The labour shortage at Ports of Auckland's container terminal that's fuelled its reputation for low productivity and costly shipping delays will be resolved by December, with firm berthing slots, on which a smoother supply chain
Anchors away: New Auckland port CEO optimistic better days are here for embattled council company
Ports of Auckland CEO Roger Gray says container terminal now "on right track". Photo / Dean Purcell.
The port now had a "clear line of sight" to training producing five straddle drivers every three weeks with crane drivers being trained as well.
That would enable it in March to reintroduce berthing windows, thrown into disarray by Covid-fuelled shipping disruption and ship handling delays.
"I'm pretty confident the container terminal is on the right track," said Gray, in the job since April.
In response to Herald questions about operating expenditure in the port's FY22 annual report, which showed restructuring costs of $1.8 million, up $800,000 on last year, Gray revealed 30 staff had exited in a recently completed corporate restructure.
Wharfside, Gray believed the upsurge in job interest was because word was getting round the port was working hard to improve its culture and turn around its poor health and safety record.
"There's a lot of interest from family members and people recounting that positivity. We're starting to see a lot of positive comment from unions around the collaborative approach we are adopting. People are starting to see us [as] an attractive proposition. While aviation continues trying to recruit people, people are still nervous about going to another sector. Ports didn't close during Covid."
Along with a new CEO, the embattled port in FY22 ushered in a new chair and largely new board on the back of an independent report finding serious health and safety concerns, poor productivity with weak dividend returns to Auckland ratepayers, and ongoing failure to implement a costly six-year-long terminal automation project.
This week it posted a FY22 group net loss of $10.3m (FY21 $45.57m profit).
The loss, it said, was the direct result of the board's recent decision to abandon the automation project, with a write-off of $63.1m in costs. Of this impairment cost, $58.5m was for software. The port had been trying to merge automation with manual operations at the terminal, which would now return to manual operation for the foreseeable future.
Weak productivity and delays handling container vessels have also been costly for Auckland importers and exporters, saddled with Auckland congestion charges by shipping lines and delays in getting cargo delivered. Ships have diverted to Tauranga to avoid delays, and increasingly, to Northport.
FY22 revenue increased to $265.3m, up 17.2 per cent on FY21. Group operating profit before tax, excluding impairments, revaluations and share investments, was $27.4m, up 32.8 per cent.
Gray said he was particularly pleased about the increase in operating profit, and being able to pay the council a dividend of $14.2m when the forecast was $4.2m.
"In the end the loss is a book loss. It doesn't mean I understate ratepayer money, but it is an accounting treatment."
Asked if ratepayers should be prepared for more losses from the failed project, Gray said he didn't expect any more "significant costs in this financial year".
However costs from the disastrous foray into automation won't end here.
Gray reconfirmed there are costs ahead in converting 27 new automated straddle carriers to manual operation.
Port sector insiders suggest this will be expensive.
Gray said negotiations for the conversions were under way with the port's partner company in the automation project. As negotiations weren't over, he wasn't prepared to comment on the likely cost.
Meanwhile, the port has purchased five new straddle carriers, which Gray said were needed for growth, "even if the automation project had worked".
"They are completely separate. They are growth capability for us.
"It's important to say we don't need to convert them [the others] urgently. We have plenty of capacity for the next three or four years with the current construct.
"My preference is to come to a good negotiation that's meaningful for us and our owners and I will take the time needed to get that answer. It does need to be done because they are good pieces of equipment, but I want to make sure I get that conversion and we do this properly."
Gray said "good solid volumes" were now going through the container terminal, where a strong focus was on improving safety standards. Last week it had processed the highest number of containers - just under 9000 - in a year.
A rebound in the port's revenue could be expected from the resumption of cruise ship visits, he said. Up to 100 were scheduled to call in FY23, and more than 130 in FY24.