities caught in mass Covid-19 test order

Ports of Auckland Covid-19 test station has tested more than 1000 people. Photo / File
Ports of Auckland Covid-19 test station has tested more than 1000 people. Photo / File

By: Andrea Fox Herald business writer andrea.fox@nzme.co.nz

The logistics skills of the busy ports of Auckland and Tauranga are being showcased to the max as they respond to out-of-the-blue and fast-changing Ministry of Health directives to ensure urgent Covid-19 testing of all their users and staff.

Both ports say the latest, much expanded, directive, issued on Saturday just hours after director general of health Ashley Bloomfield surprised the sector with an urgent testing order, will affect about 6000 people at each port – but they expect little disruption to operations.

However the Road Transport Forum says the Government’s “panicked reaction” to try to find if freight is the source of the return of Covid-19’s community transmission, is causing “mayhem” at the ports for trucking operators.

On Friday with no warning, Bloomfield ordered “everyone who works at the maritime border” to be tested by 11.59pm on Monday night. Testing applied for all people who worked at ports around New Zealand who might come into contact with ships’ crew.

With testing facilities reportedly scarce or stretched even this was a tall order, but Saturday’s order widened the test requirement to anyone who had worked at Auckland or Tauranga ports since 11.59pm on Tuesday July 21. According to spokespeople for the two ports, collectively that involves about 12,000 people.

Those having to be tested included shipping agents, stevedores, cargo drivers, contractors, suppliers of goods and services, government agency employees and any crew members who may have come ashore.

The ports were to work with their local DHBs and take all practical steps to ensure their constituents were aware of the order. People could be tested at a community testing centre or at a testing centre set up at the port.

Auckland’s port has had a testing facility waterside since Thursday. A spokesman said around 1000 people had been tested over three days.

A Port of Tauranga spokeswoman said the port had set up a testing site for the DHB, but as at Sunday evening there were no DHB testers yet on site.

She said as it was surveillance testing, people without symptoms were not required to wait until they had test results before returning to work.

“Work groups are separated at the moment due to Covid-19 precautions so it would be highly unlikely that any infection would spread far,” she said.

A Maritime NZ notice said a message about the broader testing requirement had been sent to all port companies, stevedoring companies, unions, harbourmasters, agents, organisations representing the marine industry, fishing operators and maritime operators.

The Ports of Auckland spokesman said it was important to note that port workers never directly touched freight, which was handled remotely or by machines. Containers were never opened at the port by workers. The port had had Covid-19 security and restrictions in place since late January, he said.


“Work groups are separated at the moment due to Covid-19 precautions so it would be highly unlikely that any infection would spread far,” a port spokeswoman said.

Disabled Bulker Towed to Dock in Tauranga

disabled bulker towed to the dock in New Zealand
Funing under tow – courtesy Maritime New Zealand

The Singapore-flagged bulker Funing has been brought safely alongside at the Port of Tauranga on the north island of New Zealand. The vessel experienced a power failure while in the main shipping channel and for a time threatened navigation to New Zealand’s largest port.

The 40,000 DWT bulk carrier was departing New Zealand bound for China with a load of timber on July 6 when it lost engine power at approximately 12:30 am local time while in the main shipping channel. There was a pilot aboard at the time but Maritime New Zealand reported that the weather conditions were considered poor with a 30 knot wind and significant swell.

After losing power the Funing was unable to steer and began drifting due to the high winds and tides in the area. The vessel snagged the chains holding one of the buoys marking the shipping channel. The tides and currents then pushed the Funing across the channel before the ship was able to anchor and hold position.

At the time of the incident, there were 20 crew members aboard. None of the crew was injured and Maritime New Zealand said that there were no reports of oil or other pollution from the vessel.

Funing disabled at anchorage – courtesy Maritime New Zealand

New Zealand dispatched two tugs to the vessel’s assistance and they were later able to tow the Funing to deeper water and a safe anchorage. An inspection of the propeller and rudder was conducted by divers because it was believed that the vessel had made contact with a marker buoy at the harbor entrance. 

After having remained at anchorage for the past week, the offshore tug Pacific Runner arrived in Tauranga to assist the Funing. They completed a towage trial this morning and later in the day towed the vessel to the dock in Tauranga

A further investigation of the incident will be conducted. Repairs are also commencing and expected to last up to 14 days before the Funing can resume its voyage to China.

Stranded Tauranga ship: Two investigations launched after engine failure

Mauao walkers could see the ship anchored at sunrise. Photo / Trent Sunderland
Mauao walkers could see the ship anchored at sunrise. Photo / Trent Sunderland

Bay of Plenty Times

Dual investigations have been launched after a log carrier’s engine failed at the entrance to Port of Tauranga this morning.

The Singaporean-registered log carrier, Funing-9690913, was bound for China when it lost power at the entrance to the Port of Tauranga about 12.30am.

Without power, it could not steer and drifted to the edge of the channel at the base of Mauao. It is believed to have snagged a marker buoy.

About 20 crew members were on board and there were no reported injuries.

The ship was towed away and is now anchored in deep water outside Tauranga Harbour.

The Funing will not return to port until authorities give permission and its propeller and rudder must be inspected by divers.

The ship’s hull is understood to be intact and there was no pollution.

The Transport Accident Investigation Commission and Maritime New Zealand are investigating the incident.

The commission’s investigation will focus on the causes and circumstances of the incident and the Maritime NZ investigation will focus on whether the rules were followed correctly.

Maritime New Zealand’s deputy director of safety response systems, Nigel Clifford, said the vessel would be able to continue on to China, if it is “safe to sail without repairs”.

“If the vessel requires repairs a repair plan will be established by the owners. Authorities would overview any such proposals.”

Commission spokesman Simon Pleasants said a team of three investigators left Wellington for Tauranga mid-morning.

He was not sure whether they would board the ship this afternoon as the interviews could take some time and, for safety reasons, they would not want to be disembarking at night.

A Port of Tauranga spokeswoman said the ship was being piloted out of the harbour “as normal” when the engine failure happened.

“A second pilot was transferred on to the vessel several hours after … to relieve/assist the first pilot.” Both pilots had since been taken off the ship.

Tug boats were also requested to help the vessel.

“Our marine teams did an amazing job in keeping the stricken vessel steady and then towing it to safety.”

“The wind and swell was challenging for all vessels involved but the conditions eased throughout the morning,” she said.

The view of the anchored ship from Mauao. Photo / Trent Sunderland
The view of the anchored ship from Mauao. Photo / Trent Sunderland

The engine failure delayed the arrival of one container ship and one log ship, but there were no long-term impacts from the incident.

“We frequently deal with shipping delays and changes due to weather and other operational reasons.”

There was a 30-knot wind and significant swell when the engine failed.

High tide was at 7.40am.

The Mauao Base Track was closed as a precaution on request from the Harbourmaster but was reopened by midday.

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 signs 30 year train agreement

Port of Tauranga Chief Executive, Mark Cairns, left, and Tainui Group Holdings Chief Executive, Chris Joblin, right.

Port of Tauranga and the TGH-subsidiary Port Ruakura LP today announced a long term partnership to support the development of the planned Ruakura Inland Port at Hamilton. 

The agreement allows Port of Tauranga’s cargo trains running between MetroPort Auckland and Tauranga to service Ruakura Inland Port, giving Waikato-based importers and exporters direct access to fast international shipping services calling at Tauranga.

Tauranga is the only port call for the biggest container ships visiting New Zealand.

Port of Tauranga chief executive Mark Cairns says the planned Ruakura Inland Port offers significant cargo handling capacity and scope to meet future needs.

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

“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, which is New Zealand’s international hub port and the main cargo gateway for the upper North Island,” he says. 

“It’s an excellent example of Port of Tauranga’s partnership approach to providing supply chain infrastructure beyond our Bay of Plenty hinterland.” 

Tainui Group Holdings Chief Executive Chris Joblin welcomed the long-term partnership on behalf of Port Ruakura LP. 

“This initial 30-year agreement with Port of Tauranga is a key step towards fulfilling our vision for Ruakura to unlock the golden triangle of Auckland, Hamilton and Tauranga for importers and exporters,” he says. 

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

The golden triangle already accounts for around half of all freight volumes in New Zealand and container volumes are forecast to grow 60 per cent in container volumes by 2042.

Port of Tauranga’s partner KiwiRail operates up to 86 trains per week between MetroPort Auckland and Tauranga, carrying up to 9000 TEUs (twenty-foot equivalent units).

The route currently has unused capacity and the additional service stop will improve utilisation and reduce the number of trucks on roads.

The agreement provides Port of Tauranga with priority rail slots at the Ruakura facility for an initial term of 30 years.

Port Ruakura LP will provide the necessary infrastructure, including a rail siding, hardstand and cargo storage areas. 

Development of the Ruakura Inland Port is scheduled to follow the completion of an adjacent Hamilton section of the Waikato Expressway currently expected to be late 2021. 

KiwiRail CEO Greg Miller says the Upper North Island is a key growth region for KiwiRail and New Zealand. 

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

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.

Rail-centric view does Northland no favours

“The Upper North Island Supply Chain Study has focussed solely on rail and this does Northland no favours,” says Annabel Young, Executive Director of the NZ Shipping Federation, talking about the Interim Progress Report of the study group. “Their rail-centric view has blinded them to the opportunities available to Northport that are not dependent on rail.”

A dry dock in Whangarei would be a win-win for both the city and New Zealand as a whole; but in the interim report it gets a scant one-line mention. The lack of a dry dock is hurting this country due to the environmental and financial costs that have to be incurred when our coastal shipping operators are required to dry dock their vessels off-shore in Singapore or Australia. There are already cases where overseas ships are avoiding New Zealand due to the toxic combination of high biosecurity cleanliness requirements for a vessels hull and secondly, the inability to clean a ship in a dock that does not fit in the Devonport dry dock.

We note that the interim study assumes that cargo landed in Northport would need to be moved by rail which ignores the obvious possibility of movement by sea, as is done now in many other parts of the world using smaller domestic coastal ships and barges.

This first report sets up a paradigm where rail is deemed to be the only answer. The Federation believes it may be asking the wrong questions.

Notes

The New Zealand Shipping Federation began in 1906 and is the key representative body for New Zealand’s coastal ship operators.

West Auckland ‘inland port’ among new transport options

NorthPort today. Photo / File.
NorthPort today. Photo / File.

BusinessDesk By: Gavin Evans

An inland port in west Auckland and a vehicle importing and servicing centre at Northport are among a dozen potential transport investments a working group is considering to improve freight handling in the upper North Island.

The group, formed last year, has spent the past eight months talking with users and imagining how the existing ports at Auckland, Marsden Point and Tauranga – and the road and rail links between them – could be reconfigured to provide the best options for long-term growth.

It plans to report back to the government in June with options and complete more detailed costings and recommendations in September.

“There are a large number of infrastructure options that may have a part or full place to play in changes to the upper North Island supply chain which will be considered,” chair Wayne Brown says in a progress report filed with Cabinet’s Economic Development Committee earlier this month.

“For example, in evaluating one of our options that involves moving some of Ports of Auckland’s freight task to Northport, we will consider potential infrastructure that may be required to support this,” the group says.

They include: “a spur to Northport, which we understand the current government is investigating; upgrades to the existing North Auckland Line; potential short-term operational changes, such as moving freight through Auckland on the commuter network at night; potential long-term new infrastructure requirements such as a new rail line out west of Auckland to avoid congestion in the Auckland public transport rail network and connect through to the current inland freight terminals; and the potential establishment of new inland freight terminals.”

The Upper North Island Supply Chain study was the result of a pre-election pledge by NZ First to move container operation from Ports of Auckland to Northport by 2027.

While there is broad consensus that Auckland’s port will be increasingly constrained by the city’s development around it, there is no agreement as to how soon change is needed, how much freight could be redirected through Tauranga or Northport, and how that would be achieved.

As recently as 2016 a study group recommended work start assessing Manukau Harbour or the Firth of Thames as long-term replacement options for Auckland. Last August, Port of Tauranga chief executive Mark Cairns said there wasn’t yet sufficient freight volume in Northland to warrant the relocation north. Port of Tauranga owns half of Northport.

Auckland and Tauranga are the country’s two largest container ports. With Northport, they handle about half the country’s exports and two-thirds of its import volumes.

Tauranga and Auckland, controlled by Bay of Plenty Regional Council and Auckland Council respectively, compete for freight. They considered a merger in 2006 but talks collapsed the following year. Ports of Auckland has a 20 percent stake in Northland Regional Council-controlled Marsden Maritime Holdings, Tauranga’s partner in Northport.

The working group noted submitters’ views that the “interwoven” nature of the three ports’ ownership had prevented them being developed in New Zealand’s best interests and had resulted in some inefficiencies and “duplication” of resources.

“We will be considering the current ownership structure of ports and whether a change may be needed to ensure interests are aligned to deliver the best outcome for New Zealand,” the group says.

“Councils were somewhat open to a change in port ownership as long as they preserved their income and value of the port to their community.”

Ports are long-term businesses. The working group is canvassing issues in 10-, 25- and 50-year timeframes.

Scope is also important. Freight operators argue Northport, west of the Marsden Point oil refinery, could meet growth on Auckland’s North Shore, rather than replacing Ports of Auckland entirely.

Short-term options could include establishing a distribution centre at Silverdale or Orewa; imports and Northland products could be trucked there overnight – avoiding congestion on SH1 – for day-time delivery into Auckland.

Northport already plays a similar role. Structural components for some major Auckland building projects are stored there for just-in-time delivery to avoid congestion in the CBD.

Car imports have already been identified as a potential early change. Ten hectares of new space at Northport could provide storage for 10,000 cars. Auckland currently receives about 300,000 cars annually, each of which spends close to three days on its wharves.

Northport started operating in 2002 and is largely a blank canvas. Its 49-hectare footprint can be expanded to 75 ha, while its berth length can be more than doubled to 1,390 metres. The port lies next to 180 ha of commercial and industrial land controlled by shareholder Marsden Maritime.

But it has limited capital for development and no rail link. KiwiRail and the Ministry of Transport are investigating a $200 million, 20-kilometre spur line, but that is probably more than six years away even if there was a prompt decision to proceed.

The existing line from Swanson to Fonterra’s Kauri dairy plant north of Whangarei also needs upgrading at a cost of another $500 million to carry larger and heavier container traffic. KiwiRail has previously estimated the total bill – including upgrading rail capacity from South Auckland – at about $2 billion.

The working group noted its “fundamental” belief that there is “no point making further investment in Northport without investment in, and development of, the train line to Auckland.”