Southern manufacturing companies facing uncertainty

Ceri Macleod, general manager of Sorec, a professional body representing the manufacturing engineering sector in the southern region.
SUPPLIEDCeri Macleod, general manager of Sorec, a professional body representing the manufacturing engineering sector in the southern region.

Southland manufacturers are among many nationwide struggling to get supplies into the country in a timely fashion so production can continue and orders met.

Otago-Southland Employers’ Association chief executive Virginia Nicholls said the hold-up of shipping containers at Auckland Port was a significant issue for many manufacturers.

Manufacturers who imported stock and ingredients from overseas needed it arriving on time so work could continue.

“Now they have to hold a bit more because they don’t know when the container is coming, so there’s a lot of uncertainty out there,” Nicholls said.

There were “not too many” manufacturers who weren’t affected.

Among those facing challenges were engineering companies and food companies.

Ceri Macleod, general manager of Sorec, a professional body representing the manufacturing engineering sector across the southern region, said a number of its members had reported delays in receiving goods from overseas.

“This puts additional pressure on the manufacturing engineering sector, particularly in the southern region,” she said.

“Delays can have a significant impact on production and ability to fulfil orders on time.”

Some of the issues could be addressed by pulling together as a network, but it placed extra pressure on its members and their businesses.

Gareth Lyness, sales and supply chain manager of Blue River Dairy, an Invercargill business that exports infant formula from sheep, goat and cow milk, said the company sourced most of its ingredients and packaging from New Zealand.

But some came from overseas and “what used to take four weeks takes eight weeks … or it could take 12.”

Despite not having to stop production at any stage, a number of shipping containers with plastic tops for infant formula cans were delayed at the port. But Blue River had other products it was able to manufacture to cover the delay, he said.

Gareth Lyness of Blue River Dairy [file photo].
JOHN HAWKINS/STUFFGareth Lyness of Blue River Dairy [file photo].

The company had bought in more “safety stock” so it was sitting there in case ingredients didn’t arrive.

“There’s a cost to that but the effect of not doing it and not producing is much greater.”

The company’s logistics team had been able to manage the situation by dealing with suppliers and using multiple ports and shipping lines, he said.

Fonterra global supply chain director Gordon Carlyle said it was experiencing some challenges getting a very small amount packaging and ingredients into the country.

“However, our ability to adapt our operations and product mix means our manufacturing operations are not impacted. At this stage there are no supply issues at our Edendale site.”

Lance Coupland, managing director of Coupland’s Bakeries said it had machinery coming from America that would be two months late and its suppliers of coconut and condensed milk had experienced constraints in getting it into the country, but the company hadn’t been too badly affected.

Retailers were also struggling to get enough product into the country to sell, with the issue highlighted before the Christmas buying rush.

“It’s been a significant issue, no doubt,” Nicholls said.

“And it’s going to take a long time to solve all of this, it won’t be solved in the next few months.”

US port shutdowns could affect NZ exports: freight group

Major import gateway Ports of Auckland is in the process of replacing its manned straddle cranes with automated ones. The project was unable to be finished because of lockdown, but the port hopes to complete it in a few months.
CHRIS MCKEEN/STUFFMajor import gateway Ports of Auckland is in the process of replacing its manned straddle cranes with automated ones. The project was unable to be finished because of lockdown, but the port hopes to complete it in a few months.

Potential port shutdowns in California could hamper New Zealand export shipments to the US, adding New Zealand’s freight congestion woes.

More than 700 dock workers have contracted Covid-19 at four major ports in Los Angeles and Long Beach, creating a labour shortage.

The Los Angeles Times reported that a bottleneck of vessels was developing at LA’s twin ports and an urgent campaign had started to get workers vaccinated.

However, a shutdown was possible for a period of time and it could have significant issues for New Zealand exports as well as imports from the US, Customs Brokers and Freight Forwarders Federation president Chris Edwards said.

Edwards said there were normally several monthly port calls to New Zealand from the US; in January there had been one because of congestion at Auckland.

That lack of connection and the California backlogs would ultimately ‘’affect the export market going back up to the States, with apples and produce and those sorts of things.”

Port congestion is a worldwide phenomenon because of supply chain disruptions due to Covid and a global surge in demand for consumer goods.

Ports of Auckland’s own logistics issues have compounded the problem, leaving ships in the harbour for up to two weeks at one point before they could berth.

On Friday Maersk announced its weekly OC1 service between New Zealand and the east coast of the US would temporarily bypass Auckland until April, but it would continue to visit Tauranga.

While the freight issues have left many importers, retailers and manufacturers waiting for orders, Edwards said there was a ray of light if Ports of Auckland could recruit and bring in experienced foreign crane drivers.

The port was left short of crane and straddle drivers when workers returned home during lockdown, and Edwards said he understood the port was making good progress on that front.

If it was successful, the port’s backlog could be cleared in a matter of weeks, he said.

Shipping vessels skip Auckland as cargo congestion continues

Congestion at Ports of Auckland has driven freight costs to historically high levels and created shortages of some goods.
CHRIS MCKEEN/STUFFCongestion at Ports of Auckland has driven freight costs to historically high levels and created shortages of some goods.

A shipping line is diverting one of its regular services away from Auckland because of its massive port cargo snarl-up.

The congestion is causing gaps to appear on shelves, as retailers wait for stock to be unloaded at Ports of Auckland, the country’s main gateway for sea freight.

In response, shipping lines are getting creative. Major shipping line Maersk has just announced that one of its regular services to Auckland, the OC1, will skip Auckland for the next 11 weeks.PlayUnmuteCurrent Time 0:02/Duration 1:05Loaded: 60.78% FullscreenCHRIS MCKEEN/STUFF’Lumpy’ supply chain – Ports of Auckland faces troubling times

OC1, which links New Zealand with the US east coast, was being diverted because of ‘’continued port congestion and delayed vessel berthing in New Zealand’’.

Simon Beale, of the Council of Cargo Owners, said Maersk’s decision would keep it on schedule, and ‘’also it might give Auckland a chance to get back on target as well’’.

The shipping line said it would continue to serve Auckland in taking export cargo by rail to Tauranga.

New Zealand’s cargo problems are related to a global surge in demand for goods and factory supply issues due to Covid.

As a result, shipping lines have been changing tack to meet demand and shipping containers are locationally out of balance around the globe.

Ports of Auckland has had its own Covid problems, with some skilled staff returning overseas over lockdown and an unfinished automation project.

Lengthy delays for Auckland-bound cargo have seen a number of ship divert to other ports. This week the Tianjin Bridge berthed at Northport, offloading over 900 containers, following a much larger visit in December by the Constantinos P.

The Constantinos P put Northport to the test, with around 1000 containers loaded on trucks and taken to Auckland, an operation which took more than a week
NORTHPORT/SUPPLIEDThe Constantinos P put Northport to the test, with around 1000 containers loaded on trucks and taken to Auckland, an operation which took more than a week

Diversions to Tauranga risk also creating congestion there. The port had record container numbers in October and December and is using around 40 Auckland-bound trains a week.

But a port spokesman said it would happily take more train services to speed up movement across its own wharves.

Beale said the Tianjin Bridge’s visit would provide relief for many importers. ’’It probably saves a 12-day delay in Auckland, maybe.’’

However, the congestion issue was ongoing. ’’Things aren’t getting worse,’’ he said, but they were not expected to improve until the second quarter.

The big challenge now was to ensure there were enough shipping containers in the right place in time for the export season, he said.

Meat and dairy exports were already into their high season and the fruit season would begin next month.

Freight companies were already giving established customers priority with containers, and two shipping line with their own cranes were sending ships expressly to pick up containers.

Pamela Bonney, of transport firm LW Bonney and Sons, said everyone was trying to find new ways to operate but there were ‘’very few levers to pull’’.

‘’It’s putting a significant amount of costs and stress across all of industry, whether it’s the shipping companies, the ports, whether it’s the transport companies, freight forwarders – it’s costing everybody more to do the same job.’’

Northland rail line back in action after upgrades completed

The running of a test train last week means the rail line between Whangārei and Swanson in West Auckland is back in action after an upgrade funded by the Provincial Growth Fund.A freight train crosses the new Bridge 100, on Helleyer road, 15km from Helensville.  The new bridges have a concrete ballast tray deck which requires less maintenance than the old bridges, and can carry up to 25-tonne axle loads.

A freight train crosses the new Bridge 100, on Helleyer road, 15km from Helensville. The new bridges have a concrete ballast tray deck which requires less maintenance than the old bridges, and can carry up to 25-tonne axle loads. Photo: Supplied / KiwiRail

KiwiRail said that in seven months, five bridges were replaced and the tracks in 13 tunnels lowered to allow the passage of hi-cube shipping containers that are standard in international shipping.

KiwiRail Group chief executive Greg Miller said that at its peak the project had more than 600 people working on it.

“In addition to the new bridges and improved tunnels, the team laid 30,000 new sleepers and nearly 63,000m3 of ballast to provide a more secure base for the track.”

More than 400,000 hours went into the construction work, but it was not over yet.

“While we are delighted that this section of the line is up and running, there’s some more intricate work to the tunnel linings required. Additionally, to allow greater train speed and axle weight, over time we will be replacing another 10km of rail and laying more than 100,000 sleepers,” Miller said.Tunnel 2, about 15km north of Helensville on the North Auckland Line, has the least clearance of any of the 100 tunnels on the KiwiRail network. Here, workers are re-profiling the lining to enable hi-cube containers on wagons to pass through.

Tunnel 2, about 15km north of Helensville on the North Auckland Line, has the least clearance of any of the 100 tunnels on the KiwiRail network. Here, workers are re-profiling the lining to enable hi-cube containers on wagons to pass through. Photo: Supplied / KiwiRail

For now, re-opening the line was a “big achievement”, he said.

It would support importers, improve sustainability, and help with KiwiRail’s efforts to address the freight backlog, Miller added.

“Fewer trucks on roads also means less congestion, lower road maintenance costs, and greater road safety. It also means fewer emissions. Every tonne of freight carried by rail produces 70 percent fewer greenhouse gas emissions than the equivalent freight carried by road.”

Miller said the re-opening of the line was a good opportunity to remind people to take care around the railway line and to always look for trains before crossing the tracks.

KiwiRail does not yet have a spur directly to Northport but the PGF funding has allowed it to begin buying land along the route.

In the meantime, freight is trucked from the port to the rail line in Whangārei, then carried by rail, south to Auckland and other destinations.

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.