The first of three Upper North Island Supply Chain Strategy working group reports has been released.

The report said the upper North Island ports are critical to New Zealand‘s freight task, and together account for approximately half of New Zealand‘s total export volume and two-thirds of its import volume (in tonnes).

Port of Tauranga handles the highest volume of all New Zealand ports in tonnes. The working group‘s view is that Port of Tauranga capitalised on the public infrastructure provided to the Bay of Plenty region, which subsequently has made the port a success. They will now consider whether similar investment in Northland would provide similar results for the region and Northport.

Future freight projections

Overall, imports are expected to increase across all upper North Island regions while exports are projected to increase, before declining in the case of Northport and Port of Tauranga, largely due to the projected decline in log exports.

Common themes heard during the working group‘s engagement:

• Unanimous support for a fully functioning rail system to the ports/ship side from those who offered an opinion
• General agreement that the current ports are competing but not cooperating.
• That the mixed shareholdings of the ports, particularly of Northport, are restricting its natural role.
• The freight forwarding community is largely agnostic to where imports arrive as long as they are supported with good transport infrastructure.
• Widely accepted that the Bay of Plenty and the Waikato have benefitted from rail infrastructure provided by Government at no capital cost to end users.
• The lack of rail infrastructure and port connectivity has been a brake on Northland‘s economic development.
• The currently successful Port of Tauranga existed several years before its successful level of container traffic followed.
• There is universal interest in the cost of moving freight and that cost is a big driver of behaviour.
• Land values key drivers of change and land use patterns globally – the issues facing Auckland are shared by many cities around the world.
• Councils all considered the dividend provided by ports very important.
• There are too many ports trying to be the same thing.
• Concerns over duplication of port and inland port assets.
• Congestion is the number one problem for freight operators.
• There are problems in getting rail through Auckland.

The report noted there are a large number of infrastructure options that need to be considered in making changes to the Upper North Island supply chain. These include, but are not limited to:

• A rail spur connecting the North Auckland Line to Northport (government is soil testing for this).
• A second route between Auckland to Tauranga.
• A freight corridor through west-Auckland.
• A west-Auckland inland port.
• An expanded or moved Southdown inland port.
• A new mega-port in the Firth of Thames.
• A vehicle servicing and import facility at Northport.
• Inland hubs for logs and exports within Northland with refurbished local rail lines.
• A New Zealand dry dock.
• An upgrade to the North Auckland Line (and spur to Northport) to double track and double stack, or a high service single track with passing loops.
• The electrification of rail services and alternative truck and rail machinery.
• A four-lane highway between Auckland and Whangarei (currently 18kms to Warkworth underway but at 12 years and $1bn for 18kms this will take 60 years and $7bn).
• An upgraded cruise-liner terminal at Ports of Auckland.

The chief executive of Port of Tauranga, Mark Cairns, said the progress report raised a number of themes and issues in the port industry and New Zealand freight network.

“The progress report identifies well-known issues such as the need for increased investment in road and rail networks and the historic financial under-performance and inconsistent reporting by some ports,” he said.

“We challenge some of the facts, assumptions and implications in the interim report, and we‘re hopeful these will be addressed before the next report due in June. For example, the report states that the Bay of Plenty and Waikato have benefitted from rail infrastructure and investment provided by the Government at no capital cost to the end user. This ignores the $267 million in rail costs paid by Port of Tauranga since 2010.”

The working group plan to deliver a further preliminary report to Cabinet in June 2019, providing a fuller update on progress and evaluation of different options. A final report is expected to be delivered to Cabinet in September 2019 and will include final conclusions and recommended actions to be taken over the next five years and beyond.