Auckland’s supply chain complications

Media release – POAL and NRC 14/11/19

Auckland’s supply chain complications

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

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

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

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

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

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

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

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

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

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

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

ONEHUNGA TRAFFIC IMPROVEMENTS PRAISED

National Road Carriers (NRC) chief executive David Aitken has praised the traffic improvements being delivered through Onehunga by the East West Link project, noting members have welcomed the Neilson Street Bridge demolition and lower replacement road.

“These changes have improved the sight lines for freight drivers and given them extra space for safe turning,” he says.

“The connection between Neilson Street and Onehunga Wharf Road is now working much more efficiently with our members currently noticing better traffic flows.

“The NRC is committed to keeping New Zealand moving and this new lowered road is making it easier for freight and other heavy vehicles to travel through this important freight hub.”

It is understood drivers of heavy vehicles are also appreciative that they are no longer required to stop for the light changes on the steep gradient that was a feature of the over bridge.

Recently commenced by the New Zealand Transport Agency (NZTA), the $1.25 billion to $1.85 billion East West Link project will ultimately provide a four-lane road connecting State Highway 20 at Onehunga to State Highway 1 at Mount Wellington.

“This will make it far more efficient and reliable for freight to move through this important industrial and manufacturing area.

“It’s great to see both the NZTA and Auckland Transport aren’t waiting until construction on the wider project gets underway and is getting on with creating early gains and improvements in the area.”

TREGURTHA DEFENDS BOOKING SYSTEMS

Pinnacle Corporation and MetroBox Specialised managing director Grant Tregurtha has spoken in defence of the booking systems introduced by Auckland container storage depots, stating recent congestion issues would have been even worse without their contribution.

His comments follow National Road Carriers (NRC) port committee chairperson Chris Carr’s recent criticism that the systems have imposed both costs and “logistical juggling” on transport operators while not delivering such promised benefits as reduced turnaround times.

“Turnaround times have reduced in Auckland, albeit not to the levels that we had anticipated,” counters Mr Tregurtha.

“A 24% increase in empty volumes last year through the Auckland container parks created congestion within all operational aspects of the depots, especially with gate co-ordination.

“Without the gate booking system the gate waiting times would have manifested into significant permanent delays that would have been measured in hours rather than minutes, so we see the booking system as a valuable tool in assisting the successful processing of volume at the gate.”

Mr Tregurtha says the booking systems provide key “visibility”.

“Pre system we were totally reactive to the request which was first notified to us when the truck arrived at the gate.”

He adds that the problematic issues at play need to be tackled on a collaborative basis.

“I firmly believe the difficulties the industry is facing will only be solved if we all recognise that it is an industry issue and work collectively and not as a direct result of failings with individual components of the process.”