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Craig Harrison: A shipping plan to resolve the supply chain crisis
January 9, 2022
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.