Import waiting time reduces, but port’s search for skilled staff continues

Containers are loaded on rail wagons at Ports of Auckland ,where ships have been waiting up to 17 days to berth.
PORTS OF AUCKLAND/SUPPLIEDContainers are loaded on rail wagons at Ports of Auckland ,where ships have been waiting up to 17 days to berth.

New Zealanders are continuing to wait long periods for imported goods but delays at Auckland’s port are reducing, as the country’s biggest import port struggles to clear a massive backlog of freight.

Ships have been sitting in the harbour for over two weeks to unload their cargo, as Ports of Auckland grapples with a shortage of skilled operators and a global surge in demand for freight.

In late November, some shipping lines were waiting up to 17 days, but the port says the waiting time is now down to an average of eight days.

However, the delays are not helping retailers like Tony Gallagher, owner of Auckland flat pack furniture store Sofas and More, who was running out of stock.

‘’If I consolidated it all up, I could get it into six pallets and I can hold more than 70,’’ he said.

He said one shipment he was waiting on would arrive in the harbour next week but would not be unloaded for another 10 days.

Ships have been diverted to other ports to relieve congestion in Auckland.
JOHN KIRK-ANDERSON/STUFFShips have been diverted to other ports to relieve congestion in Auckland.

Most customers were understanding, but it was embarrassing to tell people they might have to wait two to three months, Gallagher said.

‘’In the weekend customers are coming in, they are looking at the showroom and going we’ll have that, and I’m going, I’m sorry I can take your pre-order and you can get it in the New Year and they go, oh no, we need it now and walk it out.’’

The Ministry of Transport has committed to help Ports of Auckland recruit overseas workers, which needs over 50 staff to work as crane operators, straddle operators, lashers and other stevedoring roles.

‘’As many other employers have found, recruitment is proving difficult. The labour market is strong, there is not a large surplus of suitable people looking for work,’’ port spokesman Matt Ball said.

The port had found a crane operator and several skilled straddle drivers within the country.

‘’We hope to have another crane crew in place before Christmas and a second by February next year, but recruitment – and training – will be ongoing for some time.

Chris Edwards, president of the Customs Brokers and Freight Forwarders Federation, said the crux of the problem was the staff shortage, not the port’s current automation project.

Freight forwarders say freight costs have risen up to six times what they were at the start of the year.
SUPPLIEDFreight forwarders say freight costs have risen up to six times what they were at the start of the year.

Lack of staff meant only a few of the port’s cranes could run around the clock and he urged the Government to give the recruitment process priority.

“This is an urgent matter and, given the significant cost to the economy, it’s our view that the New Zealand Government should be assisting in this recruitment, much like the Australian Government is currently trying to do in its primary sector.”

As well as delays, importers were also grappling with much higher freight costs.

Edwards said costs were three to six times higher than a few months ago, and overlaid with surcharges for freight going through Auckland.

”A container from Shanghai to Auckland in January, a 20-foot container, would have cost US$500. That price now is around US$3000. And it’s going to be the same for exporters.”

To find ways around the backlog, ships have been diverted to other ports. Cargo has been diverted to Tauranga, Napier, Timaru and Lyttelton, much of it going back to Auckland by road or rail.

One shipping line announced this week it would divert a vessel to Whangarei, but Edwards said the cost and difficulty of getting 2500 containers back to Auckland in time for Christmas would be high.

Importers have been told to plan for six to eight weeks delay in their supply chain.
IAIN MCGREGOR/STUFFImporters have been told to plan for six to eight weeks delay in their supply chain.

Delays in shipping goods from Asia are expected to continue well into next year, complicated by a looming global shortage of shipping containers and severe congestion in Asian trans-shipping ports.

Demand for space has risen so much that some ships are bypassing New Zealand altogether, a practice known as ”blank sailings,” as they try to make up time.

Mondiale Freight Services has advised its importer customers to book space on ships up to three weeks before sailing, and plan for a six to eight week contingency delay in their supply chain.

Exporters are also struggling. Air freight capacity has nearly halved due to the drop in passenger flights and rates have risen by 35 per cent, forcing them to compete for sea freight.

Simon Beale, chairman of the Council of Cargo Owners, which represents major importers and exporters like Fonterra, said the bigger players who had locked-in contracts were managing, but those buying on the spot market were paying big money.

He said most ships were still visiting New Zealand. ‘’There are a couple of ones that have a couple of blank sailings just to help relieve the situation in Auckland. But things are moving.”

Cargo that missed New Zealand would go to Australia and then make its way back. ”Missing out on a week is better than missing out on six weeks.”

However, as the fruit and meat export season looms early next year, exporters were nervous about a potential mismatch and shortage of cargo containers around the world, Beale said.

”Getting boxes in the right place is the key thing between now and that period of time.”

Kiwirail has also been working to help alleviate the congestion in Auckland, putting on extra trains have between Tauranga and Auckland to help clear Tauranga’s wharves, increasing capacity on its South Island train and adding a train from Auckland to Christchurch each weekend.

Meanwhile, a Government scheme to subsidise carriers of high priority air freight has been extended until March.

Air New Zealand has been allocated an average of 55 flights per week under the scheme, providing it with a government contribution of between $100 million and $145m towards cargo revenue over the next four months.

Cargo flights are now providing about half Air New Zealand’s monthly revenue.

Safety fears over 2700 truck trips from giant container ship in Northland to Auckland

There are safety and congestion fears for the road north of Auckland, after news a container ship diverted to Northland will result in nearly 2700 more truck trips before Christmas.

Whangārei’s Northport has agreed to unload 1340 containers off the ship Constantinos P, after congestion at Ports of Auckland meant they could not be unloaded there in time for Christmas.

The ship, run by ANL Container Lines, was originally scheduled to stop at Auckland’s port on December 5 but congestion relating to the Covid-19 impact globally and a lack of staff meant the date was delayed to December 22.

The diversion of Constantinos P from Ports of Auckland to Northport will result in 2700 extra container truck trips, National Road Carriers says. (File photo)
KIRK HARGREAVES/STUFFThe diversion of Constantinos P from Ports of Auckland to Northport will result in 2700 extra container truck trips, National Road Carriers says. (File photo)

Northport agreed to step-up to help, even though the 261m ship will be the largest berthed at the port and it is not fully equipped to unload it, chief executive Jon Moore said in a statement.

Constantinos P will berth at Northport on Sunday and cargo will be unloaded by mobile crane, ready to be carted by road from Thursday.

Northport has handled container ships before but the 261m Constantinos P will be its largest.
NORTHPORT/SUPPLIEDNorthport has handled container ships before but the 261m Constantinos P will be its largest.

But the plan has raised serious safety concerns for the 140km road between Marsden Point and Auckland, according to National Road Carriers chief executive David Aitken.

There will be 2680 extra truck trips on the road due to the ship’s diversion – with trucks having to travel from Auckland to Northport, and then back.

“There is poor roading infrastructure between Auckland and Northport, including two accident black spots at Dome Valley and the Brynderwyns,” he said.

This 2014 crash in the Dome Valley resulted in no injuries, but the road is notorious for crashes. (File photo)
SUPPLIEDThis 2014 crash in the Dome Valley resulted in no injuries, but the road is notorious for crashes. (File photo)

Truck drivers are already at capacity due to the Christmas rush, and they will be interacting with holiday traffic, Aitken said.

“The road is not perfect, and they are going to be sending guys [truck drivers], used to driving metro, on the open road.”

Aitken said there was a lack of alternatives to the road, with the North Auckland rail line currently closed by a $110 million redevelopment.

It is not due to reopen until January 11, although a link to the port’s location at Marsden Point has not been built.

While Northport said coastal shipping was being considered, Aitken did not know what ships would be available to take the containers.

ANL had found a solution to suit themselves, without thinking of the wider consequences, he said, and more work needed to be done to improve the supply chain in the North Island.

Northport has focused on log exports until now, but it wants to have a bigger involvement in the North Island supply chain. (File photo)
NORTHPORT/SUPPLIEDNorthport has focused on log exports until now, but it wants to have a bigger involvement in the North Island supply chain. (File photo)

Moore agreed, saying there was a need for continued central government investment in road, rail and coastal shipping infrastructure.

“While current supply-chain issues impacting the country might be unprecedented, they demonstrate clearly the need for a resilient and geographically-astute Upper North Island Supply Chain strategy that makes best use of the three existing ports.”

ANL has been contacted for comment about the road concerns.

In a statement, the company said it was taking a proactive solution to support retail and the economy.

“We are confident in the capabilities of Northport and glad that we have found this solution with them. Furthermore, we believe Northport will be a suitable alternative gateway for North Island customers.”

Transport and food two keys to reduce our carbon footprint

Transport is responsible for an average of 37 per cent of a Kiwi household's emissions.
DAVID WHITE/STUFFTransport is responsible for an average of 37 per cent of a Kiwi household’s emissions.

OPINION: Momentum is gathering in New Zealand’s efforts to cut greenhouse gas emissions and slow climate change.

Chair of the Climate Change Commission Dr Rod Carr is tasked with advising the Government on policy directions which, in his words, “support the transition to a climate-resilient, low emission Aotearoa” and include all regions and sectors.

Carr has encouraged community support and action to nudge Government to make ambitious and binding policy changes.

We can add to this momentum by calculating and reducing our own household emissions. The average New Zealand household’s biggest emitters are transport (37 per cent) and food (25 per cent).

READ MORE:
Flying to LA might cost more – so be it, says climate chief
Climate chief wants a road safety-style campaign to get us out of cars 
The climate cost of super-sizing snacks after exercise
How a city dweller slashed his carbon emissions
How to cut your contribution to climate change by offsetting your emissions

A useful tool is a carbon footprint calculator, https://www.carbonneutraltrust.org.nz/household-entry, developed by Carbon Neutral New Zealand Trust. It measures both greenhouse gas emissions and sequestration (storing carbon).

So if you get cracking to store CO2 by planting trees then the calculator will reward you by reducing the size of your overall footprint.

Transport

Cycling, particularly for short daily trips, can make a big dent in household emissions.
SCOTT HAMMOND/STUFFCycling, particularly for short daily trips, can make a big dent in household emissions.

New Zealand’s travel sector is highly dependent on imported fossil fuel so driving and flying less are among the most effective choices we can make to reduce our carbon footprint.

On the plus side over 80 per cent of our electricity comes from renewable sources and New Zealand is in a strong position to move on decarbonising the economy through 100 per cent electrification.

In the meantime Government and local authorities will need to both provide low emission public transport options and incentivise the uptake of electric vehicles supported by a wide network of EV charging stations.

Transport emissions can be reduced by:

  • Choosing to walk or cycle for short trips (a third of our trips are 2km or less).
  • Planning your car trips so you combine multiple errands into one.
  • Car sharing or using public transport for longer trips.
  • Switching your fossil-fuel car to an electric car or an electric bike.
  • Working from home and holding meetings and conferences online.
  • Lobbying your council to adapt urban design to prioritise safe walking and cycling and low emission public transport.
  • Managing with one less car in your household.

Food

Compost is one key to the highly productive vegetable garden here.
JULIET NICHOLAS/STUFFCompost is one key to the highly productive vegetable garden here.

What you choose to eat and drink also has a huge impact on the planet. An average New Zealand household in 2017 emitted 10,875 kg of CO2 through the food and non-alcoholic beverages consumed.

Beef, lamb and processed meat were, by far, the largest contributors to heating the planet, emitting 21.17 and 12 kg of CO2 equivalent per kilogram, respectively. Eating these frequently also has adverse health impacts by increasing the risk of heart diseases, cancer and diabetes.

Hundreds of millions of taxpayer dollars have been spent on treating these preventable diseases each year. By contrast, international research has highlighted the climate and health co-benefits of consuming a plant based diet such as fruit, vegetables, whole grains and legumes.

This diet is shown to be substantially less climate polluting, emitting only 1.2-1.8kg of CO2 equivalent per kilogram.

So, gradually swapping meat for more vegetables will not only benefit your wallet and family’s health but also help save the planet.

Another way of reducing your emissions is by planting trees in your backyard or on a local re-afforestation project. As trees grow they absorb more CO2 from the atmosphere. This of course applies to fruit and nut trees which will reduce your grocery bill as well.

Food emissions can be reduced by:

  • Reducing the amount and frequency of red meat and dairy consumed.
  • Planting fruit and nut trees.
  • Setting up a vege and herb garden.
  • Supporting locally produced food eg from farmers markets, box subscription schemes.
  • Joining a food matching community to share surplus and reduce food waste.

For more information on New Zealand emission estimates for common food items, visit Climate Change: a Quick Guide for Kiwis website.

Dr Yuki Fukuda and Carolyn Hughes are from Zero Carbon Nelson Tasman

Making shipping cleaner – is LNG the answer?

in International Shipping News 01/12/2020

As the global maritime sector tries to switch to liquified natural gas (LNG) as an alternative fuel source, there have been questions about how clean it really is and what else can be done to reduce the industry’s pollutive impact on the environment.

Since Jan 1, rules by the International Maritime Organization (IMO) – a United Nations body that governs shipping – came into force, capping the sulphur content of ships’ fuel at 0.5 per cent, down from 3.5 per cent previously.

This has driven the industry towards LNG, which emits virtually no sulphur.

“LNG has significant environmental advantages over traditional bunker fuels which are heavy fuel oils,” said Dr Victor Nian, a senior research fellow with the National University of Singapore’s Energy Studies Institute.

“LNG typically produces lower emissions of CO2 and virtually no nitrogen oxides (NOx), particulate matter (PM) or sulphur oxides (SOx),” he explained.

The natural gas has also become a more cost-competitive choice compared to conventional marine fuels, noted maritime expert Yap Wei Yim from the Singapore University of Social Sciences.

Dr Nian added that since LNG is a cleaner fuel, it could lead to the need for less maintenance as well as possibly longer lifespans for engines and other equipment in the long term.

He noted, however, that it would cost several million dollars per ship to adapt existing vessels to use LNG instead of heavy fuel oil, so retrofitting ships remains a barrier.

Not many ships currently run on LNG.

Singapore, the world’s largest marine refuelling hub selling about 50 million tonnes of bunker fuel per year, has been developing the infrastructure to support the use of LNG.

The Maritime and Port Authority of Singapore (MPA) licensed two LNG bunker suppliers – Pavilion Gas, which is a subsidiary of Pavilion Energy, and FueLNG, a joint venture between Shell and Keppel Offshore and Marine – and is expected to issue more of such licences in future.

“This has to be seen in the context of Singapore’s role as a major hub port in the world. While Singapore is well known as the world’s busiest container transhipment port as well as major port in terms of cargo tonnage, a significant proportion of port calls made at Singapore involves bunkering operations,” said Dr Yap, previously the head of strategic planning at MPA.

“In fact, more than 70 per cent of vessel arrivals measured by tonnage involved taking bunker in Singapore,” he noted.

Dr Yap also pointed to the “multiplier effects” brought about by the bunkering sector which contributes to other activities in the maritime cluster as well as the wider Singapore economy.

“It is thus important to remain relevant and responsive to the needs of shipping lines and making LNG fuel available in the world’s busiest port-of-call by vessel arrivals becomes crucial,” he said.

JUST HOW CLEAN IS LNG?

Yet questions have been raised about how clean LNG truly is.

The life cycle of greenhouse gas (GHG) emissions would take into account upstream activities such as production, liquefaction and transport, said Dr Nian.

“In a typical well-to-wake approach, there are studies suggesting that LNG’s advantages in terms of air pollution are not as great when compared with other fuels with regard to overall GHG emissions,” he said.

He noted that there might only be a difference of about 12 per cent when comparing life cycle greenhouse gas emissions between LNG and other marine fuels.

Dr Nian attributes this to methane slip – or the emission of unburned methane gas – when adapting engines from heavy fuel oils to LNG, although he suggests that engines designed specifically for the natural gas could improve this.

According to the IMO’s fourth greenhouse gas study released in August, there was a 150 per cent increase in methane emissions between 2012 and 2018, attributed to leaky engines on an increasing number of LNG-driven vessels.

Methane is 30 times more potent than carbon dioxide as a greenhouse gas.

The IMO does not currently regulate methane emissions, although bodies such as the International Council on Clean Transportation (ICCT) have called on it to do so.

There are uncertainties over what the “best” long-term option is in terms ensuring cleaner marine fuel, said Dr Nian.

He added that a viable short-term solution is the use of scrubbers – or exhaust gas cleaning systems which remove particulate matter as well as sulphur oxides and nitrogen oxides.

The cost of installation, however, could go up to US$4 million per vessel. Maintenance costs are also a challenge, in addition to the problem of waste disposal, he said.

Certain types of scrubbers release pollutants back into the sea after turning the sulphur dioxide into sulphuric acid, raising the ire of groups such as the ICCT.

The MPA has banned the use of such “open-loop” scrubbers within Singapore waters, and deemed their residues as toxic industrial waste.

ALTERNATIVES

Still, LNG looks to be the most competitive option right now in terms of price and environmental impact, said Dr Nian, although he noted that few ships today are able to run on LNG.

If major liners were to convert their ships or buy new ones that run on LNG, this could drive up its price, he said.

It also raises the question of whether there is enough natural gas to power the world’s shipping fleets, as well as the life cycle environmental impact of a wide-scale use of LNG.

There are other clean fuels in the works for shipping, including electrification, said Dr Nian, pointing to a seven-company Japanese consortium which earlier this year announced plans to develop zero-emissions electric tanker, as well as other alternatives such as biofuels.

Dr Yap pointed to other efforts aimed at making the maritime sector greener, such as the use of green building standards and eco-friendly construction methods in the development of new ports, as well as the use of monitoring systems to track greenhouse gas emissions and the quality of water and air.

Next year, MPA will launch its Maritime Singapore Decarbonisation Blueprint 2050, which will lay out plans on establishing the country as a sustainable maritime centre.

MPA and its partners will also set aside S$40 million under the Maritime GreenFuture Fund to be used for the research, test-bedding and adoption of low-carbon technologies.

Other observers said that LNG can be made even more eco-friendly.

In a blog post, energy research consultancy Wood Mackenzie pointed to “carbon-neutral” LNG, where carbon emissions associated with the upstream production liquefaction and transportation of the gas is offset through the purchase and use of carbon credits, which support reforestation or other renewable projects.

The firm noted that Pavilion Energy had issued a tender in March for 2 million metric tonnes per annum of LNG with specific criteria regarding its carbon footprint, which was won by Qatar Petroleum.

Ultimately, Singapore needs to evaluate whether the shipping industry here – including shipbuilding, maintenance, as well as the policy and regulatory infrastructure – can cope with a shift to LNG, said Dr Nian.

“Likewise, we also need to be aligned with the global industry movement towards LNG or other marine fuel to remain relevant as a major shipping hub,” he added.
Source: CNA

China to ease shortage of containers

in International Shipping News 07/12/2020

China will increase the supply of containers and tighten monitoring of the shipping market to further stabilize the rising logistics costs in international trade, a government official said.

Gao Feng, a spokesperson for the Ministry of Commerce, said during a news conference that shipments from China have played a vital role in stabilizing global supply chains and sustaining the global economy. However, some countries have been facing logistics issues due to the unequal distribution of containers, he said.

The Commerce Ministry will continue to work with related parties to provide more containers to the market, speed up the turnaround of containers, and help container manufacturers to expand productivity, the official said.

The China Container Industry Association said on Nov 27 that the surge in China’s exports and the low turnaround rate of containers from abroad have triggered an increased demand for containers of China origin since July. The association has urged the manufacturers of shipping containers to ramp up production and ease the shortage of containers.

Chinese container manufacturers have already extended the normal working hours from eight hours to 11 hours, and started making 300,000 twenty-foot equivalent units every month since September.

The association said that the COVID-19 pandemic’s impact on production in countries around the world and the nearing of Christmas, a peak season for export of Chinese products to Europe and the United States, were part of the reasons for the shortage of containers.

According to the Shanghai Shipping Exchange, the average China Containerized Freight Index stood at 1,198 on Nov 27, up 4.6 percent on a weekly basis. The index tracks spot and contractual freight rates from Chinese container ports for 12 shipping routes across the globe, based on data from 22 international carriers.

Shanghai has handled 238,000 TEU containers through the railway-to-port model in the past 11 months, up 79 percent compared with the same period a year ago, China Railway Shanghai Group said on Wednesday. More than 30,000 containers were handled by this mode in September, a monthly record, it said.

The multimodal transportation of containers by railway and connecting ports is being promoted as more cost-effective, safer and more environment-friendly, the group said, predicting that more than 250,000 containers will be handled through this model this year.

The increased shipping through the new transport model is just one reflection of the rebound in the total container throughputs at ports across China since the country largely controlled the COVID-19 pandemic.

According to Shanghai International Port Group, the total throughput of containers in Shanghai Port exceeded 40 million TEUs on Wednesday, marking the fourth consecutive year that the port broke the world record it set in 2017.

Nearly 15.5 million TEU containers were handled at the Tianjin Port from January to October, up 5.6 percent on a yearly basis, Tianjin Daily said in a recent report.

In southern China, the Guangzhou Port Group said it saw a container throughput of 15.8 million TEUs during the first nine months of the year, up by 1.5 percent on a yearly basis.

The surge in exports has also increased shipping rates, and containers in major freight lines have been booked up to 10 to 15 days before the shipping date, according to Guangzhou Daily.
Source: China Daily

Ports of Auckland hiring more staff to help with ‘unprecedented’ demand as ships wait eight days before being processed

About 10 ships could be seen at anchor in the Hauraki Gulf this morning as they wait to be processed by the Ports of Auckland. Photo / Niki Bezzant
About 10 ships could be seen at anchor in the Hauraki Gulf this morning as they wait to be processed by the Ports of Auckland. Photo / Niki Bezzant

Nikki PrestonBy: Nikki Preston

Herald reporter based in HamiltonNikki.Preston@nzme.co.nz

A photo has emerged showing the scale of the backlog of ships waiting to get into Ports of Auckland this morning as unprecedented and unexpected demand sees container ships stuck at sea with goods for an average of eight days.

Up to 11 container ships were anchored in the Hauraki Gulf waiting to be processed at Ports of Auckland at the weekend, but Ports of Auckland general manager of communications Matt Ball said that had now reduced to six.

The ships currently anchored are one bulk carrier, one car ship and four container ships carrying a wide range of goods which could likely include some Christmas presents.

All three upper North Island ports were busy and there were a further five ships at anchor waiting to go into Northport near Whangarei and five waiting to go into Tauranga, Ball said.

Yesterday the biggest container ship to ever berth at Northport, the 261m-long Constantinos P carrying 1340 containers, arrived. Up to 1000 trucks – travelling either at night or during off-peak traffic times – could be needed to move the cargo between Marsden Pt and Auckland from Thursday.

Ports of Auckland had already recruited an additional 15 people to help them process the containers more quickly and hoped to have one extra crane crew in place before Christmas.

“Our biggest problem is that we don’t have enough trained staff to handle the extra demand,” Ball said.

It was also ramping up the use of its robot straddle carriers help move more freight.

Prior to Covid, it was uncommon for Ports of Auckland to have any ships waiting to be unloaded and on the odd occasion when it did there would only be one or two at a time, he said.

“I think the largest queue previously has been when Brown Marmorated Stink Bugs were discovered on board car ships, which resulted in quite large delays to car imports. So this sort of thing only happens in exceptional circumstances, as we have this year with Covid.”

Ball said the delays were not unique just to New Zealand and were happening worldwide.

Demand between Asia and the US had also grown by more than 20 per cent, while New Zealand was facing “unprecedented and unexpected” demand.

The demand was expected to continue into 2021, with more than a month of back orders from manufacturers in China waiting to be shipped.

Last month, the Herald was contacted by a number of frustrated readers who told how they had been waiting for between four to six months for furniture to arrive from overseas as retailers including Freedom blamed impacts from Covid for delays at the ports.

Other retailers have also had to apologise to customers as the delays mean their pre-ordered stock won’t arrive before Christmas.

Explainer: Why can’t we get things to New Zealand?

The spectre of empty shop shelves looms large over the Christmas season due to ongoing international shipping delays to New Zealand.

While people have largely resumed almost-normal life, the global pandemic has wreaked havoc on several manufacturing nations such as Bangladesh, India, China and Guatamala causing issues with product supply.

But fewer ships and choked ports are also preventing goods from being imported and delivered to retailers.

So what are the issues that could result be delaying the arrival of your new couch or appliance?

Industrial action in Australia

Port workers in Australia have taken periodic strike action across key ports over a pay dispute.

While some strikes have been put on hold, new industrial action has been launched in November by tug boat crew.

Shipping channels continue to face a range of challenge getting products into New Zealand.
JOHN BISSET/STUFFShipping channels continue to face a range of challenge getting products into New Zealand.

But the strikes have resulted in ships scrambling to remain on schedule and missing some port visits to make up for lost time.

The tyranny of distance

The disruption at Australian ports has flowed through to New Zealand because many of our shipping services route via Australia. As a result, ships that can’t get into Australia have also bypassed New Zealand.MORE FROM
DEBRIN FOXCROFT • BUSINESS REPORTER

debrin.foxcroft@stuff.co.nz

New Zealand Food and Grocery Council chief executive Katherine Rich described this as “the tyranny of distance” at a time when shipping companies are trying to maximise profits.

Backlog at NZ ports

Goods that do make it to New Zealand often become part of a huge backlog at ports, particularly in the North Island.

Congestion has become so bad that some shipping lines have introduced a surcharge on cargo passing through Ports of Auckland, on top of shipping rates that are sometimes several times higher than usual.

There are a number of reasons for the backlog, including a Covid-19 related delay in a major automation project at the Ports of Auckland and a struggle to get the right staff to man the port’s eight cranes.

Demand for consumer goods has also increased 20 to 25 per cent compared to last year.

As a result, Ports of Auckland has been accused of overloading the Port of Tauranga with vessels there during its peak export season.

Reduced shipping to New Zealand means there is also a shortage of empty shipping containers needed for exporters to get goods out of the country.

Mainfreight managing director Don Braid told RNZ that the domestic freight network was “finite”.

“There’s only a certain number of trucks, trains and coastal shipping containers that you can have. So, what we are asking our customers to do is to order earlier, and have less expectation on quick delivery,” he said.

New Zealand Food and Grocery Council chief executive Katherine Rich says New Zealand suffers from a “tyranny of distance”.
SUPPLIEDNew Zealand Food and Grocery Council chief executive Katherine Rich says New Zealand suffers from a “tyranny of distance”.

Fewer flights

There are still significantly feweraircraft flying in and out of New Zealand than before the Covid-19 pandemic.

International flights out of New Zealand have dropped from about 600 a week to about 120, nearly halving air freight capacity.

This is particularly an issue for perishable goods like strawberries.

Limited production in some manufacturing countries

Production is ramping up in countries such as China, however, some are still struggling with controlling the Covid-19 virus.

Bangladesh, the world’s second largest garment manufacturer, is facing another wave of lockdowns this month.

This could cause a shortage of clothing around the world.

But it’s not all bad news. While Bangladesh and other manufacturing nations are still struggling with Covid-19, China has largely bounced back to pre-virus production levels.

‘Warning lights’: Exporters eye on Covid 19 global shipping congestion as outlook dims

All eyes now on Covid-19 shipping disruption impact on New Zealand's exports. Photo / File
All eyes now on Covid-19 shipping disruption impact on New Zealand’s exports. Photo / File

By: Andrea Fox

Herald business writerandrea.fox@nzme.co.nz

“Philosophical” may be the best way to sum up how New Zealand’s biggest export sectors are viewing warnings Covid-19 global shipping disruption will worsen, with Auckland port’s congestion just one of several flashpoints around the world.

Maersk, the world’s biggest container line, has told the Herald import supply chain congestion in the upper North Island is likely to worsen and not ease until the second quarter of next year, and that 10-day ship waits for unloading at Auckland will also make the coming export season “challenging” due to container exchange logistics.

Dairy sector leader Fonterra, the world’s sixth-biggest dairy company by revenue and New Zealand’s biggest company, along with the $9 billion meat export sector and horticulture market sweetheart Zespri, all say they’re watching the situation closely but are prepared.

But one primary industry exporter isn’t so sanguine.

Disruption at ports is “significant” and supply chain issues, now manifesting, were always one of the biggest risks importers and exporters faced from Covid-19, said the commentator, who declined to be named.

The challenges were not fully understood by the public or the Government and would affect not only import product availability, but New Zealand’s export-led recovery.

“It’s a global phenomenon so there’s not much we can do but hang on for the bumpy ride.”

Maersk’s caution comes as shipping industry information forwarded to the Herald from Ports of Auckland in defence of criticism of its congestion issue advises of new Covid-related delays unloading reefer (refrigerated) container ships at major China port Xingang, and Australian ports precincts – mainly Sydney – gridlocked by heavy cargo volumes as the effect of previous industrial action cascades.

Auckland is the country’s main import gateway. This week, with the Christmas sales season closing in, ships were waiting 10 days to be unloaded. Shipping lines have imposed congestion surcharges of up to US$500 ($713.96) per container on importers.

Imports value in the year to end October was $58b, down 10 per cent on the previous period, according to government figures.

Port of Tauranga is the main marine exit for New Zealand’s exports, valued at $60b in the year to October, up 1.2 per cent. Container ships avoiding Auckland have been offloading big volumes of cargo there just as the main export season gets under way.

The dairy export season has started and will continue into January. Still to come are frozen meat exports, fruit, vegetables and, from March, kiwifruit.

A Port of Tauranga spokeswoman said “no alarm bells” about the export season outlook had been sounding, though there were “warning lights”.

“It’s not just an imports issue. It’s everyone trying to avoid Auckland.”

Exporters who usually used Auckland port were turning to Tauranga, dropping containers at Port of Tauranga’s inland South Auckland port Metroport, which was full.

KiwiRail was putting on more trains south from Metroport to Tauranga from next week, she said.

Asked for Tauranga port’s view on the forecast challenge to exporting, she said: “It’s very difficult to forecast anything, there are so many unknowns.”

Fonterra, the world's biggest dairy exporter, hopes its shipping contracts will avoid Covid fallout. Photo / File
Fonterra, the world’s biggest dairy exporter, hopes its shipping contracts will avoid Covid fallout. Photo / File

Fonterra global supply chain director Gordon Carlyle said shipping containers had been in short supply but the farmer-owned company had been able to source what it needed to support exports.

“What we’re seeing is the global manufacturing industry having to work overtime with stronger-than-expected consumer demand. As a result, the freight industry is also working hard to keep up and port strikes in Australia, coupled with local supply chain issues related to constraints at the Port of Auckland, have exacerbated matters.”

Fonterra’s partnership with Maersk and Kotahi, New Zealand’s largest supply chain collaboration, founded by Fonterra and meat company Silver Fern Farms in 2011, had proven “hugely valuable” in managing the shipping disruption, he said.

Fonterra is the world’s biggest exporter of dairy product.

Zespri, with revenue of $3 billion in 2019-2020, said it would continue to use a mix of shipping types next year while working with long-term shipping and port partners. Most kiwifruit is exported through Tauranga port with some exiting via Northport in Northland.

Kiwifruit exporter Zespri hopes to pull off another Covid shipping disruption go-around next year. Photo / File
Kiwifruit exporter Zespri hopes to pull off another Covid shipping disruption go-around next year. Photo / File

Chief global supply officer Alastair Hulbert said the 2020 season shipping programme had been completed successfully through a mix of container and reefer vessels.

“…We are well placed to commence shipping our fruit to markets next March and to manage any impacts should they arise.”

Meat Industry Association chief executive Sirma Karapeeva said container supply had been an issue for the sector in recent years “however as New Zealand’s second-largest goods exporter we have the experience and expertise to manage the situation”.

“Although we anticipate the situation worsening next year, the agility and resilience our companies have shown throughout the Covid-19 crisis means we are well-placed to mitigate any risks to our supply chains.

“We will continue to monitor the situation to ensure we are prepared in the event of any deterioration.”

Product values of NZ exports in 2019:

• Dairy, eggs, honey: US$10.7 billion (27.9% of total exports)
• Meat: US$5.3 billion (13.9%)
• Wood: $3.3 billion (8.7%)
• Fruits, nuts: $2.2 billion (5.9%)
• Cereal/milk preparations: $1.5 billion (3.9%)
• Beverages, spirits, vinegar: $1.4 billion (3.7%)
• Fish: $1.2 billion (3.2%)
• Machinery including computers: $1 billion (2.6%)
• Miscellaneous food preparations: $886.9 million (2.3%)
• Modified starches, glues, enzymes: $815.5 million (2.1%)
• New Zealand’s top 10 exports accounted for about three-quarters (74.3%) of the overall value of its global shipments.

Automation problems behind Auckland port delays – wharfie

From Checkpoint, 5:12 pm on 18 November 2020 Share this 

An Auckland wharfie estimates Ports of Auckland is half as efficient as it used to be because of problems switching to an automated system to load and unload freight containers.

Some ships are waiting up to 12 days to unload at the port, and many retailers fear their shelves will not be full as they approach the festive season.

Listen to the full report here

On Tuesday, Ports of Auckland general manager of communications Matt Ball told Checkpoint Covid-19 had caused delays to the full roll-out of automation, but he said the system was working efficiently and was not to blame for the problems.

Ball also said the ports were short of about 50 staff, including crane drivers, straddle operators and lashers. He said the company’s performance at the moment was not good enough.

A worker with decades of experience at the Auckland port, who Checkpoint has kept anonymous to protect his identity, said the company was not being upfront about problems with automation, and customers were getting a raw deal.

“Before automation the Ports of Auckland regularly got best performing port in Oceania. Since automations kicked in, it hasn’t. So I can only put it down to automation and the lack of workability with the system,” he said.

“Covid is a very convenient excuse. They had problems with automation long before Covid kicked in.”

In a statement, Ball said automation was going well, but the worker who spoke to Checkpoint disagreed.

“They’ve got issues with communication between the crane builders and the Ports of Auckland. The software packages – numerous times they have pushed back the go-live dates because the system is just not working. Automation is a major problem.”

“They’ve split the terminal in half, effectively using one half for storage for the automated straddles and the other half for man straddles. So when the auto straddles aren’t working properly you’ve got half a terminal that can be accessed.

“It’s not just the straddles. They’ve got three new cranes down the end of the berth they’re having issues with. They can really only use one crane at a time when they’re discharging the ship because if they try to use all three, the software shuts down.

“Basically, once they’ve discharged the ship they then have to turn around and move the ship round to the other, what we’ll term, older cranes, so that they can load them.

“So it’s double handling and moving ships. It’s crazy.”

Efficiency at the port was not that good, he said. “Fifty percent, if that, on what it used to be.”

Acknowledging the understaffing problem, he said: “The whole system breaks down if you just don’t have the guys to do it.”

Retailers are desperate to get stock as the Christmas shopping season begins. The wharfie said at this time of year the service provided by Ports of Auckland was “sh–“.

“If I was a business owner waiting for a container, I’d be furious.”

He said he was angry to hear what Ball had told Checkpoint about the port’s problems.

“It doesn’t matter what I say. It doesn’t matter what other people say. The company will say that’s not true.

“I think the time has come where the port has got to be answerable to the people of Auckland. They seem to be a Teflon-coated company, or they think they are. They have a responsibility to people.

“I used to be a proud water-sider.”

He said more workers would help solve the situation, but trying to do that before Christmas would be problematic.

“Do you train them up quickly to get them onsite, in which case then do you have non-competent workers working there just to fill the void?

“Look at the history in the last two years, you’ve had two deaths. I would be scared, I wouldn’t want to be working in an environment where you’ve got people working beside me that don’t have … the experience, and experience speaks volumes down there.

“Will it be fixed before Christmas? I honestly couldn’t answer that… the software system, unless they can get that up and running, I can’t see it happening.

“The ports have brought this on themselves really, and it’s a shame.”

Ports of Auckland’s board chair, the chief executive, and the minister for infrastructure all declined to be interviewed by Checkpoint.

Ports of Auckland said it was working with the Ministry of Transport to resolve the backlog.

The ministry also declined an interview, but in a statement said it was leading a cross-agency group of government officials who were watching the situation closely.

It acknowledged heavy congestion of containerised shipping, particularly at the Ports of Auckland, where there had been “delays due to staff shortages and a recent fatality of a port worker”.

Congestion at Asian and Australian ports has added to the problem, it said, and there was limited capacity to shift the containers to rail and road freight.

The ministry said the International Air Freight Scheme was being used to import time-sensitive, critical goods, including medicines.

The Supply Chain Interagency Group is comprised of the Ministry of Transport, Maritime New Zealand, Ministry of Foreign Affairs and Trade, Ministry for Primary Industries, and NZ Trade and Enterprise.

Supply Chain On Brink Of Overload Says National Road Carriers

Thursday, 19 November 2020, 4:34 pm
Press Release: National Road Carriers

The New Zealand supply chain is on the brink of overload and it looks like the upcoming peak imports season may push it over the edge says National Road Carriers Association (NRC) CEO David Aitken.

“Worldwide supply chains are in disarray,” says Mr Aitken. “The current pandemic affects everything, and the transport and logistics sector is in the thick of it. Bigger and better resourced countries have higher levels of critical infrastructure to cope with this, but it does not take much to bring New Zealand Inc. to its knees. Shipping companies and ports across the country are already struggling to keep up with consumer demand and the worst is yet to come.”

Mr Aitken says the problems have been brought about by a combination of factors including booming exports from North Asia and not enough vessels, industrial action across the Tasman causing shipping delays of up to eight weeks, COVID-19 and Ports of Auckland and Port of Tauranga facing some major challenges of their own. With berth schedules currently suspended at Ports of Auckland, not to mention the introduction of automation and staff shortages, and more vessels docking at Ports of Tauranga, receival and delivery times are constantly changing at both ports with little or no notice.

Mr Aitken also says airfreight schedules are not what they once were. “There are few passenger planes arriving with freight in their holds. The airfreight that does arrive is much more expensive. That urgent part you needed from the warehouse in Singapore is not available now. It will be shipped by sea and arrive in six weeks. If you need it in a hurry for Christmas, then you should have ordered it in October.

“Consumers and producers cannot count on getting what they want when they were used to having it. Not planning ahead will have consequences because the stock not ordered early will not be available on time.”

He says the transport sector is bearing the brunt of these issues and is facing big challenges. Road transport is the one thing that binds the whole machine together but operators are struggling with lost capacity, poor productivity and combined truck and administration costs.

“If it were not for the trucking industry, the Ports would close within days. By association, so would rail, and container depots because with no throughput the shipping lines would soon bypass New Zealand altogether. Importers and exporters would suffer terribly and so would the economy.

“The road transport industry is carrying and supporting the whole supply chain and working alongside sea, air and rail freight to keep the country moving. If you’ve got it, a truck delivered it.”

Mr Aitken says the supply chain industry – the Ports, the empty container yards and the freight industry – need to work together to understand each other’s issues and communicate better.

“There needs to be clarity around roles and responsibilities and we need to stop blaming each other, which brings about the increased costs to the carrier when it’s no one sector’s fault. Communication needs to improve and, when there is an issue, we need to identify it quickly and talk to the people who know how to fix it. Better alert systems need to be put in place.

“Unfortunately instead of working in with the road transport industry, the Ports and empty container yards are adding costs and constraints like reducing the free time for containers in their yards, adding penalties for non-delivery and increasing vehicle booking system (VBS) costs all when we need to reduce the pressure on the supply-chain. These network providers need to talk to the carriers who keep them afloat and engage some very simple but very effective measures.

“Currently all the costs fall on the carriers and that will filter down to the consumer because the carrier cannot wear those mounting costs any longer. This will make New Zealand less competitive on a global scale and, with failing imports on the horizon, a lack of co-operation between supply chain sector parties will be to blame when the system overloads and stops completely.”