Frustration rising over Ports of Auckland’s import cargo snarl up

Ports of Auckland’s vexed automation project is again in the spotlight as ship congestion and import delays are blamed for pushing struggling retailers closer to failure, added freight costs and jamming the Port of Tauranga with diverted vessels in its peak export season.

Auckland Business Chamber chief executive Michael Barnett said he was getting regular messages from businesses struggling to recover from Covid and frustrated at delays of up to 10 days in receiving goods because of the snarl up in the upper North Island logistics chain.

An email, seen by the Herald, from a Northshore business which relies on distributing imports to retailers nationwide, warns the business could fail.

Auckland is New Zealand’s main import port.

Port of Tauranga chief executive Mark Cairns, whose port is handling “a huge amount” of diverted container cargo, doesn’t mince words.

“The congestion we are facing is due to issues at Auckland’s port”.

Tauranga, the country’s main export port, is a heavy user of rail and is working with KiwiRail to get more trains taking imports back to Auckland.

“But I don’t think this is going to get better quickly,” said Cairns. Christmas commercial trade would “absolutely” be affected, he said.

Some users blame the issues at Auckland’s port on continuing problems with implementation of its five year old container terminal automation project, now not due to go fully live until the end of March.

But they would not be named, fearing an access backlash from the Auckland Council-owned port for their criticism.

At least six shipping lines are this month imposing “Auckland port congestion surcharges” of US$400 to US$560 per 40 foot container.Industry reports say vessels continue to experience “considerable”delays and heavy congestion at Auckland, which has “led to significant disruption and extra costs for carriers”.

The port company itself says container ships are waiting 8-10 days to berth. But it says that’s because they are arriving late at Auckland due to pressure on global shipping from Covid-19 disruption, the hangover from port labour strikes in Australia, and changed import patterns.

Port spokesman Matt Ball said by mid-August 70 per cent of ships were arriving 7-10 days late in Auckland.

He rejected sector claims that failures in the automation project – the first by a New Zealand port – was to blame for the congestion.

“I can very strongly respond that is not correct. Automation is actually working well. While we have labour shortages which are impacting the speed at which we can handle ships, the speed at which we can handle trucks is exactly the same on the automation grid as the manual grid.

“Yes it’s taking longer to get ships in and unloaded but we are getting containers off the wharf in record quick time.”

Ball said half the container terminal operation – that involving trucks – is so far automated, while the other half – which involves direct crane work on ships – is still manual.

The port was rapidly trying to employ 50 stevedores and expected to have them in place by Christmas, he said.The port would train people who did not have experience.

The port has eight cranes – three of which are new. But only three are working days and two at nights due to the labour shortage. The port was starting to make inroads into the backlog and a software issue last week only affected operations for “a little while”, Ball said.

The first part of container terminal automation had been due in March this year, he said.

Covid disrupted global shipping and lockdowns caused pent up demand, the port’s own systems to protect its workers slowed operations, and a surge in global demand for shipping space with aviation cuts, along with a spending spree in the domestic economy by Kiwis unable to travel, had combined to delay the project.

“We never had a quiet time to do the work at the southern part of the (terminal) infrastructure.We couldn’t kick off automation until June when we had our first ship through there, then things picked up in July and we were stuck with half the terminal automated and half manual. That takes more resources.”

The port company will not say how much the automation project is costing, citingcommercial sensitivity.Sector observers claim it’s running into several hundred million dollars. The port has significantly reduced its dividend to Auckland ratepayers due to its growth investment programme.

The Herald has asked the Auckland Council for the automation cost to date.

Auckland Business Chamber’s Barnett said the port could have done much better in its public messaging and transparency about the issues. People needed to hear how automationwould “reward” stakeholders.

“Will it mean faster service and lower costs? All of that should have been spelled out.”

Maersk, the world’s biggest container shipping line, said eight of its vessels on the Oceania to East Coast North America route have bypassed Auckland since September 1.

This is one of three Maersk services that calls at Auckland. The other two have not done bypasses, but have been sailing late and had extensive delays, said head of Oceania Export Market, My Therese Blank.

She said the surcharges were to recover added operating costs.

“Bunker cost – for speeding up the vessels and recovery delay. Due to the current situation at Ports of Auckland with 10-12 day delay and berthing windows being suspended, we need to perform port omissions (bypasses) to recover schedule both in Auckland and other ports.”

Lower port productivity also limited container exchange at the terminal, negatively impacting Maersk’s ability to site containers to demand locations, she said.

The surcharges were also to recover transhipment costs to get cargo back to Auckland and increased equipment and container positioning costs from arranging alternate modes of transport.

“We have been forced to truck empty containers to Auckland to supply exporters with containers to meet export demand.”

Ball was confident Auckland would be able to win back trade lost to Tauranga “as soon as we get over this rough period”.

He declined to comment on the congestion charges. No cargo volume figures were available.

There is a global shortage of containers due to Covid disruption and sector observers say there is a large number of empty boxes in Auckland’s container parks, unable to be moved out because of supply lines congestion.But Ball said the port was loading empty containers onto ships.

Northport at Whangarei, the recent focus of much debate and study as a potential alternative sport location to CBD-sited Auckland, said it was not experiencing congestion and not subject to surcharges because it is not a container port.

Spokesman Peter Heath said a range of global and regional factors had combined to create disruptions to shipping supply chains – including the availability and positioning of empty containers.

“We are well-positioned to support NZ’s supply chain through our facility and will work with cargo owners, freight forwarders and shipping lines to ensure this work goes smoothly. We are currently in discussion with a number of interested parties to explore options.”

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