MoT hands off on Auckland port productivity and auto project – but not eyes off

By: Andrea Fox

Herald business writerandrea.fox@nzme.co.nz1

The Ministry of Transport says it’d be overstepping its boundaries to comment on Ports of Auckland’s controversial and prolonged container terminal automation project – but it sounds happy to stick its nose in.

Responding to Herald questions about what, as a “steward” for New Zealand’s freight and supply chain sector, it thinks about the five-year duration of the problematic project so far as Auckland Inc struggles with highly costly shipping and freight congestion originating at the port, the ministry kicks off citing commercial versus policy sensitivities.

“The Ports of Auckland automation project is a commercial venture funded by the port and Auckland Council. The Ministry of Transport is focused on policy and we do not get involved in operational matters,” said a statement attributed to Harriet Shelton, supply chain manager.

But then: “While the Ministry of Transport does not have a role to comment on the duration or delays of the project, from a general perspective we do want to acknowledge the frustration and impact to market players experienced across the supply chain in Auckland, especially over the past few months.”

Shelton said the ministry would also be willing to get involved in an independent review of the automation project on completion, ordered recently by Auckland Mayor Phil Goff and councillors.

Frustrated importers, retailers and freight forwarders claim the Auckland Council-owned port company’s current half-manual, half-automated terminal operating system and stevedore shortage means it wasn’t prepared for the upswing in Covid-19-driven global container shipping last year. The port is the main gateway for imports and ships have been waiting up to 14 days to unload since October.

The port company and the council have refused to reveal the cost of the automation project to date. Sector watchers and the Maritime Union of New Zealand claim it is now well north of $400 million. NZX-listed Port of Tauranga, which has had to handle imports diverted from Auckland during its busy export season, claimed last week Auckland’s port is using just 31 per cent of its crane capacity to unload container ships.

The union claims Auckland is the only port in the world to try to operate with manual and automated systems at the same time. Maersk, the world’s biggest container shipping line has withdrawn half its normal calls to Auckland and has said it won’t resume standard service until productivity improves.

“The ministry would be willing to contribute our knowledge and experience to this (automation project) review as needed, should the review scope explore the effect on New Zealand’s supply chain,” said Shelton.

“While the project is one of many the port has included in their long-term plan to improve productivity, the Ministry of Transport has a strong interest in supply chain resilience.

“We continue to support, at a high level, any measures and investments that will improve productivity at our ports, and is interested in any enhancements to our transport system.”

A ministry attempt to gather supply chain participants in Auckland on Monday to try to find short-term solutions to the freight congestion was cancelled for the second time due to a change in that city’s Covid alert levels.

What the port company says is the final stage of the automation project – civil works at the terminal – was due to start this month after full implementation delays it has attributed to Covid-19 disruption, industrial action at Australian container ports, and a stevedore and crane driver shortage. At last update with the Herald, it still expected civil works to start next month – but with provisos.

Asked if the ministry was monitoring the Auckland port project, Shelton said it was “in regular contact with Ports of Auckland on matters including the status of its automation project, and have been providing the Minister (Michael Wood) with updates based on their advice.

“One of the key pre-conditions for completing the automation project (taking the terminal yard from half-to-full automation) is ensuring sufficient productive capacity (including workforce) to cover disruption during the transition period.”

The ministry had been assisting the port company “with their work to source international crane drivers to lift productivity to that necessary level”.

MoT defined its role as a “steward” of the New Zealand freight supply chain as enabling market players “to operate in a transport system which delivered economic prosperity, environmental sustainability, health and safe people, inclusive access and resilience and security”.

“The ministry does not have immediate powers or a remit to lobby on behalf of the industry, although government intervention could be considered in situation of market failure, where international connections were severed and posed a national security risk to New Zealand. Initial work is under way on a national long-term freight strategy. We’ll have more to say about this over the coming months.”