2007-2008 - Ports of Auckland

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0204060810121416Market ReviewPorts of Auckland Annual Review 2008This year was notable for continued market volatility and turbulenceas competing shipping lines rationalised services in an effort to savecost and achieve greater efficiency.Overall, Ports of Auckland was a net winner in a raft of line and servicechanges during the year. While Auckland lost CMA CGM’s Nemo andPanama service calls and those of Gold Star Line’s trans-Tasman service,we retained and won others that more than outweighed the losses.Hamburg Sud and Maersk Line rationalised two of their key servicesover Auckland, electing to jointly operate a 12-vessel weekly serviceto Australasia, East Coast North America and Europe. In addition, fiveshipping lines (Pacific International Lines, Orient Overseas ContainerLines, Mitsui O.S.K. Lines, NYK Line and MISC Berhad) revamped theirtwo-loop South East Asia Service into single-loop, bringing larger2,800 TEU vessels to Auckland each week.The uplift in container volumes, anticipated as a result of thesechanges, began to be felt in late June 2008.Meanwhile, bulk and breakbulk volumes through General Wharvesincreased slightly (excluding Wynyard Wharf volumes). There wasnotable strength in the bulk cargoes trade and a slight increasein vehicle imports ahead of new vehicle emission rules introduced inJanuary 2008.Overall, ship calls stayed much the same, in keeping with industrytrends to fewer calls by larger ships, and there was a pleasing increasein cruise ship calls, up more than 40% to 70.Market OutlookWe anticipate ongoing market volatility as shipping lines deal withincreasing external pressures. Steel, fuel and crew costs haverocketed to new highs. However, the impacts of the global economicslowdown are yet to be fully realised. Projections for global shipping,typically a high-growth sector, are relatively bleak. It is unlikely theindustry will experience organic growth in the coming years to theextent it has done previously.Therefore, while the 2009 financial year has started well, weexpect a tailing off in volume growth as the effects of the globaleconomic slowdown are felt. Overall we expect volumes to settle ata similar level to that of 2008. Meanwhile, the cruise business isanticipating a very busy season on par with last year, with in excessof 70 calls anticipated.We also expect that the international trend to hubbing will driveincreased coastal shipping around New Zealand. We welcome theGovernment’s Sea Change strategy to reinvigorate the trade and lookforward to more coastal services in 2009. Once better established,coastal shipping will provide shipping lines with more supply chainchoices and facilitate a greater focus on larger vessels. This trendis likely to be positive for Ports of Auckland, both at the Waitemataseaport and in Onehunga.Volume TrendsOne of the most interesting trends of the year was a 55.5%increase in trans-shipments. The dramatic increase can be attributedto the ongoing service consolidations experienced since 2006,and provides further evidence of an emerging hubbing structurefor New Zealand, with Ports of Auckland at the heart of thedeveloping trend.While overall container volumes reached a pleasing record high,growth was in fact less than had been anticipated. Import volumeswere particularly affected in the second half of the year, while UpperNorth Island drought conditions and a high New Zealand dollarsoftened export volumes.
OPERATIONAL HIGHLIGHTSThe 2008 financial year was an exceptionallybusy one for Port operations, with containervolumes at record highs, across-the-boardimprovements in key productivity measuresand a number of major projects reachingimportant milestones.VolumesTotal container volumes were up 8.8% for theyear to a record high of 840,993 TEU, withtrans-shipment volumes increasing by 55.5%.Full import volumes were up 3.0% and full exportcontainer volumes down 2.7%.Bulk and breakbulk volumes (excludingWynyard Wharf volumes) increased 2.4%. Vehicleimports were also up slightly as importers movedahead of new vehicle emission standards that tookeffect on 1 January 2008.While the Port handled slightly fewer shipcalls, the cruise business showed good growth.The 2007/08 season was Auckland’s biggest yetwith 70 calls by 30 cruise ships.ProductivityVery encouraging progress was made in lifting portproductivity to world class levels. The containerterminals recorded a 5.7% increase in cranemoves per hour, a key productivity measure. Thisimprovement was particularly pleasing given therecord high container throughput and increase intrans-shipment volumes. Across-the-boardimprovements were also recorded in ship hoursin port, ship turnaround, staff hours per containerand truck turnaround measures.PeopleAn increased focus on our people was a key priorityfor the year, a strategy that will continue in 2009.Key changes and initiatives included:• a major values and culture change programme,Compass, in which around 440 Port staffparticipated during the course of the year• the introduction in May 2008 of the ProductivityBonus Programme, a self-funding staff bonus plan,to reward productivity gains for operational staff• the amalgamation of the Bledisloe and Fergussoncontrol and planning teams, consistent with anew ‘one terminal’ philosophy.For more information on these initiatives see the2008 Sustainability Review.Equipment and TechnologyTen new twin-lift straddle carriers were addedto the Port’s fleet during the year, cementing the fleetas the country’s newest, largest and most efficient.A range of strategic technology projectswere also advanced. A comprehensive process toprocure a new Terminal Management System wascommenced during the year and a project teamestablished. The project is one of the largest ofits kind ever undertaken at a New Zealand port,and will be a key enabler for further improvementsin capacity, customer service and productivity.In November 2007, after extensiveconsultation with the freight industry, weintroduced a Vehicle Booking System (VBS) at theFergusson container terminal. The system has beeninstrumental in helping the Port cater for increasedtruck volumes while simultaneously reducingturnaround times, and has since been introducedat the Bledisloe container terminal.New technology at the General Wharves isspeeding up the supply chain for imported secondhandvehicles. Ports of Auckland’s proprietaryVehicle Entry User System (VENUS) involves theuse of handheld barcode readers to identify andtrack vehicles, while MAF, Customs and bill paymentclearances are recorded on a web-based service.The paperless system allows transport operators tocollect vehicles from the wharves quickly and easilyusing a pin number.Other new systems, such as SCADA, a real-timemonitoring system for fuel and energy consumption,are enabling efficiency improvement and savings.InfrastructureIn August 2007, the deepened shipping lane wasofficially opened (see pages 4 and 5 for moreinformation). Another major milestone was reachedwith the conclusion of Stage One of the Fergussoncontainer terminal extension. The additional5.8-hectares provided by this reclamationsubstantially increases our container-handlingcapacity, enabling greater operational efficiency.Meanwhile, construction began on the new GoldenBay Cement facility in the eastern Port, where this vitalAuckland industry will relocate at the end of 2009.23MINUTES Average truckturnaround440staff attended compass training10new straddle carriers
Page 3 and 4: leadershipTo lead Ports of Auckland
Page 5 and 6: FINANCIAL HIGHLIGHTSPORT OPERATIONS
Page 7 and 8: DIGGING DEEPIn August 2007, Ports o
Page 9 and 10: 5.3% to $71.9 million. Port operati
Page 11 and 12: My first 10 months as Managing Dire
Page 13 and 14: Piloting the Company through the cu
Page 15: Ports of Auckland’s executive tea
Page 19 and 20: CRANE RATE(index: year 2000 = 200 )

2007-2008 - Ports of Auckland

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