21 December 2011

CBAFF president calls for New Zealand ports to learn lessons from industrial action

Industrial action at the Ports of Auckland (POAL) has highlighted the fragility of New Zealand’s supply chain, says Willie van Heusden, President of the Customs Brokers & Freight Forwarders Federation of New Zealand.

Mr van Heusden said it was essential that modern ports adopted flexible business practices, particularly in the face of the huge difficulties facing the shipping industry internationally.

“One of the sticking points in the deadlock between Ports of Auckland and the Maritime Union appears to be around whether the port is able to subcontract out,” said Mr van Heusden.

“A modern port needs to have flexibility in its labour force, the reality is that change is constant in this industry. If that doesn’t happen then the port, its workers and NZ Inc will lose out in the long run.”

Mr van Heusden said the deadlocked dispute in Auckland was particularly damaging in the face of the huge difficulties being faced by the global freight industry.

“Ships are being laid up due to the ongoing global financial difficulties or, as in the recent case of MISC Berhad, companies are withdrawing from the container business due to the tough conditions,” he said.

“Supply chains are getting stretched, are more complicated and businesses need reliability and consistency. NZ is already vulnerable both geographically and due to its size. The infrastructure round our ports is also weak. The hard fact is that we can’t afford disruption like this.

“The latest statistics I have seen suggest that, so far, 13 vessels with a total of 13,000 containers, have been diverted, bypassed Auckland or delayed by the action. This is 13,000 containers that need to be trucked or railed to their final delivery address. The estimated loss of revenue to POAL is $2.15m with an estimated value of trade exceeding $600m. The proposed industrial action will affect an additional 10 vessels and 12,000 containers, adding a further $600,000 loss to POAL and an estimated value of trade of $496m.”

Mr van Heusden said the decision by shipping line Maersk to switch its Southern Star container shipping service to Tauranga would also highlight infrastructure problems.

“Tauranga is a good, efficient port that has invested a lot of money,” he said. “The move raises concerns about the infrastructure between Tauranga and Auckland and, with that, the number of trucks and trains that are going to be going back and forth.

“Auckland remains a vital port but it is constrained by land limitations and that means that it needs to be super-efficient. In general, ports in New Zealand are also hamstrung by local body ownership, which stifles their potential to make a major contribution to regional economic development.

“We need our ports to be working more closely together. Port rationalisation would be in the best interests of regional economies and New Zealand as a whole.

“Ports of Auckland management has acknowledged the need to modernise working practices at the port and deliver productivity gains. Certainly a good starting point would be for them to get their workforce working again.”

ENDS

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