Port of Auckland bidding to become major Australian port?

By NZPA

Friday 1st June 2007

For years Ports of Auckland was upstaged by regional upstart Port of Tauranga, but now it wants to play a similar game by challenging Australian ports for the role of regional hub.

It may be taking economic harmonization with Australia a bit far to suggest a New Zealand port could become an Australian port, but this is what Ports of Auckland has in mind.

Auckland's port already handles 60% of upper North Island and 37% of New Zealand's container trade and has been undergoing a makeover to increase capacity and efficiency.

Auckland had a bout of indigestion in February and March after shipping line Maersk made the port its North Island hub, knocking rival Port of Tauranga down a big notch.

Ahead of the Maersk decision, Auckland had suggested merger talks with Tauranga that could have undercut the shipping giant's game to play one port off against the other. It would have created a $1.6 billion business.

However, Tauranga took umbrage at Auckland's demand for majority control and the talks were called off in March, although the door was left open for resumption in the future.

Auckland has worked on congestion problems and is now talking about the potential to handle containers out of, or destined for, Australia.

Here's the if -- if it can establish itself as an Australasian hub where containers are moved from feeder services to very large ships for long hauls to the United States and Asia hubs, or direct to Europe.

Ports of Auckland's chief executive designate Jens Madsen, who takes over from Geoff Vazey at the end of August, is cautious about doing a lot of talking before he has done some walking, but he is prepared to say the port's ambitions are Australasian.

"Ports of Auckland will continue to commit capital and other resourcing with the aim of becoming Australasia's premier container hub port coupled with a dual focus on well servicing the upper North Island trades and customers," he said.

Other port chiefs have talked privately about the potential to ship Australian containers through New Zealand, particularly refrigerated containers, because many of the large container ships that do long hauls from here have extra plugs for refrigeration.

The theory is that the supply chain constructed by Fonterra, using shipping line Maersk, could be of interest to others and the connection could be a New Zealand port.

The hub in the "spoke and hub" of any trans-Tasman company's logistics arrangements could be in either country.

Auckland and Port Chalmers are emerging as New Zealand hub ports, though Port Chalmers' executives don't like using the H word and Tauranga still regards itself as a hub with German giant Hamburg Sud using Tauranga as a central point.

Auckland is now fully owned by the commercial arm of the Auckland Regional Council and land for redevelopment in the west has been separated from the commercial port in the east. The board has changed and now the senior management is changing.

Three new ZMPC container cranes work at Axis Fergusson, Auckland's largest container terminal, and two Noell cranes were moved from Fergusson to Axis Bledisloe. Auckland now has eight container cranes, double the next biggest New Zealand port.

Fergusson has five post-panamax cranes that can handle wide ships, three of which are the fastest in the country.

The port is also taking delivery of a $14.5 million order for 10 new straddle carriers, bringing its fleet to 46.

Twenty eight of its straddles are twin-lift capable, and the newest diesel-electric powered ones can be used as generators for mobile reefer stations purchased recently.

New refrigerated container points are also going in at Axis Bledisloe, its second container terminal.

The shipping channel has been dredged to 12.5m at chart datum and the fill used for land reclamation.

Fergusson was extended by 3ha and a further 2.8ha will be operational by August. The port has also invested in technology systems and employed 30 extra staff, mostly stevedores.

"One of the keys to achieving Auckland's premier container terminal port status is using these investments and tools more efficiently and cost effectively than other Australasian ports," Mr Madsen said.

But he is silent on the question of whether the port is sacrificing profit for volume and won't say what new volumes are.

The port has been handling around the equivalent of 670,000 standard-sized containers a year and that is obviously going to be higher from the Maersk move alone.

Melbourne, Australia's biggest port, handles around 2 million.

Auckland is investing $150m in all its new projects, and what return it gets on that is unknown.

Melbourne is proposing to spend $A763m ($NZ870m) alone on dredging to secure its future but the plan is opposed by environmental groups.

Many people think Auckland will only seriously step up by getting its rail connection working properly.

The volume through its rail terminal is up nearly 50 percent this year, but it is still only 32 percent of capacity.

Most containers still move to and from the port in trucks, 40 percent of which move at night.

The port is trying to get a daily rail shuttle to an inland port at Wiri in south Auckland, but expensive rail sidings need to be constructed and there is no comment on who will pay.

An inland facility connected by rail would boost the port's capacity but the port has not walked the talk on inland projects before.

Madsen's take on all the activity is it amounts to a new era -- one that recognises bigger vessels are calling at fewer hub ports.

The biggest container ships coming to New Zealand carry 4100 containers but the next generation will take around 6000. Auckland's new cranes increase the move per crane per hour rate, which reduces ship turnaround time and that will matter more and more as ships get bigger and more expensive.

The choice of call by a big ship, be it in Australia or New Zealand, "boils down to if we are able to handle cargo efficiently and how fast you can turn a ship around", said Madsen.

So far, the number of Australian containers coming New Zealand's way is fairly limited.

"It is for us to prove ourselves but it is what we want to attract in the future," he said.

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