KiwiRail wants its ferry terminal in the central city, without its competitor

September 3, 2020 – Report from RNZ by Catherine Hutton


Plans to build a multi-use ferry terminal in Wellington are in jeopardy, following KiwiRail’s insistence it wants to move into the central city beside rival Bluebridge, but won’t share facilities with them.

An estimated billion-dollar investment for new wharves in both Wellington and Picton is needed to allow KiwiRail to switch its Interislander operation to two new larger rail ferries by 2024.

Two years ago, the Future Ports Forum, comprising representatives from the Wellington Regional Council, the Wellington City Council, Centreport, the Transport Agency, KiwiRail, and Bluebridge was set up to look at where to best situate the capital’s new Cook Strait ferry terminal.

It was agreed the new site would be shared by the Interislander, which KiwiRail owns, and rival Bluebridge.

The latest report from interested stakeholders, released in April, recommended Kaiwharawhara where the Interislander ferries currently dock.

Regional Council (GWRC) chairperson Daran Ponter said KiwiRail left the forum before the final report was released because they did not agree with the location.

“Because they were on the working group they had an understanding of where that report was going to land in terms of its recommendation, they clearly didn’t agree with Kaiwharawhara as the preferred recommendation and they pulled out in advance. Not helpful, but it’s an interesting way of doing business.”

KiwiRail chief executive Greg Miller denied leaving the forum, and said releasing the report did not make sense.

“What you are talking about is, ‘did we agree in the forum?’ and the fact is we didn’t agree in the forum, so we’d said no we don’t think that’s the best outcome and we made that very clear,” Miller said.

“Then you’d have to ask yourself, what was the benefit of the Future Ports Forum that couldn’t agree, when the two customers – Bluebridge and KiwiRail – couldn’t agree with the provider, that’s more the point.”

tructural engineers say the Kaiwharawhara site can be built to cope with earthquakes but geotech scientists are less sure.

Miller said it was the geotech report that made KiwiRail stop and think.

“Is this the best location on the port to put new ferries and a new terminal that is rail served? There’s also the motorway upgrade and the location on the port for future transport, which has always been a challenge at Kaiwharawhara, with road and rail location and for the passengers arriving from overseas and domestically, getting access to the Kaiwharawhara site,” he said.

Estimates for building new ferry terminals in both Picton and Wellington are vague – ranging somewhere between half a billion and a billion dollars.

Miller said the huge costs of having to remediate the site could not be ignored. “You can engineer your way out of many things, but what we’re told by the engineers is that the cost of mitigation is extremely high, so there is a cost component to this that you cannot ignore.”

KiwiRail prefers its new terminal to be at Kings Wharf, beside Bluebridge’s existing spot, and closer to downtown Wellington.

But GWRC chairperson Daran Ponter said while KiwiRail had zeroed in on the seismic issues at Kaiwharawhara, Kings Wharf also had problems.

Ponter said the 2016 Kaikōura earthquake showed how fragile the port was. The port received more than $600 million – the second biggest insurance payout in New Zealand’s history – for the damage suffered in that quake.

“Kings Wharf sits midway between the container terminal and the new BNZ centre, both of which were taken out in the November 2016 Kaikōura earthquake. So it would appear wherever you locate yourself around the Centreport site, you are potentially still open to being challenged by an earthquake.”

And documents suggest the lengths KiwiRail is prepared to go to get the site. An email seen by RNZ from their group general counsel, Jonathan Earl, to KiwRail managers in May raised the possibility of using the Public Works Act to secure it.

Ponter said that would be unprecedented and would effectively mean seizing land from regional ratepayers.

“Clearly KiwiRail are an acquiring authority under the Public Works Act, but Centreport itself is a public works. Because you can’t just use the Public Works Act because you like an option more than you like another. You’ve got to give good grounds for the option or for your preference.”

Miller denied that was an option they were pursuing.

“Well the Public Works Act is there to be used to acquire if we need to, and as I said to you we haven’t put in any time, effort into that because I do believe the relationship commercially long term is better to be resolved that way and that’s the way we’re going.”

Centreport is now preparing a third assessment report for a new site, but Miller said he was not keen to share a facility with Bluebridge at Kings Wharf because KiwiRail needed a single-use terminal.

“We needed a rail link span. We have far greater volumes of trucks and cars and passengers that we move, so we probably needed a greater area and how do you divvy up the cost in a single user terminal for that with a competitor?”

Ponter said regardless of KiwiRail’s preferences, ultimately the port company had to accommodate both operators.

In a statement, Bluebridge said it was aware of KiwiRail’s recent proposal to build another wharf adjacent to its site at Kings Wharf, and had provided feedback.

The report is due in the next two months.

In June, the State Owned Enterprises Minister Winston Peters told regional councils he wanted the forum to reconvene and find a solution.

Mandatory Covid-19 testing of all ports staff reined in to only ‘high risk’ contacts

Listen

The government has backtracked on plans to urgently test every single person who had come into the Ports of Auckland for Covid-19.

Last week the Ministry of Health issued a mandatory testing order for all workers at the Auckland and Tauranga ports as part of its border blitz.

It had hoped to get all of those workers tested by midnight last night, but only managed to get about a fraction swabbed – 3485 workers as at 1pm today.

The previous order had covered anyone who had come into contact with the port since 21 July – that was more than 5000 people from 800 organisations at the Ports of Auckland alone.

The current order has been narrowed to focus on higher risk workers, such as those dealing directly with ships and ship workers, and anyone with symptoms to be tested.

The Road Transport Forum had opposed the testing of truck drivers saying they came into contact with hardly anyone at the borders, and Ports of Auckland spokesman Matt Ball agreed that it made sense to reign in the testing.

“The scale of the previous order was huge and probably not necessary, given the low and pretty much zero risk for people like truck drivers.”

He said the ministry had now come to grips with how the supply chain at the ports worked and how many people actually interacted with the ports.

Ball said the ports had been asking for testing since April and the government had been slow to respond.

Ongoing testing will now continue at the Ports of Auckland and the Tauranga Port, and Health Minister Chris Hipkins said it was also being rolled out at other ports around the country.

The government still doesn’t know what the source of the latest Covid cluster in Auckland is.

The first case is believed to be a worker at the Americold facility who displayed symptoms on 31 July.

Testing at the borders will continue as health authorities work to figure out any gaps.

Hipkins said he would be issuing two public health orders by the end of the week – one formalising the testing regime for air crew and the other formalising routine testing moving forward.

Covid-19 testing to take place at all ports in New Zealand

After months of urging that ports should be treated like airports for Covid-19 security, New Zealand port companies have been stunned to receive an order from director general of health Ashley Bloomfield for all maritime border staff to be tested for the virus in the next three days.

The ports, through the port companies chief executives group, along with maritime unions, say they have been asking the Ministry of Health since the end of the first lockdown for sea borders to be treated like aviation borders.

Bloomfield’s letter, sent today, said the ministry would work with regional DHBs to provide testing on site “as a matter of urgency”.

“Testing is for all people who work ports around New Zealand who might potentially come into contact with ships’ crew … ” the letter said.

For New Zealand’s biggest port at Tauranga, the order means around 2000 staff and workers must be tested by close of business on Monday.

Ports chief executives’ group spokesman Charles Finny said as recently as two weeks ago the maritime sector had been urging health authorities to test at ports, without success.

A test station has this week been set up at Ports of Auckland. A spokesman said the company had been “dead keen” to see it but the time it has taken for action was frustrating.

Port of Tauranga chief executive Mark Cairns said he had been asking for Covid security at the port to be strengthened since April.

Finny understood from port chief executives he had spoken to on Friday that DHBs intended to set up testing systems at ports over the weekend and on Monday.

“We said months ago that ports should be treated like airports.”

Bloomfield’s letter said along with the new testing requirements, border-based employees needed to continue to take daily health checks.

“Thank you again for the important work you are doing to strengthen practices and to increase vigilance at the maritime border, in order to protect your employees and our community from Covid-19,” it concludes.

Beirut explosion casts harsh light on international shipping rules

Murky story of a ship called the Rhosus, which began life as a Japanese dredger

Andrew North – August 10, 2020 18:00 JST – Nikkei Asian Review

Boris Prokoshev, right, captain of the cargo vessel Rhosus, and boatswain Boris Musinchak, pose next to a freight hold loaded with ammonium nitrate in the port of Beirut, in a summer 2014 photograph.    © Reuters

Andrew North has reported widely from across the Middle East, South Asia, and Central Asia. He is a regular commentator on Asian affairs.

This is the story of a ship that was built in Japan in 1986.

Named the “Daifuku Maru No. 8,” maritime records show that it began life as a humble dredger, scooping up mud and rock from Japanese shipping lanes so that bigger craft wouldn’t hit the bottom. Then, in 2002, it was sold to South Korea and renamed. So began a journey around the world, during which the ship’s name, owner and the flag flying from its mast changed every few years.

What are known as “flags of convenience” (FoCs) provide a legal way for a shipping company from one country to reduce costs down by “renting” the flag of another country that has lighter labor rules and lower taxes. Many of these flags are run by smaller, and often poorer countries, ranging from Liberia to North Korea, even landlocked Mongolia and Bolivia. It earns these states valuable revenue, but it also provides a way for unscrupulous owners to conceal their identities while running substandard and polluting ships, as well as dodging the law and cheating their crews.

Between 2005 and 2007, the Japanese-built ship was passed between two Hong Kong companies who called it the “Zheng Long” but flagged it to Belize and then Panama, the tiny Central American state that has nearly 9,000 ships sailing under its flag. That’s around 16% of global shipping tonnage, more than any other country.

Once notorious for its lax rules, Panama now keeps closer tabs on who can fly its colors. So it was telling that when a Panamanian company bought the ship and converted it into a cargo freighter, it was reflagged to the Black Sea nation of Georgia — another country known for running a low-cost FoC regime.

There were still more identity changes to come. First, a Cyprus-based Russian business owner bought the freighter. But when it was sent to pick up a shipment from the Georgian port of Batumi in 2013, the Georgian flag had been replaced with the colors of Moldova, a country with no seaside coast but a reputation at the time for allowing its flag to be used for smuggling by Iranian vessels.

Showing its age, the now 30-year old ship had defects that included a hole in its hull requiring water to be pumped out to stop it sinking, but it set sail nonetheless. When the Russian owner didn’t pay wages, the crew walked out, forcing him to find another crew before sending the vessel out to Beirut to earn extra cash by taking on heavy machinery. When the ship’s decks buckled under the weight, inspectors were alerted and it was declared “unseaworthy.”

The former Japanese dredger was by then named the “Rhosus,” which the world now knows as the ship that carried the 2,700 tons of Georgian-made ammonium nitrate that exploded in Beirut port on August 4 with such deadly effect.A former Japanese dredger named the “Rhosus,” carried the 2,700 tons of Georgian-made ammonium nitrate that exploded in Beirut port on August 4, killing up to 158 people, and injuring more than 6,000.    © Reuters

In the aftermath of the disaster, the focus has rightly been on the failings of Lebanon’s dysfunctional government, as the explosive cargo was its responsibility once offloaded. But the murky story of the Rhosus also raises questions as to why an international system almost designed to avoid accountability is allowed to continue.

The International Transport Workers’ Federation (ITF) has been campaigning for an end to FoCs for decades. It lists 35 countries running flags of convenience, blaming the practice for low wages and abusive conditions among merchant navies, as well as the “floating coffins” on the world’s seas.

Some maritime experts argue that the story of the Rhosus shows that controls worked because the ship was eventually stopped in Beirut. According to Natasha Brown, spokesperson for the International Maritime Organization, the UN’s shipping regulation body, more and better inspections have led to a decline in serious incidents in the last seven years.

Japan, the US and Europe all operate a system of white, gray and black lists to classify flags by their record, with frequent inspections for poorer performers. “That makes it more difficult for an owner to keep using a blacklisted flag,” argues Luc Smulders, Secretary-General of the Paris MoU, the organization that oversees European inspections.

But such measures still don’t go far enough. Blacklisting doesn’t stop a ship from sailing, and there are plenty of ports beyond the reach of organized inspectors. Groups such as the ITF say that until there is a “genuine link between the flag a ship flies and the nationality or residence of its owners,” abuses will continue.

Moldova is a case in point. Seven years after the Moldovan-flagged Rhosus was stopped in Beirut, the country is on the official flag performance blacklist. But it continues to run a lightly-regulated shipping registry for all comers. You can do it all online with no mention of any physical checks. (The country’s ship registration agency did not respond to several requests for comment.)

With all that has since emerged about the Rhosus and its past, many have wondered how it was ever allowed to sail with so much explosive material on board. But as things stand, there is little to stop another ship with a shady past from setting sail today.

Firth of Thames best home for a new port for 100-plus years: Auckland Business Chamber (and Cubic agrees)

The suggestion of the Firth of Thames is a
The suggestion of the Firth of Thames is a “brave, big call”. Photo/ Google

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

Just when you thought not another report could be wrung out of Auckland’s port future debate, the Auckland Business Chamber is urging all Kiwis to completely “re-imagine” a port for 100-150 years – and it’s pick is in the Firth of Thames.

After staying pretty quiet during a flurry of reports over shifting the Auckland port, the chamber is launching its own take, “A Port for the Future”, which invites the community to use an accepted timeline that the existing port will do for another 25 or so years, to carefully plan another to last more than another century.

And for port observers feeling reported-out, Chamber chief executive Michael Barnett assures “this is not another report”.

“It is an effort by the chamber to get people to re-imagine where a port might be and what would be the best for New Zealand and New Zealand business – not a competition between Auckland and North or Tauranga but an informed discussion of what could be.”

Barnett said the chamber represents the voice of Auckland business without bias, and in this neutral position has stepped back to analyse all the discussion around the relocation of the port from Waitemata Harbour.

“The chamber … now realises that the issue is not just an Auckland problem, but is one that, if done correctly, will bring benefits right across New Zealand.”

The chamber had concluded the existing port was fully sustainable for another 25 to 30 years and that a solution is required beyond that. To provide a port solution beyond the generation after next required vision and a willingness to go beyond the familiar.

Ports of Auckland has 25-30 years of life left in it, says Auckland Business Chamber. Photo / Michael Craig
Ports of Auckland has 25-30 years of life left in it, says Auckland Business Chamber. Photo / Michael Craig

The chamber’s offering makes a case for a man-made island ship exchange terminal in the Firth of Thames, connected by broad gauge rail to a container terminal facility in the vicinity of Pokeno/Meremere.

The island terminal would be “a whole-of-New Zealand” terminal servicing large foreign trade ships handling all import and export containers. The report does not discuss costs but points to several overseas examples to underline there is nothing in the paper that is not tried and proven elsewhere in the world.

“What is running out (for the existing port) is social licence and that’s what’s motivating us to try to accelerate the debate and re-imagine what a port could look like”, Barnett told the Herald.

“What’s been uncomfortable has been the apparent political nature of the discussion so far, it tends to have been personality-driven from the north – almost an anti-Auckland thing. Yet this isn’t about either of those things, it’s about a nation down in the South Pacific dependent on its ability to import and export.

“We need something for the next 100 years and the people of New Zealand should make that choice. It’s not up to a politician or a government.

“(So far) we have re-imagined the port simply by saying ‘let’s pick up Auckland port and take it north (to Northport)’. I’m saying we can do it another way.”

The chamber will widely distribute its paper within the freight, transport and shipping sector and invite comment and discussion directly to the chamber.

The chamber’s analysis concluded there would always be a need for a port in Auckland – “just not as we know it”.

Auckland Business Chamber chief executive Michael Barnett.
Auckland Business Chamber chief executive Michael Barnett.

Social licence issues arising at New Zealand ports were “but the tip of the iceberg and demonstrate that the focus being purely on relocation of the Port of Auckland is extremely narrow and has the potential to lead to a flawed conclusion”, said the paper.

“Ports of Auckland is clearly approaching a sunset phase, however, it is the chamber’s view that the present facility will be capable of handling existing throughput plus growth for several years to come … (but) it is inevitable and acknowledged by the chamber, that the port’s container facilities will be shifted from the present location to another site.”

The paper said volume growth and investment required at the Port of Tauranga, along with “other issues starting to emerge” made it “pretty safe to assume that the Tauranga terminal will also be looking for a new location in future”. In four weeks the Tauranga port handled as many containers as Wellington’s port in a year.

Current modelling showed that with the construction of the future city of Drury South, the Auckland-Hamilton-Tauranga triangle would encompass four of New Zealand’s six largest cities.

Over the next 30 years the population in the area between greater Auckland and Taupo was forecast to grow by 7.8 per cent a year. During this time the rest of New Zealand’s population was predicted to grow by 2 per cent a year and by 3.6 per cent north of Auckland.

The option of developing a new port at Manukau Harbour raised in earlier reports was indeed an option when considered just in the context of Auckland, the paper said.

“However it is not compatible with the chamber’s objective of providing a future solution that will benefit NZ Inc. Throughout … the chamber has avoided introducing untested or yet to be implemented technology as will be required to overcome the hazardous conditions presented by the Manukau Harbour entrance.”

The Firth of Thames had been looked at in studies over the past 25 years.

“Unfortunately the concept appears to be too far out of the mainstream for people to understand, especially as it has only been viewed as a solution solely for Auckland and suggest constructions methods based on the traditional.”

The paper details modern construction methods used overseas.

Barnett concedes the chamber’s suggestion of the Firth of Thames is a “brave, big call” given the environmental, wildlife and iwi concerns that are likely to be raised against it.

But with time on New Zealand’s side for consultation, research, innovation and planning, problems could be properly addressed and hopefully overcome.

Barnett, a veteran of port group discussions over the years, worked with ports consultant Tony Boyle to produce the paper. The project cost did not exceed $10,000, he said.

“But I like to think it is rich in intention.”

Freight company CEO says Manukau Harbour ‘wouldn’t work’ as a Ports of Auckland replacement

A top freight executive says no shipping company would choose Manukau Harbour as a potential new destination for an Auckland port.

A report by economic consultancy Sapere published yesterday ranked Manukau Harbour as the best option. It considered Northport, Manukau, the Firth of Thames, the Port of Tauranga and a shared increase in capacity at both Northport and the Port of Tauranga.

An earlier report, backed by New Zealand First, identified Northport at Marsden Point as the best option. The report was completed by a Government working group led by former Far North mayor Wayne Brown.

Auckland Mayor Phil Goff called the previous Northport work “shoddy” and Transport Minister Phil Twyford said it “had a clearly predetermined outcome” in favour of moving the port to Marsden Point.

New Zealand First still backs Northport as a new location, with MP Shane Jones saying Manukau was the most treacherous harbour in the country and unfit as an alternative site for Ports of Auckland.

Carr and Haslam director Chris Carr said he didn’t know how the Sapere report had come up with Manukau Harbour.

“It’s probably about the only time in the world I’ll ever agree with Shane Jones,” Carr told told Morning Report.

“The prevailing weather comes in on the western side of the country. Ports don’t exist in the west coast of New Zealand, they exist on the east coast.

“I’m no maritime person but all the shipping companies say that they won’t go to the west coast and that in itself would tend to make Manukau the first shipless port that we’d have in the country.

“It’s simply not suitable operationally and it wouldn’t work no matter how much we might try and make it fit.”

If the port had to be moved from Auckland it should be to somewhere ships can get in and out safely, he said.

“You also want to go somewhere near the largest consumption area which is the Auckland-Tauranga-Hamilton-Waikato area.

“The only place you can do that is the Firth of Thames. It’s not ideal.”

He agreed with the Sapere report that Ports of Auckland could keep operating for more than 30 years before it ran out of space where it was.

“But New Zealand’s not good at doing this sort of stuff and we take so long to do it that we need to start working at it and looking at it.

“If you look at it from a logistical point of view, the decisions become quite easy – it’s when you get politics involved it becomes quite hard.

“The shipping companies who in the end of the day determine where their vessels come would not choose Manukau, ever.”

Shane Jones told Morning Report he had come off second best to people opposed to a relocation to Northland.

“I had professionally and personally campaigned with my leader for the expansion of Northport and relocation of Ports of Auckland activity to Tauranga and Northland,” he said.

He invoked the sinking of the Orpheus in 1863, in which 189 people died, as reason to not build a port at Manukau Harbour.

“I will prophesy that a thousand years will pass before a new port will ever be located in Manukau Harbour.

“[The Sapere report] wants to take us over the bar of the most treacherous harbour in New Zealand and dredge to a level of spill that will rival Mt Cook somewhere in New Zealand or it’ll be dumped in the ocean.”

Jones said work on a new port needed to “get cracking” in 10 to 15 years.

“In New Zealand we leave too many infrastructure decisions to the last minute.”

No decision is to be made before the election, leaving it for political parties to campaign on.

Coronavirus: Ships could have shore-leave tightened after new Covid-19 cases

The Government may tighten shore-leave controls on crews of visiting ships as it toughens Covid-19 border restrictions after two women were released from self-isolation, then tested positive.

Prime Minister Jacinda Ardern called the case unacceptable and put a senior military official in charge of overseeing the isolation and quarantine process.

Ship crew are free to come ashore if they meet health and isolation conditions, except in Auckland where the port company is the only one to ban routine shore leave due to Covid-19, under alert level one.

Elsewhere, if a ship has previously been at sea for 14 days and declares no relevant health problems among crew, there is no test or physical Covid-19 control as they come ashore.

“The Minister is currently seeking advice on further tightening up these requirements,” said a spokesperson for the Minister of Health David Clark, in response to a query from Stuff.

Major ports contacted by Stuff, at Tauranga, Wellington and Lyttelton follow the Ministry of Health and Maritime New Zealand rules, with decisions on shore leave, made by local public health authorities.

Ports of Auckland (POAL) is the only location where the port company made itself one of the gatekeepers, and it does not allow crew to come ashore, due to Covid-19 risk.

“We’re restricting general shore leave because we feel there are insufficient border controls in place and allowing general shore leave would be an unacceptable risk to the community,” said POAL spokesman Matt Ball.

Ports of Auckland does not routinely allow foreign ship crew ashore due to Covid-19.
DAVID WHITE/STUFFPorts of Auckland does not routinely allow foreign ship crew ashore due to Covid-19.

“Crew of foreign vessels must not be transported onto or from the Ports of Auckland without permission from a General Manager from the Ports of Auckland, Customs and Auckland Regional Public Health Service,” said POAL’s ‘Covid-19 Controls for Contact with Visiting Foreign Vessels – alert level 1’ guide.

In Late May, under Covid-19 alert level two, Port Taranaki told Stuff crew were coming ashore in line with health and Maritime New Zealand guidelines.

In a statement, a Port Taranaki spokesman said berths had been busy with methanol, log, bulk feed, and petrochemical vessels visiting the port, and ship crews were taking the opportunity to get off the water, stock up on provisions, and discover New Plymouth.

A rare cruise ship visit at Port Taranaki with the Azamera Journey calling at New Plymouth in February.
SIMON O’CONNOR/STUFFA rare cruise ship visit at Port Taranaki with the Azamera Journey calling at New Plymouth in February.

The “14-days at sea” criteria prior to a ship arriving at its first New Zealand port, is considered to be a Covid-19 self-isolation period under the guidelines applying to shipping.

“Shore leave is not permitted during the self-isolation period. If the crew need to interact with border or port staff they should follow the advice on personal protection for border staff,” said a spokesperson for Wellington’s Centreport.

A spokesperson at another port told Stuff that crew numbers on cargo ships were small, and at any time shipping companies were highly health-conscious.

Lyttelton Port Company told Stuff that while all shore leave had been banned under Covid-19 alert levels four and three, the decision now lay with Canterbury District Health Board.

“It has been reinforced to Port Companies around New Zealand by the Director of Maritime New Zealand that such leave for crew should be allowed if these criteria are met,” said Phil De Joux, LPC’s strategic engagement manager, in a statement.

Warning NZ ports may start to seize up this week if non-essential freight can’t be moved

Allowing only essential freight to be transported to businesses by road, not that simple, haulage organisation warns.
JOHN KIRK-ANDERSON/STUFFAllowing only essential freight to be transported to businesses by road, not that simple, haulage organisation warns.

A “pile-up” is looming at the country’s ports that will restrict the movement of food and medical supplies if non-essential freight destined for closed businesses can’t be cleared, Road Transport Forum chief executive Nick Leggett has warned.

“All manner” of freight could arrive at the same time on cargo ships, he said.

“We now have a situation where many businesses that receive some of that freight are closed and there is nowhere for it to go,” he said.

“The issue with non-essential goods is you can remove them from the port, but if there’s nobody at the receiving end at work, where do you put them?’

The Government needed to recognise that “all freight must move” during New Zealand’s coronavirus lockdown, and not just essential items, Leggett said.

He forecast “constipation” at the ports and massive problems, if the issue wasn’t addressed.

“This an absolute real live thing.”

Containers need to be cleared and emptied to ensure essential supplies can get in and exports can get out, Road Transport Forum chief executive Nick Leggett says.
SUPPLIEDContainers need to be cleared and emptied to ensure essential supplies can get in and exports can get out, Road Transport Forum chief executive Nick Leggett says.

​Mainfreight chief executive Don Braid said it wasn’t seeing congestion yet, but the forum was “making good points”.

“Under the lockdown rules, it is not possible to deliver non-essential freight.”

A successful outcome would require “innovative thinking and action”, he said.

“We are attempting to assist the government agencies through this where we can.” 

Leggett said officials at the Transport Ministry had “definitely listened” to the forum’s concerns, but had said the rules stood at this point.

“If it is deemed by the Government to not be essential, it cannot be moved.

“We absolutely appreciate the reasons for that but if we don’t have an ‘all-of supply’ chain solution to this we believe there will be issues in a couple of weeks,” he said.

Transport Ministry supply chain manager Harriet Shelton responded to the forum’s concerns with an update that said its lockdown rules did allow the movement of non-essential goods “if necessary to move or create space for essential goods”.

Leggett said the forum would not have put out its warning lightly at this time.

Reopening closed businesses to accept non-essential freight would “fly in the face” of the reasons for the lockdown, which were to keep as many people home as possible, he said.

“We do appreciate that, but we need a solution.”

Leggett said another problem was that if containers in which non-essential goods were imported were not emptied, there would be a shortage of containers for exported goods going out.

“All freight needs to move during this time to enable the valuable exports that are going out, such as kiwi fruit, access to ports.”

Port of Tauranga says non-essential freight can be stacked next to its terminals but will then take time to retrieve, so it is important essential goods are identified first.
MATT SHAND/STUFFPort of Tauranga says non-essential freight can be stacked next to its terminals but will then take time to retrieve, so it is important essential goods are identified first.

Customs Brokers and Freight Forwarders Association chief executive Rosemary Dawson agreed that the delivery of non-essential cargo remained an issue that would need to be dealt with to avoid congestion. 

“Sea freight was operating fairly normally now,” she said.

But Dawson said she “absolutely” shared some of the concerns expressed by the Road Transport Forum, including with regard to the availability of empty shipping containers.

Port of Tauranga chief executive Mark Cairns said it had put in place new measures to allow importers to identify imported cargo required for essential services before it arrived in New Zealand “so that it can be handled and transported first”.

It needed the support and co-operation of importers and exporters to help it manage the flow of cargo “and avoid blocking the path of essential food, medicine, equipment and other supplies”, he said.

Mainfreight chief executive Don Braid says the Road Transformation Forum is making good points and innovative thinking will be needed.
CHRIS HUTCHING/STUFFMainfreight chief executive Don Braid says the Road Transformation Forum is making good points and innovative thinking will be needed.

Non-essential imported cargo could be temporarily stored on or off-site until it could be collected by truck or transferred by rail to MetroPort Auckland, he said.

Spokeswoman Rochelle Lockely said non-essential freight could be stored near its terminals in Auckland and Tauranga, but once freight went into that “locked stack” it would not be fast to retrieve, so it was important essential items were identified first.

There was a worldwide shortage of shipping containers because of the disruptions caused to supply chains globally by the coronavirus, but that was not something the port had detailed information on, she said.

The port would not charge extra fees for storing non-essential cargo until April 26, apart from one-off handling charges and for power charges needed to keep refrigerated containers cool, Cairns said.

The Road Transport Forum has suggested that some goods that can’t be delivered to closed businesses could be stored on land owned by Kiwirail, but Leggett believed that could only be part of any remedy.

“Closing down the country to the scale we have now hasn’t been done before and it does reveal some issues that need to be addressed pragmatically,” he said.

To illustrate the problem, Leggett said 14,000 cars were expected to arrive from Asia over the next month.

“Those cars cannot stay on the port; they have to go somewhere. The dealers that would normally take them are closed.

“We appreciate cars are not an essential service, however, they are holding space that is needed for essential goods.

“Our industry is looking at how we could find storage for the freight with nowhere to go, but we need the Government to allow that freight to move,” he said.

Leggett said some truck drivers had been stopped by police and asked what they were doing on the roads.

“Well, they are doing a job and it is one that is essential at a time like this.

“They cannot be forced by the Government to be arbiters of what is essential and non-essential on the back of their truck,” he said.

Stuff

Ports of Auckland interim results

Monday, 2 March, 2020 – 10:48

Ports of Auckland Chief Executive, Tony Gibson has today announced the company’s half-year results.

“Our company is in the midst of delivering our 30-year master plan, a major investment programme which will increase capacity, efficiency and returns, as well as lay the foundation for us to meet our 2040 zero emission goal.

Delivering such a large investment programme whilst keeping the port working well has not been without challenges, however the last six months have seen significant progress and the next six months will see the completion of two major master plan elements: container terminal automation and the new car handling building. We have also made significant progress on a third element, channel deepening.

We largely completed infrastructure work for terminal automation this period, enabling some capacity to be returned to terminal operations. There is still some work to do in the second half of the financial year, but the worst of the disruption from this work is behind us. The 2019 import peak did not see the same level of congestion or delay that was seen in 2018.

Even so, we have felt the effect of the automation work this period. Container volumes were down two percent on the year prior as a result of the loss of two service calls, a service change and a high number of vessels arriving out of schedule.

The ability to find staff in a tight labour market has also affected volumes. At times we haven’t had the resources to handle as many containers as customers have wanted. This situation is expected to ease once automation is fully delivered.

Automation will go live in two phases: the northern part of our terminal late March and the southern area two-three months later. In early January we decided to put the go-live date for Phase 1 back a month to the end of March 2020 so that we could handle unexpectedly high January volumes.

Automation testing and preparation is going well. We are now testing the new terminal operating software using live terminal data. Staff training is ongoing and truck drivers are also being trained in the new processes.

Once automation is fully live around the middle of the year, we will gain a significant amount of terminal capacity, from around 900,000 TEU a year to around 1.7 million TEU. That is enough capacity to handle the freight needs of a million more people in Auckland and should last us until the middle of the century. If necessary, beyond this date further changes to the port layout and greater levels of automation could deliver enough capacity for an Auckland population of around 5 million people.

Work on our new car handling building has progressed very well and the building is expected to be finished on time and on budget around the middle of 2020.

It will deliver new capacity in time for the Auckland fishing fleet to be relocated to Marsden wharf for the America’s Cup and to handle an expected upturn in vehicle imports as New Zealand switches to an electric vehicle fleet.

We have started engagement for a new public space on the building’s roof which will be an exciting addition to the downtown waterfront. We aim to have the park open no later than 2023.

We have applied for consent to deepen our channel and asked for the application to be publicly notified. Notification was not required under the Auckland Unitary Plan for dredging inside the channel precinct, but we feel it is important for all our major projects to be carried out in an open and transparent manner. We also undertook a great deal of public engagement prior to lodging consent. Council has now received public submissions and we expect a consent hearing to be held later this year.

Work at our Waikato Freight Hub has progressed well, with the completion this period of the new access road and bridge which will be vested with Waikato District Council. Construction of the first stage of heavy-duty pavement for the inland port part of the development is underway.

Financial performance

As expected, revenue was flat while costs for the last six months were up, due to the investment programme, higher interest costs, and higher labour costs. As a result, net profit after tax was $17.2 million, compared to $24.4 million in the pcp.

This situation will remain much the same for the full year. The company will not pay an interim dividend and will pay a lower full-year dividend as forecast. The second half of the year will be impacted by the new coronavirus. While we expect the impact to be temporary, we can’t estimate the quantity of it yet.

Looking forward to the 2020/21 financial year, while there is still uncertainty in the global trade environment, the completion of the automation project will mean more capacity at the terminal and the ability to handle greater volumes. With new capacity in hand and a third berth in operation, we will look to win back both volumes and services over the coming year.

Our people

One of the biggest issues for our people is the impact of automation on jobs. We expected around 50-60 roles to be affected, but as we get closer to go-live we can see several factors which may lead to a lesser impact.

First, our container terminal operations are under-staffed due to a tight labour market. Second, some jobs may change but not disappear and some new roles are being created. Third, when automation goes live we will also open our third container berth and we expect volume to increase.

This is a potentially positive situation. If we win back services and increase volume, we may have a situation where no roles are lost, so once automation is fully operational, we will be targeting volume that has moved to other ports in the last few years. Given our position on Auckland’s doorstep, with a faster, lower carbon supply chain than other ports, we expect to be successful in winning back business.

Because we will not know the exact impact on jobs until after automation is fully operational, we have given a commitment that there will be no staff changes until after implementation is complete. We are ensuring staff are kept well informed.

Zero-emission by 2040

We intend to be a zero-emission port by 2040.

As a member of the Climate Leaders Coalition we have made a public commitment to set an emissions reduction target. We have also committed to the Science Based Targets initiative (SBTi) because of the scheme’s ability to help with verifying that our emission reduction roadmap is consistent with an approach grounded in science. The SBTi requires emissions reductions roadmaps to be aligned to a target consistent with keeping global warming well below 2OC or 1.5OC of pre-industrial levels.

We have developed an emissions reduction roadmap in line with the ‘well below 2OC’ target and it was approved by the Board in December. In the short to medium term the roadmap involves using fuel switching (to bio diesel or renewable diesel) and the purchase of renewable energy certificates for our electricity to achieve emissions reductions. This will be followed by the adoption of zero emission technology in the mid to late 2030s. We are now submitting our roadmap to the SBTi for verification.

We are also looking to reduce emissions in the supply chain. Our great advantage as a port is that we are in the market we serve. Other ports, like Tauranga or Northport, lie a great distance away so goods imported to Auckland through these ports have a higher carbon footprint.

We have created a carbon calculator so that cargo owners can see the difference using a local port makes. For example, a 15 tonne, 20-foot container imported via Ports of Auckland and delivered to South Auckland will only emit 18 kilogrammes (kgs) of carbon. Through Tauranga it will emit 130 kgs – seven times as much – and through Northport ten times as much: 184 kgs.

At a time when climate change seems to be accelerating, every gram of carbon counts. Currently around 300,000 TEU of Auckland freight is handled through Tauranga. Auckland could potentially save over 30,000 tonnes of CO2 a year by importing through its local port. By helping customers see the benefit, we can make a significant contribution to Auckland’s effort to fight climate change.

We continue to make a positive economic and social contribution to Auckland and New Zealand. Our recent investments will ensure we can continue to play that role in the future, and we will see the results of that investment delivered from 2020 onwards.

I would like to thank our staff, management and directors for the work they have been doing to prepare our port for a new era and to keep it operating at a high standard.”

New Zealand ports see growth amid potential cargo shift

in Port News 18/02/2020

New Zealand’s ports have generally continued to experience growth in container volumes amid potential that all freight operations at the Ports of Auckland could eventually get dispersed amongst other nearby ports.

Ports of Auckland plays a huge role in New Zealand’s trade with other countries, being that it handles the second highest amount of container volumes in New Zealand, with the Port of Tauranga taking first place. However, the Ports of Auckland did experience year-over-year declines in net profit and container volumes for fiscal year 2019, which ended June 30, 2019 for New Zealand’s ports.

From port to port. New Zealand’s ports collectively handled 3.43 million TEUs in FY 2019, up 1.3% from FY 2018 and up 7.4% from two years prior, as illustrated in the chart below, which was built using data from the relevant port authorities across the country.

Six of the ports saw container volumes increase year-over-year in FY 2019, while three experienced a decline, as illustrated in the chart below, which was also built using port authority data.

The chart below, built using data from BlueWater Reporting’s Port Dashboard tool, shows the Port of Tauranga is called by the most liner services that connect New Zealand to regions beyond Oceania at 13, nine of which are container services, followed by the Ports of Auckland with 11 liner services, six of which are container services.

The Ports of Auckland and the Port of Tauranga have the strongest global ties of New Zealand’s ports. While the vast majority of the liner services that call New Zealand don’t sail beyond Oceania or Asia, there are four liner services that call New Zealand that sail beyond these two regions.

The chart below, built using data from BlueWater Reporting’s Port Dashboard tool, shows the three container services calling New Zealand that also sail beyond just Oceania and Asia. All three call the Port of Tauranga, while two of the three call the Ports of Auckland.

Not included in this chart is a roll-on/roll-off service operated by Wallenius Wilhelmsen. Although the ro-ro service’s rotation changes slightly with each voyage, it tends to sail between North Europe, the East Coast of North America, Central America, Oceania, Asia, West Coast North America, Mexico, Central America, East Coast North America and back to North Europe. The ro-ro service tends to only call Auckland in New Zealand.

Shift proposal. A final report by The Upper North Island Supply Chain Strategy (UNISCS) Working Group, an independent working group that reported to New Zealand’s Ministers of Finance, Transport and Regional Development, found that the Ports of Auckland is unviable long term.

The final report, titled, “Transforming Auckland; Transforming Northland – Final Report of the Upper North Island Supply Chain Strategy (UNISCS) Working Group,” was released in November.

The UNISCS Working Group recommended that Northport, which operates a multi-purpose port in Marsden Point, should be developed to take over much or all of Auckland’s existing and projected freight business, while the Port of Tauranga’s existing expansion plans should proceed to accommodate growth.

“The new two-port configuration should be supported by a rejuvenated North Auckland rail line and spur to Northport, and a new inland freight hub in northwest Auckland to complement and be connected to Metroport (Auckland) in the south,” the UNISCS said.

MetroPort Auckland is an intermodal cargo hub that connects to the Port of Tauranga via rail.

The working group recommended the government give the ports until Dec. 1 of this year to reach a commercial agreement on how the strategy should be implemented. Additionally, the working group recommended the transition begin immediately and be fully implemented by no later than 2034.

The working group said it “argues for Tauranga to continue with its growth plans but for Northport to be the major site to cater for freight growth over the next 15 years and beyond.”

In response to the finding’s, New Zealand’s Ministry of Transport said in December that the working group’s recommendations raise a range of economic, social and environmental questions for the government to consider. Consequently, the government instructed the Ministry of Transport to undertake further analysis and report back to the Cabinet in May.

Time for a shift? There appears to be numerous reasons to shift freight operations from the Ports of Auckland, with one of the largest being the amount of money that would have to be invested into the site for it to remain viable.

The UNISCS Working Group noted how the Ports of Auckland’s freight operations are already constrained, particularly on the landside, adding how it would require an estimated NZ$4 billion in investment over the next 30 years and the dredging of a further two million metric tons from Auckland’s Waitemata Harbor for the port to effectively handle New Zealand’s expected freight growth.

Additionally, existing port operations in Auckland remain highly industrial, and include the importation and storage of containers, vehicles, coal and cement. “These uses produce very poor returns for its owner, Auckland Council, with dividends dropping as low as NZ$8.7 million for the privilege of occupying land with probable value of NZ$6 billion,” the working group added.

Business at the port was not exactly booming in FY 2019. The Ports of Auckland’s annual report for the fiscal year showed that compared to the prior fiscal year, breakbulk cargo volumes (including cars) fell 3.3%, container volumes fell 3.5% and car volumes fell 14.3%.

Ports of Auckland CEO Tony Gibson said container volumes were down because infrastructure work needed to automate the terminal reduced the terminal’s capacity and made operating more difficult. Additionally, he said car volumes were hindered by a drop in car sales, as well as new treatment rules for imported vehicles, which are designed to prevent the brown marmorated stink bug from entering the country.
However, data from Ports of Auckland shows that container volumes for FY 2019 were the lowest they had been since FY 2016, as illustrated in the chart below.

Additionally, Auckland’s economy is no longer based on manufacturing, let alone agricultural commodities, but is overwhelmingly dominated by services, according to the UNISCS Working Group, which added how Auckland generates export revenues from tourism, education and IT, which don’t require a port.

It also appears most Aucklanders don’t necessarily want a port in the area. A June 2019 Colmar Brunton study, dubbed, “Aucklanders’ Sentiment Towards Moving the Auckland Port,” which was prepared for the Ministry of Transport on behalf of the UNISCS Working Group, asked respondents, “How do you think moving the cargo port would affect Auckland’s attractiveness as a place to live, work or visit?” Sixty-two percent of respondents said they thought that moving the cargo port to a new location (possibly outside Auckland) would make Auckland much/slightly better.

Potential prospects. Auckland, Tauranga and Northport make up the Upper North Island’s three ports. While Northport is New Zealand’s newest port with a massive amount of potential, the Port of Tauranga is the country’s biggest port and continues to see rampant growth.

“The progressive and managed closure of Auckland’s freight operations, the development of Northport and the continuation of Tauranga’s existing expansion plans is in the best interests of Auckland, the rest of the Upper North Island and New Zealand as a whole,” according to the UNISCS Working Group.
In regards to Northport, the working group noted how there is a vast supply of flat, industrial-zoned land adjacent to the port with no higher alternative uses. “The storage of imported vehicles, empty containers and bulk goods can take place around Northport at a fraction of the cost possible in Auckland,” the working group said.

Additionally, the working group pointed out how New Zealand relies mostly on agriculture and forestry to supply exports to provide income for the country. “Of the Upper North Island’s three ports, Tauranga is close to producers of export commodities and is known best as a successful export port, but is also taking an increasing share of Auckland’s import business. Like Tauranga, Northport is also close to producers of export products and also handles the importation of all of New Zealand’s fuel, but its expansion is hampered by the absence of a rail connection.”

Northport features a three-berth facility at Marsden Point with a total wharf length of 570 meters, according to Northport’s website. For berths one and two, there is 13 meters of water available at chart datum and 14.5 meters at berth three.

The port’s terminal primarily focuses on the export of forest products, although it can cater to large, multi-purpose vessels. The port features 58 hectares of land, 30 hectares of which are currently paved and being used for cargo operations, while there is over 180 hectares of land outside the port that is available for port-related ventures to set up and operate from.

Meanwhile, container volumes over at the Port of Tauranga are booming, as well as substantial upgrades at the port.

“International experts have told us that Port of Tauranga can easily accommodate up to 2.8 million TEUs on our current footprint. We already have the next stage of capacity expansion under way,” Port of Tauranga CEO Mark Cairns said in December. “We still have plenty of capacity on the rail connection between Tauranga and Auckland, with the ability to double the current number of trains per day.”

A Port of Tauranga spokesperson told BlueWater Reporting in January that the port owns 190 hectares of land on both sides of Tauranga Harbor, with about 40 hectares still available for development.

“Our next significant capital expenditure will be extending the container terminal quay to the south. Port-owned land adjacent to the existing berths will be converted from cargo storage to a fourth container vessel berth, adding up to 385 meters to the overall quay length. We hope to have this completed in about two years,” the spokesperson added.

The port’s ninth ship-to-shore crane is being delivered in early 2020 as well as seven straddle carriers.

“Future stages of expansion will be driven by cargo volume growth and will primarily involve rail-mounted stacking cranes and additional ship-to-shore cranes,” the spokesperson said.

Ports of Auckland’s perks. Although business at the Ports of Auckland did decline in FY 2019, it still plays a huge role in New Zealand trade, and upgrades at the key port remain underway.

Current projects in the works include automation at the container terminal, as well as a car handling facility.

Beginning in 2020, the container terminal will become the first in New Zealand to use automated straddle carriers to load and unload trucks and operate the container yard, according to a Ports of Auckland FAQ pamphlet updated in January. There will be a total of 27 automated straddles, although the terminal will retain 24 manual straddles for servicing the vessel cranes and the out of gauge, oversized cargo truck lanes. The northern berth will be automated first in late March 2020, while the launch of phase two is expected to occur in May, in which automated straddles will work the southern half of the terminal.

Meanwhile, the Ports of Auckland reiterated in its December 2019 quarterly newsletter that its car handling facility will be complete by August 2020. The facility will allow the port to handle more cars in less space and will be capable of holding up to 1,700 vehicles.

Additionally, the Ports of Auckland does still appear to economically benefit Auckland and New Zealand as a whole. The consulting firm New Zealand Institute of Economic Research (NZIER) released a report in October 2019, dubbed, “Location, location, location – The value of having a port in the neighbourhood,” which found that the national economy, measured by GDP, would be well over NZ$1 billion smaller per year if goods moved through another port.

NZIER noted how the value of cargo crossing the wharfs at the port has grown faster than the volume, especially on the import side, as well as how the downtown port serves the country’s largest and fastest growing center of economic activity.

The port “gives firms in Auckland a competitive advantage: the final leg of an import journey is a short one, as is the first leg of an export journey,” NZIER said.

Additionally, data from BlueWater Reporting’s Country to Country Transit Analysis by Service tool shows how the Ports of Auckland plays a key role in liner shipping operations from China, New Zealand’s top trading partner, in terms of imports and exports.

The first chart below shows that four of the five fastest liner shipping transits from China to New Zealand involve Auckland. However, the second chart below shows that from New Zealand to China, the fastest transits involve the Port of Tauranga, followed by the ports of Napier and Lyttelton.

Source: Bluewater Reporting