The fall in Port of Auckland's productivity is causing wider supply chain issues, claims cargo group. Photo / Michael Craig
The fall in Port of Auckland's productivity is causing wider supply chain issues, claims cargo group. Photo / Michael Craig
New Zealand’s exporters and importers are calling on Port of Auckland to lift its efficiency and productivity at least as much as it has hiked user prices — and soon.
The New Zealand Council of Cargo Owners, which represents 70 per cent of the country’s exporters and importers, including manyof the sector’s biggest names, said companies had “a right” to expect productivity gains if they are being expected to pay more.
Chairman Mike Knowles said it was “a myth” that New Zealand had recovered from supply-chain upheaval.
“It’s simply being masked by lower volumes moving through our ports. Those companies trying to move imports and exports in and out of the country know the stark reality is that our ports have yet to fully recover their productivity levels and the Port of Auckland, in particular, has a long way to go.”
Knowles said Ministry of Transport data showed the number of containers moved on and off ships per hour at the Auckland port in the second quarter of this year was 42 per cent below the same pre-Covid period in 2019. The official figures said 46.71 boxes were moved per hour in Q2 this year, compared with 80.46 in 2019, he said.
“This in itself is a significant problem for shipping lines and cargo owners, but is even more concerning given the significant impact to vessel schedules and cargo liftings at all other ports of call around the country.
“Right now, we want to see Port of Auckland Ltd get back to pre-Covid 19 levels of productivity as a minimum. If we are being asked to pay more, any increase needs to be matched with productivity gains,” he said.
The Auckland Council-owned port has announced a raft of user price rises, along with new charges, from January 1. There will also be a general price increase of 7 per cent. New charges include a rail handling fee per container, and a new “authority to work” safety permit, which carries a $750 an application setup cost.
New Zealand Council of Cargo Owners chairman Mike Knowles says it's “a myth” that New Zealand has recovered from supply-chain upheaval. Photo / George Novak
Auckland Mayor Wayne Brown has said he is okay with the increases if it means the underperforming port doesn’t put the onus on ratepayers in its financial turnaround efforts.
Knowles said the cargo owners group understood the need for the port, the country’s main import gateway, to be run profitably, “but it also needs to be run efficiently”.
“The bottom line is that every increased charge on cargo owners — including the never-ending increases in VBS [vehicle booking system] charges and port surcharges — without a gain in productivity, directly hits the competitiveness of New Zealand exporters and importers.
“At the end of the day, it’s NZ Inc that’s losing because our global competitiveness is eroded by poor port productivity.
“Australian ports have similar regulatory requirements to New Zealand and are able to maintain productivity at a higher level than Port of Auckland Ltd, and in fact all New Zealand ports,” Knowles said.
Port of Auckland chief executive Roger Gray has told the Herald the port intends to use revenue growth to support making a fair return to the council, its owner, “because right now we continue to deliver less than our weighted cost of capital”. The price rises were to recover inflationary costs on existing charges, “but also we are looking to introduce additional, mostly land-based charges designed to have those people who use the port to make money contribute to the port’s profitability”, Gray said.
Knowles said all ports needed to lift their game so New Zealand could regain its competitiveness internationally.
“Overall the New Zealand port sector lags behind other countries. It’s a myth that we’ve bounced back from the supply-chain disruption of the last couple of years — it’s simply been masked by lower volumes moving through our ports.”
The council’s members include export heavyweights Fonterra, Zespri, Silver Fern Farms, Pan Pacific Forest Products, Rayonier and Oji Fibre Solutions and major importers.
It said its members collectively accounted for 70 per cent of New Zealand’s containerised exports and a significant amount of bulk export, import and domestic cargo volume.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.
