ADVOCATE COLUMN 4th WEEK JANUARY 2013

In December PWC released their report commissioned by Auckland City and the Upper North Island Strategic Alliance – UNISA - entitled “How can we meet the increasing demand for ports in the Upper North Island?” The report examined future freight demand and infrastructure demand for the ports of the upper North Island over the next 30 years. It provides an interesting contextual framework for future discussions as to what opportunities exist for regional ports and also what challenges may need to be first overcome. Possibly one of the more significant issues arising from the report – at least from a Northland perspective – is the large cost of domestic freight relative to sea freight costs. Often much of the supply chain costs incurred by businesses are incurred domestically rather than sea freight. The report highlighted that the transport costs from Whangarei to Auckland and to other parts of the upper North Island could well be a barrier to developing Northport as a container terminal unless there was significant investment in other parts of the land transport supply chain. Rail and inland ports are considered as two integral elements of this supply chain. The report also commented that “...significant efficiencies and cost reductions would be needed across the board before a container port at Whangarei would make economic sense”. Both rail and inland ports enable the consolidation of freight volumes and result in reduction in domestic freight costs. A by-product of this is inland ports act as an attractant for manufacturing enterprises. Apart from operational efficiencies at the Port of Tauranga, the inland port Metroport was identified by the writers as being critical in allowing Port of Tauranga to compete with Port of Auckland for a share of international trade. It appears the advice PWC are giving to UNISA – of which our councils are part of – is that in the immediate future is that the port’s of the upper North Island only need incremental change in capacity to meet growth in demand and that Northport is best suited to continue handling bulk freight only. There is much detail in this report which makes interesting reading on the nature of freight handled by the various ports and framework within which the authors have drawn their conclusion and why they confined their projections to relatively short time of 30 years. This report is available for reading online at the Auckland Council website http://www.aucklandcouncil.govt.nz/SiteCollectionDocuments/aboutcouncil/committees/regionaldevelopmentoperationscommittee/meetings/rdocomadag20121206item101of3.pdf