Freight delays and under-performance at Auckland’s port should be sorted soon, executives tell its owner, Auckland Council

Ports of Auckland believes delays to freight caused by Covid-19’s disruption to shipping schedules, a stalled container terminal automation project and staff recruitment problems should clear by the end of the year.

The Auckland Council-owned business has told councillors it expects to put “current issues” behind it in the second half of this year and improve its operations and financial results next financial year.

A separate independent inquiry ordered by the Council into the company’s health and safety record after a death in August of a worker at the container terminal is finished and about to report.

The port was hit by what it describes as a “perfect storm” late last year, delaying shipping through Auckland and forcing diversions to other New Zealand ports. Worldwide disruption to freight, schedules and even container supplies have affected ports and those relying on shipping to move goods.

While importers, in particular, were affected by freight delayed on ships or on the wharves, the port company’s financial performance was also hit. Its revenues fell in the second half of calendar 2020 from $123 million to $117m and net profit was down 20 percent from $17.1m to $13.6m in that period.

Its dividend to the Council, planned to be $10.6m for the 2020/21 year was less than half, at $4.6m.

Ports of Auckland’s interim report says the number of containers moved per crane, and the total moved off each ship per hour both fell well short of targets during the half year. No cruise ships arrived. But the company reports a “bounce back” in car imports since the first half of last year, and non-container freight held up, with trade to the Pacific unabated.

However overall, “normal supply chain patterns disappeared and have not come back” chair Bill Osborne and chief executive Tony Gibson say in the report.

A combination of Level 4 lockdown workplace restrictions, a change in the flow of ships arriving and a shortage of crane drivers compounded problems.

An international search for crane drivers willing to move to New Zealand had succeeded in creating “a circuit breaker so we can work through the backlog and get ships back on their Auckland timetable”.

The disrupted container terminal automation project is back working, with 70 ships and more than 40,000 containers handled and the company told councillors it was now “looking forward to turning it fully on across the whole terminal later in 2021.” That depends on a project for “pavement remediation”. A total of 416,000 containers were handled at the port in the reporting period.

On staffing: “Our increased recruitment and training will result in a larger container terminal workforce and ensure we are ready for anticipated increased container demand. It will also ensure we are geared up long-term to handle any spikes in demand and throughput.”

The Council had made provision for the port’s financial woes in an emergency budget in the middle of last year, so 2020’s bad news does not affect the Council’s own financial position.

The chair of the Council Controlled Organisations oversight committee, deputy mayor Bill Cashmore, told RNZ’s Checkpoint after a closed door briefing from POAL there had been “tension in the air but also an improved level of understanding about the complexity and challenges of running a port” during the Covid age.

He said it would be too strong to say he was “satisfied” with the answers the committee received from Osborne and Gibson, but the promised improvements from the automation project later this year were positive.

In terms of staff safety, after four incidents of harm last year, Cashmore said the automation project would be a benefit as people were excluded from the automated container handling area.

Tim Murphy is co-editor of Newsroom. He writes about politics, Auckland, and media. Twitter: @tmurphynz

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