Port of Tauranga handles near-record import surges but red tape is slowing progress with expansion plans

As New Zealand’s largest port, Port of Tauranga is  playing a vital  role in keeping cargo moving throughout the global disruption and local upheavals caused by the Covid-19 pandemic.  And  it  has  ambitious  plans, which  would  strengthen   its  key  place  in  NZ’s  transport  system.

Fortunately  for our export industries,  the  port  overcame the  effects  of  the pandemic’s impact on the international supply chain which  included extensive shipping delays, service cancellations, scarcity of supply and volume volatility.  This has led to congestion in the container terminal and at its MetroPort facility in Auckland.

The situation was at times exacerbated at times by operational challenges at Ports of Auckland, particularly in the first half of the financial year.

While  there  were 106 fewer container vessel visits between September 2020 and June 2021, the average cargo exchange per container vessel increased 21.7% due to the reduced vessel frequency and shippers maximising available capacity.

The  port had near-record surges of import container volumes between October  last  year and February.  The shortage of rail capacity to handle this resulted in week-long delays in transferring import containers by rail to Auckland.

KiwiRail provided additional trains from May, which has helped ease the pressure.
But container vessels are still arriving off window and taking longer to load and unload.

Since October last year, the  port  has had a 51% increase in static container volume in   the Sulphur Point terminal – that’s the equivalent of around 5,000 additional 20-foot containers sitting in the terminal at any point in time.

Chairman David  Pilkington  says  it is simply not efficient to run a container terminal at more than 100% capacity and productivity has suffered, the average crane rate dropping from 35.8 to 29.7 moves per hour.

Costs have risen, including straddle carrier diesel consumption and the related carbon emissions.

Pilkington  told  the  company’s annual  meeting  last  week  of  the  problems  the  port  is  encountering with  its  expansion plans:  progress has been frustratingly slow due to the red tape involved in the resource consenting process, he said.

“We require Resource Consent for our proposed Stella Passage Project, involves extending berths to the south of the existing wharves.  The $68.5m first stage at the container terminal will create an estimated 368 jobs through the construction phase, and more than 81 permanent jobs after completion.

“This is a project of national significance, in that it will bring urgently needed capacity and resilience to NZ’s supply chain and go a long way to reduce the pressure on Ports of Auckland congestion and operating issues.

“No government funding is being sought for this project, however in the hope that we might expedite the resource consenting process, we applied last year for consideration under the government’s ‘shovel ready’  and ‘fast track’ consenting programmes aimed at helping the economy recover from the Covid-19 pandemic.

“Unfortunately we were turned down for both. It was suggested by government ministers that we seek direct referral to the Environment Court as a means of accelerating the process. This has recently been agreed by the Regional Council consenting authority and we now wait – once more – for a Court date.

“Throughout, we have had extensive dialogue with local iwi and hapu and we are confident we can avoid or mitigate any potential cultural or environmental impacts from the development. This project is simply essential if New Zealand exporters are to preserve access to international markets in future”

PiIkington  says it is particularly pertinent that the recently released draft 30-year Infrastructure Strategy from the NZ Infrastructure Commission noted that approval for key infrastructure projects was subject to more widespread appeal than virtually all other OECD countries.

‘‘I urge the Government in the proposed overhaul of the RMA legislation to address this.In the meantime, we are pursuing our plans to automate container storage at the terminal to increase our capacity within the current land footprint.

“Our automation project will utilise well-proven technology that has been in use for many years at some of the world’s most efficient ports.

‘‘The future freight handling capacity of inland freight hubs will also help us increase our capacity. Our joint venture inland port with Tainui Group Holdings at Ruakura is under development, with opening scheduled for the middle of 2022.

“Our cornerstone shareholder, Quayside Holdings, is also developing the 148-hectare Rangiuru Business Park less than half an hour’s drive from the port, at the junction of the Eastern, Western and Southern Bay of Plenty.

“It will be an important addition to the region’s supply chain infrastructure.
The government has indicated that it plans to address the Upper North Island supply chain as part of a national freight strategy. The Infrastructure Commission has listed this as a priority in its draft infrastructure strategy provided to the Minister a couple of weeks ago”.

Pilkington pointed out that the government has commissioned another report on the future location of Ports of Auckland in its current location  and the Minister has said there will be a decision by the 2023 election.

“It has long been our view that a container port can keep operating on a smaller Auckland site while cargo growth can be absorbed by both Northport and Port of Tauranga”.

Not  surprisingly,  a  feature of  the  annual  meeting  were the tributes  paid to Mark Cairns,  the  chief  executive who  retired  during  the  year. Port  of  Tauranga,  under  Cairns’  guidance,  grew    from a  regional  bulk export port to NZ’s  international cargo hub and  most  successful  port.

In  his  18  years Cairns  has achieved  the  highest  port  productivity rates   in  Australasia  while  maintaining  an industry-leading safety  record.

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