Transport Minister open to hearing ideas from meet of sectors in choked freight supply chain

By: Andrea Fox

Herald business writerandrea.fox@nzme.co.nz

Container handlers and freight, port and shipping operators will next week have another crack at gathering to find solutions to New Zealand’s supply chain congestion troubles, after a Covid-19 outbreak derailed a first effort.

A restricted number of sector representatives will brainstorm in Auckland on Monday at a workshop organised by the Ministry of Transport.

Transport Minister Michael Wood told the Herald the closed door workshop would discuss “potential industry-led, workable, immediate solutions to congestion issues”.

The workshop, postponed from earlier this month when Auckland was put into Alert Level 3 for a time, was part of the ministry’s stewardship role of the industry, he said.

As the Herald reported at the time, the workshop call was prompted by escalating concerns about container port shipping congestion, an imports choke at the Ports of Auckland, an empty container logjam, and how it will all hit New Zealand’s export season now under way.

Retailers and manufacturers have not only been experiencing lengthy delays in receiving import containers since October, they’ve also been hit in the pocket, with a special “Auckland congestion surcharge” imposed by shipping lines, on top of hefty rises in standard shipping costs attributed to Covid-19 disruption and a big spike in global consumer freight demand.

Freight sector sources earlier this month said organisations invited to the workshop had been “selected” and could send just one representative. The focus would be on finding immediate short-term measures to ease the problems, not a longer term fix.

Maersk, the world’s biggest container shipping line, expects the congestion to continue until at least June. It has halved its normal container ship calls to Auckland. A spokesperson has warned standard services will not resume until Auckland’s council-owned port has improved its productivity.

Meanwhile, Wood in response to Herald questions, said he had been hearing from the sector about empty container issues and the related increase in “detention invoices”.

“I have asked officials for further advice about options to assist and will consider any ideas following on from next week’s workshop.”

Detention charges are made by shipping lines when containers hired from them to import goods aren’t returned by the contracted date.

They must be returned, empty, to storage facilities nominated by the shipping company.

Due to the surge in consumer purchasing and ongoing container ship unloading issues, empty containers have been piling up – particularly at Auckland container depots.

The Customs and Freight Forwarders Federation said freight operators and trucking companies trying to book to “dehire” containers were finding there was no space at the storage facility they were contracted to return the boxes to.

Freight forwarders, who tended to pick up the initial costs, usually passed them on to importer customers, who passed them onto consumers, said federation chief executive Rosemarie Dawson.

She cited one member had been invoiced $8800 in detention charges for a container.

The federation has called on the Ministry of Transport to lobby shipping lines to provide a six month moratorium on detention invoices until the empty container issue is alleviated.

The shipping and container congestion also affects exporters. Containers which have been emptied of imports and are stockpiling in the upper North Island, aren’t available to exporters in the region and around the country when exporters need them for their products.

In response to the federation’s call, Ministry of Transport supply chain manager Harriet Shelton said the ministry was aware of the issues facing containerised supply chains.

“We continue to regularly engage key players on the issue across the sector, including (the federation).

“It is important to note that the ministry operates as a steward of the transport system.
“While it takes these concerns seriously, it is ultimately industry players who are best-placed to work out these commercial issues. Nonetheless, in line with our stewardship role, the ministry is acting (the workshop) to facilitate discussions between the market players who are responsible for these commercial decisions. Any of these solutions to short-term issues will be market-led.”