Auckland port congestion major challenge to NZ supply chain, Maersk says

Shipping congestion at the Ports of Auckland remains a critical challenge to the New Zealand supply chain, container shipping giant Maersk says.

However, the Danish shipping line said given its own key priority was health and safety, it supported the port company’s decision to extend implementation of container terminal automation project until it could be done without compromising terminal safety.

The Auckland Council-owned port company has told customers the project, uncompleted after nearly five years with an undisclosed cost, will not now go live until March next year – and even that date is conditional on cargo volumes.

The port has been introducing partial automation at the same time as operating a manual terminal system. Critics have attributed the project to the import gateway not being prepared when consumer demand for shipped goods soared after the pandemic outbreak. Freight costs for New Zealand exporters and importers have also soared, as shipping lines cash in on the demand and congestion creates extra charges.

The port, which has been delivering disappointing financial results and a much-reduced dividend to ratepayers because of the capital investment, has blamed Covid-19 restrictions and its own labour shortages for the delays in completing the project.

Chief executive Tony Gibson, who oversaw its introduction,resigned and departed in June.He had told the council in March that after continuing delays, automation would go live in June. A search is under way for a new chief executive.

The further delay announced this week follows an internal review after an incident in June revealed a potential safety risk. The partial automation was shut down and the terminal is operating a manual system.

There were hopes the manual system might speed freight movements up but Maersk Oceania executive My Therese Blank told the Herald the Auckland situation still posed “significant challenges to our ocean network”.

“The congestion at Ports of Auckland remains a critical challenge to the New Zealand supply chain.”

These challenges, underpinned by continued strong demand for imports, included the port’s suspension of berth windows and restricted space at its facility where empty containers were stored before being loaded onto a vessel.

A shortage of empty containers has created headaches for New Zealand exporters around the country this year.

“To alleviate some of the pressure on the inland empty container depots, following the reduction in space at Ports of Auckland’s link facility, Maersk has increased empty positioning by rail and road,” Blank said.

“The situation to reposition empty containers from the Auckland region to demand locations in New Zealand is a critical challenge.”

Blank said severe weather had further increased “significant disruption” in the New Zealand supply chain.

In response to the continuing congestion, Maersk had reduced the number of port calls on its services in an effort to build additional buffer time into its schedules, she said.

“These changes follow our actions earlier this year to add three additional vessels to our New Zealand network to create further schedule buffer and improve flexibility of our ocean network.

“Our key focus is to restore schedule reliability and to continue to focus on positioning empty containers out of Auckland region to demand ports across the country and thus minimize impact of the current disruptions to our customers.”

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