Ports of Auckland to build hydrogen production and refuelling facility

In a first for Auckland, Ports of Auckland has committed to build a hydrogen production and refuelling facility at its Waitemata port. The company, and project partners Auckland Council, Auckland Transport and KiwiRail, will invest in hydrogen fuel cell vehicles including port equipment, buses and cars as part of the project.

Ports of Auckland Chief Executive Tony Gibson said “We have an ambitious target to be a zero emission port by 2040. In order to meet that target we need a new renewable and resilient power source for heavy equipment like tugs and straddle carriers, which are difficult to power with batteries. Hydrogen could be the solution for us as it can be produced and stored on site, allows rapid refuelling, and provides greater range than batteries.”

Ports of Auckland will fund the construction of a facility which will produce hydrogen from tap water. The process uses electrolysis to split water into hydrogen (which is then stored for later use) and oxygen, which is released into the air. Demonstration vehicles will be able to fill up with hydrogen at the facility, which will be just like filling up a car with CNG or LPG. Hydrogen is used in the fuel cell to create electricity which powers the car. The only by-product of the process is water.

“If this trial is successful”, said Mr Gibson, “the technology would have a very wide application. It could help Auckland and New Zealand towards energy self-sufficiency and our emission reduction goals. Trucks, trains and ferries could also run on hydrogen – something which is already being done overseas – which would be a significant benefit for the community. Hydrogen powered vehicles are quieter and emit nothing more than clean water.”

The project partners will provide technical support and will purchase hydrogen fuel cell vehicles for the project. Global hydrogen experts Arup are also helping support this project through the development, design and delivery phases.

Mayor Phil Goff said, “I welcome this trial. It is a first for New Zealand and shows Auckland’s desire to lead on climate change action and meet our ambitious emissions reduction targets.

“With 40 per cent of emissions in Auckland coming from our transport system, alternative energy sources to power vehicles, such as electric and hydrogen, are critical to meeting the target of global warming to 1.5 degrees.

“With infrastructure in place, hydrogen has the potential to power our buses and other parts of our vehicle fleet both reducing global emissions and cutting back on air pollution in Auckland such as in Queen Street where carbon levels are very high,” says Mayor Phil Goff.

Auckland Council’s Chief Executive, Stephen Town, says, “We’re proud to collaborate with the Ports of Auckland, Auckland Transport and KiwiRail on this innovative hydrogen project – a first for New Zealand. It is important for organisations like ours, as signatories to the Climate Leaders Coalition, to continue leading on climate change action; it’s also important for us to push the boundaries with ambitious projects that demonstrate leadership here in Auckland. Trialling new technology to reduce emissions and signalling a smarter economic future is important for our city’s people, places and prosperity.”

KiwiRail Acting CEO Todd Moyle says KiwiRail is delighted to be part of this ground-breaking project. “KiwiRail is committed to a sustainable future and has set a goal to be carbon neutral by 2050. While rail is an inherently sustainable form of transport with 66% fewer carbon emissions than heavy road freight, new fuel sources like hydrogen have enormous potential for the future of transport in New Zealand.

“Just weeks ago, two hydrogen-powered trains with a range of 1000km per tank began operating commercial services in Germany. If successful with passengers, there is no reason why the next development could not be hydrogen-powered freight trains.

“Joining forces with Ports of Auckland in this project will allow us to explore how KiwiRail could use this new technology as we deliver stronger connections for New Zealand.”

Auckland Transport Chief Executive Shane Ellison says AT is committed to clean technology and is very interested in the possibilities of hydrogen power. “This could be part of the answer for our fleet of buses and harbour ferries. The idea of a vehicle which only produces water as a by-product is very exciting.”

The project is currently in the planning phase, and Ports of Auckland is about to start stakeholder engagement before applying for resource consent in early 2019. The facility is planned to be operational by the end of 2019.

An aerial view of Ports of Auckland from the west.
SUPPLIED
An aerial view of Ports of Auckland from the west.

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.

A council commissioned study found shifting the vehicle import trade, could lose Auckland $1 billion
BEVAN READ/STUFF
A council commissioned study found shifting the vehicle import trade, could lose Auckland $1 billion

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.

 

Twyford reassures Kiwis on road safety after NZTA revelations

Transport Minister Phil Twyford made a ministerial statement in Parliament reassuring the public about the NZ Transport Agency and road safety, and revealing some more detail about investigations.

It comes after he announced last week that he was initiating a regulatory review of the agency which was set up 10 years ago to combine three functions as the transport funder and builder, and safety regulator.

Twyford said there had been systemic failures by the agency to properly check operators who certified vehicles as safe for the road – Stuff has reported on one death, cracked truck towbars, and suspension of certifiers.

Phil Twyford has been dealing with the crisis at the NZ Transport Agency.

ANDY JACKSON/STUFF
Phil Twyford has been dealing with the crisis at the NZ Transport Agency.

Out of the 850 “open files”, or unresolved safety problems, the worst had been resolved but there were still 28 that were being urgently investigated, Twyford said.

There had been 157 files considered high priority, 370 classed as “orange”, and 345 “yellow”.

Twyford said he has been assured the highest priority cases had been dealt with by formal compliance action either completed or under way.

“Injuries on our roads are not the price we pay to travel. They are unacceptable and preventable,” he said.

“I’m disappointed that NZTA has failed to carry out its regulatory functions.”

He had appointed the Ministry of Transport  to review those functions, and given what the public and Government now knew, it was appropriate to appoint external advice, he said.

Law firm Meredith Connell took up the job near the end of September to review the files and the agency was moving quickly to rectify lapses. The cost of engaging the law firm so far was $400,000

The agency had failed to properly check operators who certified vehicles or operators, as safe for the road, and when problems were identified there was often no follow up, Twyford said.

Staff had been redeployed with reduced focus on the regulatory role over the past decade with an emphasis on education and encouragement rather than enforcement, made worse in 2014 when it lost staff from its heavy vehicle compliance team.

Twyford said the systemic failure of one of the government’s most important agencies over several years was unacceptable

As previously reported, the failures of the agency have led to one fatality in a car, and cases of metal fatigue in truck towbars.

Automation and capacity update from Ports of Auckland

22 November 2018

Operational Update

Automation and Capacity Project – Update

Our project to transform Fergusson Terminal which will provide future capacity is well underway and visitors to the port will have seen a lot of activity and changes including civil works, construction workers and sections of tarmac undergoing renewal.  What has been happening recently:

A-Strads

Visitors will have seen the new blue “A Strads” now assembled on the north end of the terminal, undergoing a comprehensive range of testing in readiness for Go-Live next year.

 

 

 

 

Road Exchange

The work to upgrade the truck lanes has been completed and the next stage is installing the gates and fences required to keep truck drivers and A Strads separated.

Pre-gate Kiosk Screens

These have been updated. Drivers now need to complete some additional steps at the kiosk.  This means that when automation goes live, the drivers will already be familiar with the new system.

Reefer Gantries

The large shiny frames of the new reefer gantries at the southern end of the Fergusson terminal are now complete and sign-off for the reefer operation is expected before the end of this year.  In the meantime, we have been able to use the area as valuable stacking space for dry containers.

New Container Cranes

There was a lot of media interest and celebration with the arrival of our three new container cranes on the specialised delivery vessel Zhen Hua 25.

It was a great sight to see them sail into the harbour in the early morning. These cranes, which have quad-lift capacity (they can lift four containers at once), are now in place on Fergusson North Berth and will be commissioned early 2019, after a range of testing required to integrate them into our current systems.

 

Hatch Platforms have now been installed on all container cranes – these allow the ship’s hatch covers to be stored above the ground, freeing up space around the cranes for container handling.

Lash Platforms In a first for New Zealand, we’re installing lash platforms on all our cranes and our new cranes have them already fitted.  This will make stevedores’ job safer, as they can work above ground away from moving straddles.

Rail OCR (Optical Character Recognition)

A frame, fitted with multiple cameras, has been placed over the rail line to capture images and recognise container numbers arriving and leaving by rail. This system provides a high degree of accuracy and enables rail planners to quickly check on any “exceptions”.

Supply Chain Challenges

There are a range of challenges being experienced throughout the supply chain. We are automating Fergusson Terminal to increase capacity and productivity, whilst at the same time experiencing unprecedented volume demand. It is a bit like having heart surgery while playing rugby!

While we’re carrying out the automation work our terminal capacity is actually reduced, putting pressure on our operations especially during peak import season.

We are undertaking this transformation to ensure we are ready to accommodate Auckland’s rapid growth in freight demand.  We’ll be able to handle more containers on the same land, but it also means some changes in the way cargo owners and trucking companies interact with the port.

Greater planning and different ways of operating are needed throughout the freight supply chain. The port operates 24/7 and yet the wider supply chain largely works 24/5 at best, and often 9 to 5 Monday to Friday.

Extended operational hours are needed at distribution centres, empty depots and importers’ and exporters’ premises to maximise the capacity of the whole supply chain.  It is much the same as an internet connection – you’re currently on dial-up and want to upgrade to fibre, but you only get the best speed if you’ve got fibre end-to-end.

We have been engaging with importers, exporters, trucking companies and freight forwarders to discuss the changes and welcome you to make contact to discuss any issues you may have.

Further Progress

Our automation go-live date is late 2019.  There are a number of civil, operational, engineering and I.T. projects being undertaken, some of which need to be completed in a specific order and others are more flexible.  This means that we are continually adjusting the timing of work.  We will keep you updated on progress and changes.

Please contact us if you have any questions or would like to discuss any ideas or concerns, at any stage.

For more information contact

Customer Service

P: +64 9 348 5100 Ext. 1

E: customerservice@poal.co.nz

 

For VBS queries contact

Transport Co-ordinators

P: +64 9 348 5100 Ext.2

E: driversassist@poal.co.nz

 

 

Ports of Auckland have joined the Climate Leaders Coalitiona collection of business leaders who have each committed to act on climate change.

Ports of Auckland is the first port in the world to make this commitment and the first port in New Zealand to be CEMARS® certified. Joining the coalition contributes to the ports promise to become zero emissions by 2040.

More information on the Climate Leaders Coalition can be found here. Read the CEO Climate Change Statement here.

 

Auckland’s supply chain complications

Media release – POAL and NRC 14/11/19

Auckland’s supply chain complications

National Road Carriers Association and the Ports of Auckland are combining forces to promote change in the supply chain to improve delivery times and prevent delays.

This initiative has come about because of supply chain capacity issues which were highlighted following an accident at Ports of Auckland in August. Imported freight has taken longer to deliver and exporters have encountered delays getting their goods away, leading to frustration all round.

“The supply chain is running at capacity, so unexpected problems can have a domino effect,” says David Aitken, National Road Carriers CEO.
“At its heart, the problem is Auckland’s growth. The supply chain needs to evolve and we’re all going to have to change the way we work to prevent future problems. Better planning and coordination are the key.”

“We’re letting stakeholders know what causes hold-ups and we’re working with partners to improve our end-to-end processes,” he added.
Situations contributing to delays can arise at any stage in the supply chain, sometimes occurring thousands of kilometres away from New Zealand.
“In the last 12 months over half of all container ships arrived at Auckland late (often as a result of bad weather), causing congestion,” says Craig Sain, Ports of Auckland’s General Manager Commercial Relationships. “This makes it hard for us to staff the terminal properly, causing delays.”

Labour scheduling issues at the port are made worse by a shortage of labour in Auckland, which also affects the trucking industry.

The port is currently installing an automated container handling system to address this problem, but the work required to install the system has reduced terminal capacity by about 20%, adding to congestion. This situation will remain until late 2019 when the project will be completed.
“With reduced space in the terminal and more containers coming in due to growing Auckland demand for freight, it is taking us longer to service trucks visiting the port,” says Mr Sain.

Another problem is that getting containers off the port can be delayed because there is nowhere for the containers to go. The port works 24/7 and has capacity at nights and weekends, but often distribution centres, importers warehouses and empty container depots are closed at these times.
“In the past working 9-5, Monday to Friday was fine, but now Auckland has over 1.5 million people it is no longer feasible,” says Mr Sain. “The whole industry needs to be able to work 24/7, not just the port and carriers, and this means distribution centres and importers need to be open nights and weekends to receive imports.”

The road freight transport industry is caught in the middle says David Aitken.  “Importers don’t want to pay for weekend or afterhours work but they also don’t want to pay to hold containers at the port or container depots as a result of their limited business hours.”

“We are storing containers at freight hubs longer, which adds costs for double handling, or are delivering goods later than originally expected because of holdups. We’re also facing higher costs because of Auckland’s congestion, costs which could be avoided by working 24/7,” he added.

The solution is going to come through a combination of technology, greater co-ordination and a move to 24/7 working throughout the supply chain.
As well as investing in automated container handling, Ports of Auckland is working with National Road Carriers Association to update its processes and business rules to minimise manual intervention and incentivise off-peak container movements. Last minute freight moves will become a thing of the past, with all movements having to be planned in advance.

“As a port we have a key role to play and we are trying to educate other players in the supply chain so that they understand the need for change and what they can do to make the process more efficient,” said Craig Sain. “Ultimately, these changes will benefit New Zealand through the fast, efficient and cost-effective delivery of freight.”

New Zealand needs to decarbonise transport to get on track with climate goals

The best way to reduce carbon emissions from the transport sector in New Zealand is to switch to alternative fuels and decarbonise the electricity grid. Personal behaviour change will have an impact, but not enough, a new study has found.

According to the chief executive of Infrastructure New Zealand Stephen Selwood, a new report from thinkstep has found that activities such as car sharing, teleworking, home deliveries and using more public transport will save around 15 per cent of carbon emission compared to the near 90 per cent reductions needed to meet climate targets.

“Many people think that enabling alternatives to the car is the best way to reduce carbon emissions in New Zealand,” Selwood said.

But thinkstep’s report calculates that a shift to electric, biofuel and hydrogen-powered vehicles has potential to reduce carbon emissions from consumption by up to 88 per cent by 2050. The Creating a positive drive: Decarbonisation of New Zealand’s transport sector by 2050 was launched on Thursday.

A shift to electric, biofuel and hydrogen-powered vehicles “has the potential to reduce carbon emissions from consumption by up to 88 per cent by 2050,” the report says.

In order to achieve this shift, renewable energy generation would have to double in capacity, and the country would have to see the conversion of five per cent of agricultural land to the production of biofuels.

Encouraging ride-sharing and the use of public transport would have benefits that are more achievable in a short space of time than a complete switch to zero emission transport, but they would only change a small proportion, up to 29 per cent, of total journeys,  the report says.

Everything helps

The government could encourage people to share rides by establishing carpool lanes, and create a pricing model to encourage electric vehicles.

Transport scenarios for New Zealand in the report for 2050 relative to 2015 (savings include domestic greenhouse gas emissions only)

“The role of government and business, as we see it, is to make these low-carbon choices easy and convenient,” says the report.

“While we still depend on fossil fuels, ride-sharing has the potential to be a quick win for New Zealand on climate change,” Dr Jeff Vickers, technical director of thinkstep and lead author of the report said.

“It reduces carbon emissions and road congestion immediately, and the carbon story gets even better as we move to electric vehicles. This is something that could happen virtually overnight, as all you need is a smartphone.”

A year ago Prime Minister Jacinda Ardern set out a plan for New Zealand to transition its electricity grid to renewables by 2035. Between 50 to 60 per cent is already delivered by hydroelectric power. Ms Ardern’s long-term goal is for New Zealand to achieve zero carbon emissions by 2050.

Currently, according to climate action tracker website, New Zealand’s Nationally Determined Contribution target under the Paris Agreement of a 30 per cent reduction from 2005 levels by 2030 is rated as “insufficient”. In other words, it is not consistent with holding warming to below 2°C, let alone limiting it to 1.5°C, as required, and is instead consistent with warming between 2°C and 3°C.

Part of the reason is that transport contributed 19 per cent of all greenhouse gases emitted in New Zealand in 2015. A reduction in transport emissions by 90 per cent would reduce New Zealand’s total gross GHG emissions by 17 per cent.

But the road to decarbonising transport is harder than that. “When considering the carbon footprint of products and services that New Zealanders consume – rather than including those that are destined for offshore markets – transport’s contribution jumps to over 40 per cent,” Dr Vickers said.

The government is currently considering a Zero Carbon Bill. The target of net zero emissions by 2050 is supported by 91 per cent of respondents to a consultation for the bill, while even more, 96 per cent, support the establishment of an independent watchdog, a Climate Change Commission, like the UK’s.

The government realises that it’s cheaper to take action sooner rather than later.

Light commercial and heavy vehicles are assumed in the report to run on hydrogen in the future, yielding a 64 per cent drop in emissions using today’s electricity grid, or 91 per cent for a fully renewable grid.

In this future, biofuels would be used to power ships and planes because of their higher energy density. But biofuels have their own social and environmental impacts: air pollution, displacing crops, and a reduction of biodiversity.

See the full report here.

8 November

National MPs from all over the country have lined up at Parliament this morning to submit ‘save the highways’ petitions signed by thousands of their constituents.

National MP Amy Adams announces she will stand for National Party leader.

Selwyn MP Amy Adams said more than 1000 people signed her petition for the State Highway 1 link between Christchurch and Ashburton to go ahead. Photo: RNZ / Rebekah Parsons-King

They are concerned that major roading projects National announced are being canned by this government in favour of more public transport options or “minimal” safety upgrades of existing roads.

Examples include the Auckland east-west link, the Napier to Hastings expressway and the construction of a four-lane state highway one link between Christchurch and Ashburton.

MPs for the electorates north of Auckland hope to save the ‘four-lanes to Whangarei’ project, with Rodney MP Mark Mitchell saying the uncertainty was having a huge impact on people’s well-being.

“The cancellation of these projects not only reduces road safety, do not only take away the economic opportunities they would create, but it’s also creating a lot of stress.

“There’s a human toll to the people who actually live on these designated routes and have a lot of uncertainty created from very poor decisions, I feel, at central government level,” Mr Mitchell said.

An image of the completed East West roading project.

The proposed east-west motorway link in Auckland was scrapped by the government last year. Graphic: Supplied / NZTA

Eight petitions have been delivered, with thousands of signatures from the MPs constituents.

Amy Adams, the MP for Selwyn, said the State Highway 1 link between Christchurch and Ashburton must go ahead.

“The volume of traffic on those roads is making them not only more dangerous, but more and more congested, obviously effecting productivity,” she said.

Ms Adams said she had more than a thousand people sign up in a short time.

Bay of Plenty MP Todd Muller and Coromandel MP Scott Simpson submitted on the Katikati to Tauranga four-lane link, which it announced in 2017 and said Labour must commit to.

They want a grade separated connection from Omokoroa onto State Highway 2 and a Katikati bypass.

Few questions were asked by the government MPs who sit on the transport committee, however National MP Paul Goldsmith asked a number of questions about the impact of the regional fuel tax on the MPs’ communities.

He said there was little thought for people outside of Auckland who would never benefit from the expensive public transport projects the government was funding in the city.

Pain at the petrol pump: tradies, transport businesses and average people hurting

Small business owners and average income earners in Tauranga are feeling the pain at the petrol pump as fluctuating fuel prices – which recently hit record highs – strain budgets.

Tauranga transport companies and tradies have reported big hits to their bottom lines, while a budget adviser says average people are raiding grocery budgets to pay for petrol.

“It hurts,” said courier company owner Ian McGonigal, who drives from Tauranga to Gisborne and back each day, on rising diesel prices.

“It used to cost me $50 to $55 a day 12 months ago, and now it would cost me $80.

“I have had to increase prices to compensate.

“I think the oil companies are ripping us off.”

AD Electrical owner Andre Buitendag said increases were cutting into profits.

“Some of it can go back to customers but I have prearranged contracts with set mileage and I have to absorb the cost.”

One four-year contract had mileage at $1 for diesel, which now cost $1.50.

Two Tauranga moving company owners said they had put hourly rates up – $5 and $10 an hour – due to increased diesel prices and a road user charges.

Mover Allan Crossley said he was dialling down petrol consumption at home, too.

He was thinking about trading in his Ford Falcon for a hybrid “just to save some fuel” and seeing his daughter in Hamilton less.

He said the Government was “not helping the situation” by increasing fuel taxes.

Motorist Paul Anderson said prices would have dropped if Kiwis had not just become used to paying $2 a litre.

”We think we are getting a deal but we’re still getting ripped off.”

Kirsty Morrison of One21 Recruitment said she advised job seekers looking at a role across town to consider petrol prices, transport and traffic before taking it.

Tauranga Budget Advisory Service manager Diane Bruin said the increases were especially hard on average workers who were not on bus routes and could not car pool.

“Food would be the initial hit of accessible money as it is usually what is left, however, this is really stretching an already stretched budget.”

The Ministry of Social Development said rising living costs were reflected in a rise in demand for emergency grants.

Anyone struggling to afford to get to work should get in touch.

Minister for Transport Phil Twyford said fluctuations in the global crude oil price had a far bigger influence on New Zealand petrol prices than minor excise increases.

The international price of crude oil has risen by more than 40 per cent this year, while 2018 excise increases will cost the average household 83 cents a week – 40c for those on the lowest incomes.

The funding would allow $5 billion more in transport investment over the next decade to “get our cities moving, create new economic opportunities in our regions, and save lives on our roads”.

The Government wanted to see a competitive market for petrol so Kiwis were not paying more than they had to, he said.

”We are concerned that the margins of fuel companies have increased over the last three weeks to record levels. We’ve passed a law that will allow the Commerce Commission to compel petrol companies to provide information on pricing.”

Representatives of BP, Z, Mobil and Gull all said their fuel was priced competitively and increases were largely due to factors outside their control, particularly the price of crude oil and the New Zealand exchange rate.

Over the last few weeks, crude oil prices had dropped and those savings had been passed on to customers at the pump, they said.

The general manager of Gull NZ, Dave Bodger, was scathing of Twyford’s claim of increased margins, saying the minister did not have reliable data on which to make that claim.

“I fear the minister is confused. Over the last three weeks, our margins haven’t gone up.”

He welcomed the Commerce Commission inquiry, provided it was even-handed and surveyed the industry as a whole.

He described government fuel taxes as “the poisoned cherry” on the cake.

New Zealand Taxpayers’ Union executive director Jordan Williams said politicians cried crocodile tears about pain at the pump when most of it was caused by tax hikes.

”What makes petrol taxes particularly loathsome is they are regressive – disproportionately hitting the poor and those who can least afford it.

“While alternative transport options might apply in our large cities, for much of regional New Zealand there is no choice.”

– Additional reporting Samantha Motion

AA Petrol watch on fuel prices

– In the last fortnight prices for 91 dropped from the near record highs of $2.49 per litre
– Whether prices would continue to fall “remains to be seen”
– Government taxes accounted for about 43 per cent of the retail price or $1.07 cents a litre
– Fuel prices influenced by exchange rates and the cost to buy and import the product.

National fuel prices as at October 25:
91 Octane – 238.9
95 Octane – 247.9
Diesel – 177.9

National fuel prices as at September 24:
91 Octane – 240.9
95 Octane – 249.9
Diesel – 180.9

– Source: AA Petrol Watch

Quake-hit Wellington wants biggest ships

The November 2016 quakes put Wellington’s container cranes out of action for 10 months. Now CentrePort is looking at investing to accept bigger container ships. But not everyone agrees, Thomas Coughlan reports.

Wellington’s CentrePort is at a crossroads. Flush with cash after more than $170 million of earthquake insurance payouts, the port now has an opportunity to reposition itself for the future. But its proposal to dredge the harbour entrance to welcome in much bigger container ships is being challenged by those worried it will waste money on ships that never come. However, the quakes have also ironically proven the worth of keeping ports open to provide a back-up if road and rail fail.

Even before the earthquakes, CentrePort’s future was uncertain. Container ships are getting bigger and bigger and Wellington runs the risk of falling behind.

The port currently supports ships with a capacity of 4500 containers, half the capacity of the Port of Tauranga, which hosts the 9640 container Aotea Maersk, the largest container ship to visit New Zealand.

The port has long had an eye on dredging the entrance to Wellington Harbour to allow the port to host ships with up to 6000 containers. The plan was put on hold after the earthquake, but is again on the agenda as the port recovers.

But figures in the industry question the wisdom of such massive capital outlay. If trade tensions bubbled over, the project could become a white elephant, forcing CentrePort, and its owners, the Wellington and Horizons Regional Councils to bump up port fees.

Detractors say the port should stick to what it’s good at: providing services for the 10 Cook Straight ferry sailings it hosts each day. They say attention should be paid to resilience and making sure that when the next big one hits, the main link between the North and South Islands is not cut off.

Wellington’s future has country-wide implications. Ninety-nine percent of New Zealand’s imports by weight arrive on ships and the Government is keen to increase the amount of coastal shipping in New Zealand as part of a push to take trucks off roads.

This is likely to form part of the Government’s second-stage General Policy Statement on Land Transport, which is due next year.

Scraping the bottom 

Shipping is an industry of maxims. Speak with anyone for long enough and they will give you one or two inviolable rules about how the industry operates.

CentrePort CEO Derek Nind is no exception. Speaking to Newsroom he said the major trend he had experienced in his career was the size of ships increasing.

“In my 25 odd years all we’ve seen are container ships getting bigger,” he said.

In shipping, capacity is measured in containers, which are known as TEUs or “20-foot-equivalent”. The harbour currently [handles] ships carrying roughly 4500 TEUs. With dredging, it could host ships of up to 6000 TEUs.

Container ships have grown massively in size. In 1996, the largest ship in the world carried 6000 TEUs. Now, new classes of container ships carry up to 21,000 on ships each as long as four rugby pitches.

Those sorts of ships are unlikely to visit New Zealand anytime soon. The current international trend for hubbing means that they tend to operate on routes between major trading centres, like Shanghai and Singapore.

Ships that stop over in New Zealand tend to be much smaller, although they are growing. Since 2016, Tauranga has hosted visits of the the 9640 TEU Aotea Maersk. Though relatively small by international standards, in 1996, it would have been the largest ship in the world.

Nind says the improvement would encourage ships sailing round New Zealand to call in to Wellington. In shipping terms, this is known as intermediacy and diversion. Wellington had good intermediacy to ships passing along the cost. Ships could call in to port and potentially only face a four or five hour diversion from their regular route.

“Intermediacy is if you’re calling at Tauranga and you’re calling at Lyttelton we’re a four hour deviation,” he said.

But dredging is expensive. Costings done under the leadership of former CEO Blair O’Keefe came to around $40 million. It wouldn’t be extensive. Wellington is a naturally deep harbour, but for a lip at the entrance, which bars larger ships from stopping at port.

With inland transportation costs currently high, Wellington is well placed to take advantage of logistics firms looking to [cut] costs by shipping products as close to their end destination as possible. CentrePort can take advantage of road and rail connectivity in the Lower North Island and ferries to the top of the South Island.

More maxims

But the programme has some detractors.

Annabel Young, Executive Director of the New Zealand Shipping Federation, thinks the port should stick to what it’s good at: inter-island ferries.

She backs this up with another maxim: “Ships go where the cargo is”.

“This is all driven by ‘where is the cargo and how much is there?,” she said.

Young is a former National MP and her sister is Nicola Young, a Wellington City Councillor and mayoral candidate. Young is concerned that without adequate cargo in Wellington, the port will be forced to recoup the cost of dredging by raising port fees.

“If they do the capital work and the ship doesn’t turn up, consumers will pay,” she said.

The question of cargo is a touchy one in New Zealand. After the Kaikoura earthquake, cargo destined for CentrePort was offloaded elsewhere before making its way to Wellington by truck or train.

CentrePort has taken some of that business back, although it still has some way to go. In the 2016 financial year it offloaded 131,645 TEUs, this more than halved to  51,750 in 2017 before bouncing back to 84,755 this year.

But the port is focused on making sure it’s the nexus for shipping in the Lower North Island, partnering with KiwiRail to develop rail connectivity. Nind said the port wants to be “the port of choice for Central New Zealand.

It has developed rail hubs in Whanganui and New Plymouth and leverages Wellington’s strong transport connections with Palmerston North. This encourages cargo to travel via Wellington, rather than Napier or other ports.

But even with these connections, Young says there is still a limit to the amount of shipping that will pass through the Lower North Island, based on the size of local industries. These are dwarfed by industries based in the highly productive “Golden Triangle” of Hamilton, Tauranga and Auckland.

Roll up and roll on… and another working group.

Young believed attention needed to be directed to the Cook Strait ferries.

The port is currently part of a working group comprised of the Wellington City and Regional Councils, ferry operators, and NZTA about the future of the Cook Strait connection.

The working group is currently looking at the possibility of combining the Interislander and Bluebridge terminals into one and looking at ways to ensure the ferries can continue to service both Wellington and Picton after a major earthquake.

State Highway 1 technically runs over Cook Strait, which means the Government and NZTA have a strong interest in making sure the connection is resilient. It services seven million tonnes of cargo and 1.2 million passengers each year.

Nind noted that the port was quick to have both the Interislander and Bluebridge terminals up and running after the Kaikoura earthquake.

Wellington — and the whole country — will hope the Port fares similarly next time.