A shipping plan to resolve the supply chain crisis

Orig­i­nal­ly pub­lished in nzherald.co.nz 10 Jan­u­ary 2022

By Craig Har­ri­son

The ongo­ing ship­ping and sup­ply chain cri­sis needs a clear plan and imme­di­ate action.

We see dai­ly reports about sup­ply chain con­ges­tion. Covid-19 was the trig­ger that exposed the under­ly­ing weak­ness of the glob­al sup­ply­chain. New Zealand’s over­re­liance on glob­al ship­ping has placed us in a dif­fi­cult posi­tion.

We have heard a lot about these prob­lems. The glob­al forces dri­ving the sit­u­a­tion are not going away. What New Zealand can do is adapt and mod­i­fy our approach to ship­ping.

We’re in a tran­si­tion between two approach­es to the sup­ply chain. For the past 30 plus years, the pre­vail­ing mind­set was the mar­ket would pro­vide, there was no role for plan­ning, and there was no need for New Zealand ship­ping. This idea has been revealed as a bad mis­take.

Where to now? Indus­try play­ers admit there is a sig­nif­i­cant prob­lem. Recent Gov­ern­ment reports con­firm what the issues are, but only dis­cuss under­writ­ing, not sig­nif­i­cant invest­ment. The glob­al out­look for sup­ply chain per­for­mance will not improve in the short to medi­um term.

Ships are being delayed around the world, and when they get to New Zealand, they are already behind on their sail­ing sched­ule. New Zealand ports need to ensure that ships are ser­viced on time. Until the prob­lems are resolved at the Ports of Auck­land, and it returns to the through­put achieved pri­or to the automa­tion project, local con­ges­tion will con­tin­ue to impact on the New Zealand freight move­ment.

Issues around the avail­abil­i­ty of labour are cer­tain. But there are solu­tions like ros­ter­ing and employ­ment secu­ri­ty. These would reduce staff turnover and encour­age work­ers to see a career rather than an unat­trac­tive and exhaust­ing future of irreg­u­lar hours and in some cas­es poor pay and con­di­tions. Work­ers can no longer be seen as a cost to be reduced but as an invest­ment in suc­cess.

Export car­go needs to be in front of the major ship­ping lines at major ports so there is no require­ment for big ships to tran­sit around New Zealand. A New Zealand-flagged coastal ship­ping ser­vice would move the vol­umes need­ed around the coun­try in a time­ly man­ner. There is now no guar­an­tee that for­eign ves­sels will even stop at a sched­uled port.

An effec­tive New Zealand coastal ship­ping ser­vice needs to be sup­port­ed by New Zealand ports, and in return ensure con­sis­tent berth times and sup­ply of port ser­vices.

Con­ges­tion is the under­ly­ing issue with ports as freight needs to move both on and off a port in a time­ly man­ner. If it is delayed or in some cas­es not even picked up or dropped off by ship­ping com­pa­nies, this adds to the prob­lem.

A coastal ser­vice util­is­ing three to four ships and giv­en reg­u­lar berth space in ports would?help smooth out sup­ply chain con­ges­tion. Ports could also bet­ter plan when freight would be moved through the port and have con­fi­dence it would hap­pen.

Maybe the solu­tion is a con­sor­tium of New Zealand ports and freight oper­a­tors devel­op­ing a joint ven­ture, which answers the needs of all play­ers. In a small mar­ket like New Zealand, we have the abil­i­ty to move quick­ly and find inno­v­a­tive solu­tions.

Ports could coor­di­nate a ship­ping ser­vice that meets their own needs and pro­vide options to cus­tomers who have recent­ly seen their options evap­o­rat­ing.

Port com­pa­nies around the coun­try devel­op off-port con­tain­er stor­age and truck­ing facil­i­ties, and ports have worked with rail devel­op­ing fixed dai­ly ser­vices between Tau­ran­ga and Auck­land. Some ports are involved in joint ven­tures such as tug oper­a­tions and at times pro­cure­ment ven­tures.

KiwiRail could be a pos­si­ble part­ner with its ship­ping oper­a­tion, as it has the capac­i­ty, with direc­tion and sup­port from the Gov­ern­ment.

Every­one knows we have a prob­lem, and all say coastal ship­ping is one of the answers, but unfor­tu­nate­ly no clear, sys­temic solu­tion has been devel­oped. The Gov­ern­ment needs to take the lead and facil­i­tate dis­cus­sions between ports and freight oper­a­tors to get New Zealand coastal ship­ping back in play.

We need a nation­al ports strat­e­gy that links in with a coastal ship­ping strat­e­gy, and we need to get this up and run­ning now.

• Craig Har­ri­son is nation­al sec­re­tary of the Mar­itime Union of New Zealand.