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.”
An artist’s impression of a port-less Auckland. Graphic/Stop Stealing Our Harbour
New Zealand First appears as closed-minded on the Ports of Auckland as the other vested interests, who are either opposing change or advocating for alternatives.However dysfunctional those charged with providing vital transport infrastructure can be, they somehow always manage an instant massed-wagon-circling at the very mention of reform.
The Government is about to receive reports on both the future location of the Ports of Auckland and the feasibility of upgrading Northland’s rail. Labour’s support partner, New Zealand First, is fervently committed to moving some of Auckland’s port business to Northland, saying it will relieve our biggest city of congestion and bring much-needed growth to the north. For the coalition, this could become a make-or-break issue.
Unfortunately, NZ First appears as closed-minded on the issues as the other vested interests, who are either opposing change or advocating for alternatives, such as Tauranga, the Firth of Thames or Manukau Harbour.
Because of the complex governance and ownership issues of Ports of Auckland and other potentially affected ports and public entities, any Government changes will be extremely hard to negotiate. The choices available will also be sandbagged by the virtual impossibility of getting any case for new or restored rail to stack up financially.
However, the biggest hurdle will be patch protection – not just from commercial interests, but also from public agencies who too quickly forget the wider obligation that their state-conferred monopoly status puts on them.
Chief interested party is Auckland Council, which owns 100% of the Ports of Auckland. It has consistently defended its right to the port’s undiminished annual dividend of more than $50 million – to the point of vowing to build a multistorey waterfront car park for more revenue.
Mayor Phil Goff is adamant the port is essential to Auckland’s future. However, this assertion is debatable, given that a city such as Sydney survives very well with its harbour reserved for cruise ships and cargo sent to Port Botany, Wollongong or Newcastle.
Loss of port revenue would, however, doubtless force Aucklanders to pay for the loss with even higher rates, for benefits mostly accruing outside its boundaries. This would be unfair, especially to those on low incomes, and so politically dangerous that no sane administration would cause it to happen.
Perhaps a better starting point would be to regularise, even centralise, the haphazard patchwork of ports ownership. This would inevitably land the Government with a fat compensation bill, but the existing potpourri of local body, port-specific and private shareholders is a barrier to efficiency. Intra-agency competition and multiple interests – Auckland part-owns Tauranga’s and Northland’s port as well – further occlude the picture.
The National Party’s policy of treating the ports as discrete commercial entities immune from state interference is recklessly hands-off. But, by the same token, Aucklanders may be incensed at seeing their port asset commandeered, especially with NZ First so blatantly using Northland as its electoral base.
Yet, Auckland’s port must somehow be restored to being part of the national ports network. Aucklanders, used to the city’s infamous congestion, would be the first to agree it remains an international embarrassment that a prime waterfront site is used to store second-hand cars. Moving the port would unlock 77ha of superb shore land.
Northland’s Marsden Point tempts as an existing deep-water port, which, with a suitable rail spur from the Auckland line, could handle the business. Tourist and even commuter growth could ensue. Yet, there are other considerations, including the likelihood that moving the port to Northland would hugely increase congestion in Auckland, since most goods exported out of it are produced south of the city and would have to pass through it. Even if some of the goods went by train – and the expense of building rail tracks could itself prove prohibitive – the trains would be more frequent and longer, causing frustrating delays at level crossings. There are also the climate-change considerations, with increased emissions from transporting freight over longer distances.
In New Zealand, 99.7% of all imports and exports travel by sea, so the ports issue is not trivial. Any changes to these assets will affect, for better or worse, numerous other sectors and projects, not least the still-uncosted light rail to Auckland Airport. The sheer complexity and political risk may simply end in inertia. But everyone concerned has a duty to approach this debate with the country’s best interests at heart.
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.
The Government has launched a new independent Crown entity tasked with addressing New Zealand’s “unprecedented infrastructure deficit”.
The New Zealand Infrastructure Commission – Te Waihanga – would look at ways of fixing and further funding areas where infrastructure investment is needed.
Transport projects and urban infrastructure issues would likely be the focus of the new commission.
Infrastructure Minister Shane Jones said New Zealand has an “unprecedented infrastructure deficit” and the commission was tasked with addressing that.
He said New Zealand’s transport and urban infrastructure was struggling to keep up with population growth.
“This infrastructure deficit is manifesting in housing unaffordability, congestion, poor-quality drinking water and lost productivity.”
“That’s simply not good enough,” he said.
The Treasury has estimated the total infrastructure spend over the next five years would be $42 billion – more than double that of the past five years.
Jones said this showed why the establishment of the Infrastructure Commission was needed.
Overall strategy and planning would be the focus of the new body.
In a Cabinet paper, Jones said the Infrastructure Commission would also act as a “shop front” for private companies looking to invest in New Zealand.
He pointed the finger at the previous Government, accusing National of focusing on short-term projects and under-investing in infrastructure projects.
Local Government New Zealand president Dave Cull said unprecedented population growth and the need to adapt for climate change, as well as a low-emissions economy, means that New Zealand was “behind the eight ball in terms of infrastructure investment”.
“Having a central agency to act as a shop front that the private sector can interact with, and having an ability to buy goods and services in bulk will be a massive benefit to regional development projects,” he said.
The Cabinet has approved just over $4 million to establish the commission and legislation establishing the body would go before Parliament in April.
The creation of the Infrastructure Commission has been well flagged – in August last year Jones announced work had begun on establishing the body.
He said Treasury had been unable to properly quantify the value of the infrastructure deficit New Zealand was facing which he said “was not good enough”.
The new body would work to quantify the level of the deficit, as well as figuring out how to fix it.
The Government received 130 submissions on what the body should look like.
“We have heard that message, and we have delivered.”
Ministers will retain final decisions on infrastructure investments, but the Commission will have an independent board and the autonomy it needs to provide robust, impartial advice.
“It will help hold this Government, and future governments, to account and we welcome that,” Jones said.
Tuesday, 18 December 2018, 10:47 am Press Release: CargoChain
18 December 2018 – Jade Logistics Group, New Zealand’s leading port software company today announced a new business called CargoChain that it believes will revolutionise the way that cargo information is shared across the global supply chain.
The CargoChain platform was borne out of witnessing first-hand an inability to share supply chain information amongst multiple interested parties. David Lindsay, CargoChain CEO said “we observed this first with ports and then looked across the entire supply chain, and the problems were the same. Siloed, important information that supply-chain actors didn’t have, but needed, to make better decisions”.
Lindsay adds that following five years of R&D, CargoChain has created a cargo information sharing and innovation platform that supports the distribution of previously unavailable cargo information, as well as the development of third-party applications. “We believe that the collaborative and independent nature of the CargoChain platform is a first for the global industry.”
“The proposition is made even more powerful as today’s consumers are demanding trust while those involved in the supply chain require full transparency and visibility. We saw the need for a digital platform that provides this by sharing trusted information amongst all supply chain actors.
“CargoChain is one of the few supply chain solutions in the world that has blockchain as an integral working part of its platform to provide this trust.”
“Blockchain is currently right at the top of the technology hype cycle and most companies understand its importance but are really struggling to understand how they might use it in their business. CargoChain takes this pain away, as it already delivers a working blockchain solution for our customers”.
While blockchain is an important part of CargoChain, Lindsay notes that the platform itself provides significantly more to supply chain actors.
CargoChain’s ultimate vision is to empower the supply chain by providing its platform to application developer communities globally.
“We want to allow developers to solve the world’s supply chain problems for all logistics players, large or small.”
Initial CargoChain applications are already in development for a number of Australian and New Zealand customers, along with pilots for other significant supply chain projects. In New Zealand there is also significant interest from major food exporters, driven by the need to prove complete provenance with an emphasis on food trust and safety.
Global major terminal operators maintained a throughput of 41.69m teus in Q3 2018, but the “growth rate of the global terminal operators fell further to 5.8%, the lowest in the past two years,” a new report shows.
The Shanghai International Shipping Institute’s ‘Global Port Development Report of Q3 2018’ found global terminal operators had a “mediocre” performance in Q3 and Chinese and US ports in particular have suffered as a result of the US-China trade war.
The report confirms that “the escalating Sino-US trade war and shipping alliances’ trim or shutdown of liners and control on shipping space hindered the growth of the container shipping market.”
Container throughout down
Cargo throughput in the world’s major ports in Q3 2018 is up 7.4% year-on-year, but the growth rate of container throughput has declined, showed the report.
Cargo throughput rose to over 3.01bn tonnes in Q3 2018, but container throughout fared less well with 92.57m teus of containers handled, merely increasing 2.7% year-on-year.
Performance in production suffered as the escalating China-US trade friction ripped over to products suitable for container shipping, such as small-sized equipment and white goods.
Among the US ports, the Port of South Louisiana and the Port of Long Beach were most affected. The import and export volumes of major products hit by the tariff all fell to various extents, and the cargo throughput of these two ports dropped 1.9% and 3.4% year-on-year, respectively.
Of the Chinese ports, Shenzhen Port has the highest proportion of container throughput for the China-US shipping routes, which accounts for 27% of its overall container throughput. The trade war will dampen its business related to the international shipping routes by 4.5%, stated the report.
As trade friction continued to escalate, the throughput of Shenzhen Port fell 2.6% year-on-year to 6.9 million teus; with slow growth in exports and a withering container volume transferring to China and exporting to the US, the port saw its container throughput plunge 10.4% year-on-year to 4.82m teus.
Other issues which impacted growth and performance included increasingly strict environmental protection policies and a downward trend in global dry bulk cargo throughput.
Source: Port Strategy
A rift has opened up between Auckland Council and the Government over how the future of the city’s port will be decided.
Mayor Phil Goff says there’s a risk that a Government-appointed working group looking at the upper North Island ports might have pre-determined whether Auckland’s council-owned port could move, and if so where.
Goff said he put a “robust” view to the working group’s chair, former Far North mayor Wayne Brown, in a private meeting last week.
He said Brown’s public rejection of two potential locations identified by a council study didn’t give confidence, and the group didn’t appear to have enough time or resources to do a proper job.
The council on Tuesday approved a blunt letter to be sent to Brown, ahead of the council’s first formal meeting with the working group in just over a fortnight.
Goff favoured the eventual shift of the port from its current location on the downtown waterfront, but was unhappy with the approach being taken by the working group.
The council will tell the group that its priorities include protecting the value of Ports of Auckland, which last year paid it a $51.1 million dividend.
It is also telling the working group it wants a transparent, objective and evidence-based approach to reviewing the future of the ports in Auckland, Tauranga and Whangarei.
Auckland Council has conducted the most detailed work so far on the future of its port.
Previous mayor Len Brown funded out of his office budget the Port Future Study, which in 2016 found the port might not outgrow its current site in 50 years, but that work should begin on identifying alternatives, in case it did.
Before the 2017 elections New Zealand First advocated an early shift of the vehicle-import trade from Auckland to Northland’s port.
The coalition government including New Zealand First took a bigger picture approach, setting up the Upper North Island Supply Chain Strategy working group, in line with a request from Auckland Council.
New Zealand First MP and Regional Economic Development Minister Shane Jones who oversees the working group, has since been vocal on matters relating to the future of Auckland’s port.
At the start of November Jones said he would do all he could to head-off a planned multi-storey carpark building planned by Ports of Auckland, to house vehicles arriving in the port.
“Public statements have created the impression of pre-determination,” said the council in a letter to the chair of the working group Wayne Brown.
Brown has made public comment favouring a move to Northland, including an opinion column published in November 2017 before being appointed to chair the group.
“Imagine the Auckland waterfront without used cars getting the best views,” Brown wrote.
“Watch for self-justifying job-saving promises from Ports of Auckland to fend off any sensible moves like Sydney has made keeping the harbour just for cruise liners and sending cargo to Wollongong and Newcastle.”
The council’s letter pointed to comments by Brown.
“Indicating a strong preference for relocation of some or all of POAL activities to Northport prior to any analysis is unhelpful,” said the letter which Goff will sign.
“Any plans to move all or some of the Port’s functions requires the concurrence of its owners, the people of Auckland, through Auckland Council,” said the letter.
“I’ve already said to the chair, we’ve put a lot of work into two future options (Manukau Harbour and Firth of Thames) and you’ve dismissed this out of hand, which gives us no confidence,” Goff told today’s planning committee meeting.
The council has spelled out 10 areas it wants the working group to examine closely.
These include the feasible capacity of all upper North Island ports, as well as the climate change impacts of moving freight to and from the ports.
It wanted work done on the social and community impacts of any change, and how and when a future new port would be funded.
The council will have its first meeting with the government’s working group on December 13.
KiwiRail to investigate Marsden Point railway – Photo / File
KiwiRail has started work on geotechnical investigations along a section of the new route for the proposed rail-link to the port at Marsden Point in Northland.
KiwiRail Acting Chief Executive Todd Moyle says the scoping work will inform the business case for Northland rail currently being developed by the Ministry of Transport.
“We’ve held a designation for this rail spur for several years, and are very pleased to be now taking steps to determine how the line would be built,” says Moyle.
“These investigations will provide us with more detailed information about the design and potential construction methods for the link, as well as costs and timeframes.
“To begin with, we’ll be working at Mata Hill over the next few weeks, using a drilling rig to take samples from a number of locations,” he says.
These will bore up to 30 metres into the ground to remove samples for analysis.
“We are also investigating what associated works would be needed on the North Auckland Line to allow for more freight to be carried by rail to and from Northland,” says Moyle.
“The Government has indicated its strong support for the value rail delivers in the regions and the benefits it brings for New Zealand by taking trucks off the road, improving safety and reducing carbon emissions.
“The work we are doing in Northland is one of a number of projects underway to ensure we deliver stronger connections for a better New Zealand,” he says.