Supply chains are complex

IT’S NO SECRET THAT THE PORT OF AUCKLAND RECENTLY HAS not been operating as smoothly as we all would like. As a result, imported freight has taken longer to deliver and exporters are also encountering delays getting their goods away.

The situation has come from a number of factors at various stages in the supply chain, some of which have arisen thousands of kilometres away from the Waitemata Harbour.

The net result is that the road freight transport industry is having to increase its charges for delivering freight to and from the port to cover these additional costs.

What is apparent is the domino effect of any problems. Hold-ups anywhere can flow all the way through the supply chain to its end, whether the cargo is inbound or exported.

The supply chain is changing and everyone needs to change with it. It will involve better planning....and increased costs that we should pass on to our customers.

A combination of events this year has highlighted the situation: Severe weather events in Asia – like typhoons – have delayed the arrival of ships. Others were diverted to Tauranga due to the delays at Auckland caused by a straddle-lift accident. Delayed arrivals out of their berthing window added to the congestion at the ports with other vessels.

That resulted in freight having to be picked up in the Bay of Plenty and taken to Auckland, while exports booked on those ships had to be transferred to Mt Maunganui.

Shipping companies book berthage space at the port weeks ahead. When there are weather delays or hold-ups at other ports overseas (before arrival in New Zealand), this upsets the local port’s allocation of staff to handle the ships.

When late-arriving ships eventually berth sometimes there are not enough shift-hours staff available at short notice to work the vessel or the capacity to work ships, due to bunching.

At the moment the Port of Auckland is installing an automated straddle system for the container terminal. This involves laying 25 kilometres of fibre-optic cable and new lighting towers progressively through the terminal.

At any one time, about 20% of the terminal space is not available for regular operations, so it’s only working at around 80% of capacity and this is likely to continue until late 2019 when the project will be completed.

There is also less space for truck grids as they work towards automation.

So the growing demand to get containers through the port in both directions is being compromised.

Finding containers, since they are stacked higher because of the restricted space, is also taking longer.

Booking space in the vehicle booking system (VBS) to pick up or drop off a container is becoming more problematic because of the wide variety of delays and reduced available slots.

We in the road freight transport industry are caught in the middle. We are storing containers at freight hubs longer, which adds costs for double handling, or are delivering goods later than originally expected because of delays in shipping or processing through the port.

Some of our clients are holding export goods longer than expected because we don’t know when to collect them to take them to the port – a consequence of the late arrival of the ship they’re due to be loaded onto.

There are delays in getting to and from the port through Auckland’s increasingly clogged roads. Other operating cost increases include fuel, RUCs, the regional fuel tax and the shortage of staff driving up wages and salaries.

The cost of getting all imported and export freight across our wharves is increasing and we have to make our clients aware of the reasons why. There is a fair chance that not all our customers know or understand all the complicated links in the supply chain that are changing.

It’s up to us to make them aware of how the supply chain is changing and the need to adapt to what has become the new normal. It will need better planning from everybody and acceptance that the costs are going to increase. T&D