Tuesday 8 December 2020
Kōmiti Aromātai Whakahaere Kaupapa Kei Raro
I Te Maru O te Kaunihera /
Council Controlled Organisation Oversight Committee
OPEN MINUTE ITEM ATTACHMENTS
9 Ports of Auckland: final statement of corporate intent 2020-2023
11 Council-controlled Organisations - Quarter 1 Performance Reports ending 30 September 2020
08 December 2020
1. There are pressures on New Zealand’s sea and land freight supply chain system with congestion occurring at the Ports of Auckland (POAL) as a result of international ships arriving off-schedule.
2. Our understanding is that these delays are being caused by a confluence of factors, including this being the peak import season/start of the export season, an unexpected and sudden surge in demand amidst COVID-19, bad weather and maritime industrial action causing congestion at Australian ports, as well as congestion issues at some transhipment ports in Asia further up the supply chain.
3. The fatality at POAL in end-August, delays to the automation of POAL’s container terminal due to COVID, and labour constraints have also complicated POAL’s management of the surge in demand.
4. While freight might normally divert to the Port of Tauranga (POT) in times of delay at POAL, POT is operating near capacity with constraints on rail capacity between POT and Auckland.
5. Due to time constraints at berths, the focus at POAL has been on the removal of import containers from ships, limiting export and coastal shipping volumes. As a result, a lot of the normal transhipment from POAL (including empty containers) to the rest of New Zealand is not occurring or going by road and rail carriers. This has impacts on our exports which rely on these ships and empty containers to move their goods offshore.
6. There are also reports of shipping lines bypassing ports both in New Zealand and overseas to make up for lost time and keep on schedule. This compounds the challenges for exporters in obtaining empty containers and timely shipping services.
7. Additionally, these developments are occurring in the context of increased global competition for container services, especially from the US and China, which has led to significant escalation of sea freight rates (four times last year’s rates).
8. We have received wide ranging reports of importers/exporters in various sectors being affected by these congestion issues.
9. General feedback from industry stakeholders is that the international supply chain issues, POAL congestion, as well as the resulting delays and backlogs in freight movements and container supply constraints, are likely to continue past Christmas and even up to mid-2021.
10. MOT officials are leading an inter-governmental group of officials (including MFAT, NZTE, and MPI amongst others) to monitor developments and assess if/how Government might be able to assist.