Big Focus – The Inland Strategy Boosting Regional New Zealand
Into its fifth year, CentrePort’s inland strategy continued to benefit the business and help drive economic prosperity in the regions.
Since 2013, CentrePort and KiwiRail have provided a CentreRail service for container shippers through facilities in Taranaki, Whanganui, Palmerston North, the Wairarapa, and Marlborough. What began as a rail network solution is evolving into a logistics supply chain with various services wrapped around the CentreRail service.
This provides a cost-effective, reliable connection and logistics service between central New Zealand importers and exporters and global markets. The past year saw record CentreRail volumes, with more shippers coming on board and the continued development of the hub network.
There was further development of the Waingawa hub near Masterton, which helped manage the ongoing heavy demand to move logs. Waingawa provides storage, weighing, and scaling services with loading onto the rail link to the Port. Further prospective log hub sites in the Wairarapa are being considered for future development.
Development of the Smart Road facility in New Plymouth continued. This is a dedicated container transfer site with heavy lifting equipment that makes it easy for shippers to connect efficiently with rail across Taranaki. To further enhance the growth of the facility, CentrePort is working with potential strategic partners to boost logistics capacity and capability.
The Whanganui hub continued to be highly successful, supported by the partnership with Ali Arc Logistics. The purchase of a railfed site in Palmerston North will enhance services to that location. Strong growth in demand from Marlborough, largely from the wine industry, will help drive hub development in that region.
ANZCO Foods is a meat processing company, contributing approximately $100 million to Taranaki and Manawatu-Whanganui.
The company operates two processing plants in Manawatu-Whanganui, providing much-needed jobs and income to the region.
ANZCO has had a long-standing relationship with CentrePort and moves containerised export product through the Port.
ANZCO exports to over 100 countries, and relies on CentrePort’s daily rail service to send its products across the world.
Grant Bunting of ANZCO Foods
Ali Arc Logistics works in partnership with CentrePort to connect Whanganui to the world. The long-standing relationship has enabled Ali Arc to offer customers a set price and certainty around the timing of freight.
CentreRail's reliability, efficiency, and flexibility are all key drivers for why the partnership works so well.
"It provides a streamlined rail network, making our supply chain more efficient," said Ali Arc General Manager Brendon Bartley.
"Before using CentreRail we had to coordinate 20 to 30 trucks a day, or a train which diverted through Palmerston North. There were always delays. Now we have one train and we know when it arrives and when it leaves."
More than 20 Whanganui businesses use Ali Arc and CentreRail to send their products to the world.
Brendon Bartley of AliArc
Big Focus - Resilience
CentrePort made significant progress in improving the resilience of the company. While there is much still to do, a major programme of works achieved several milestones during the year.
Anthony Delaney, GM Infrastructure and Environment
Applying the lessons from the 2016 Kaikoura earthquake, CentrePort is building enduring assets and putting systems and strategies in place so it is in a strong position to handle geological, environmental, and commercial challenges of the future.
The resumption of service of the two 750-tonne ship-to-shore cranes in September 2017 was the result of a massive collaborative effort. A $28m temporary works programme commenced in the previous year presented complex engineering and construction challenges. HEB Construction was rewarded for its work, winning the Construction Excellence Award at the Civil Contractors New Zealand Awards. Holmes Consulting, Opus NZ, Tonkin+Taylor, Aurecon, NorthPower, Rich Rigging, Liehberr, and Downer all played important roles in getting the cranes up and running.
The project secured 125 metres of the 585-metre Thorndon Container Wharf and included temporary paving works. A total of 185 piles, made up of more than 1000 tonnes of steel, were driven an average of 40 metres into the soil. Additionally, 644 gravel columns were embedded in the ground to reduce any liquefaction from future quakes and provide resilience to temporary works.
Ten buildings were demolished or partially demolished along with a portion of Thorndon Container Wharf. The demolished structures included the former Statistics House, the Port Coldstore and part of Shed 51 — the former cruise terminal.
The demolition programme creates opportunities to implement resilience. Demolition of old storage sheds on the E-site (the 0.8h space between CustomHouse and the former BNZ Building) has paved the way for development of a marshalling area for the Strait NZ Bluebridge ferry operation. After the Kaikoura quake marshalling had to be moved from the damaged Kings Wharf and temporarily relocated to the Glasgow and Interislander Wharves. The partial removal of Shed 51 will allow a second log berth.
Other resilience work included investment in the Seaview Wharf fuel facility resulting in improved operability.
Thousands of tonnes of asphalt were laid as part of repair and remediation work. Major running roads for large container-moving equipment were replaced while work began on improving areas of the log yard.
Responsible environmental management of waste from these wide scale works is a big focus. The waste minimisation project is helping ensure effective recycling and sustainable disposal of waste.
Ray Mudgway, GM Container Services
An ambitious “bounce back” back strategy followed by the implementation of a “platform for growth” saw CentrePort rapidly ramp up container volumes to be well on track to surpass pre-Kaikoura 2016 earthquake volumes.
The previous year’s volumes were significantly impacted with the two ship-to-shore gantry cranes out of action for 7½ months. The cranes were unavailable for a further 2½ months in FY18 before they returned to service on 18 September 2017. The provision of geared ships with their own cranes provided by the ANL shipping line was critical during this challenging 10-month period.
Container Services GM Ray Mudgway said he was always mindful of the pressure on customers as CentrePort pursued an aggressive strategy to get the cranes up and running.
“We knew some shippers were facing 800 percent increases in domestic transport costs if they couldn’t move cargo through CentrePort. CentrePort set steep goals because we knew we had to look after our customers,” he said.
While the cranes are back working, there are ongoing operational constraints with just 125 metres of the former 585-metre Thorndon Container Wharf available. A new multi-berth wharf is being planned, but in the meantime innovations and significant efficiency gains have enabled operations to track towards pre-quake levels.
Once the cranes were operational, the “platform for growth” was implemented to ensure the right resources, management structures, ICT systems, business processes, and workforce models are in place to meet current and future growth.
Ray Mudgway said driven by record volumes on the CentreRail network, the outlook for the container business is bright.
“We are achieving great operational outcomes. CentrePort’s productivity levels are as good as any port in New Zealand. We’re achieving stability and certainty and adding value for our customers.
“It’s been hard but we’re back. CentrePort is in a really good place to service the market and meet the growth we know is coming,” he said.
Container Volume Growth
All in Twenty Foot Equivalent Units –
*NB: 64% growth on the previous financial year
In 2018, Whittaker's Chocolate exported record volumes of its product across the globe. Internal Logistics Coordinator Daniel Charpienter said this wouldn’t have been possible without CentrePort’s help.
"The Port was under significant volume pressure this year. They worked hard to bring back customers and also meet the challenges created by demolition and repairs. The service we received was top notch. There were no delays and we always knew where our chocolate was."
CentrePort’s smooth, efficient supply chain is crucial to Whittaker’s’ success, especially in overseas markets. Every day or week counts when products have a shelf life and countries have strict requirements around what they will and won’t accept.
Daniel Charpienter of Whittaker's
Break bulk volume growth
|FY18 vs FY17
|Total Vessel Arrivals||620||644||553||638||15%|
It was a remarkable year for break bulk with volumes up across the board despite operating on a reduced footprint due to ongoing remediation / repair work.
In addition to healthy volumes in logs, vehicles, cement, and wheat, there were other bulk items that helped boost revenue. These included 69,049 tonnes of boulders, some the size of small cars, shipped by barge from Tarakohoe in Tasman. The boulders were then moved by truck up to the Transmission Gully project, mainly used for river / stream diversion work.
Break Bulk General Manager Blair Spencer said managing the continually increasing volumes is made possible by planning, efficiency, and capability, which leads to more throughput.
Focussing on throughput rather than storage means it’s a supply chain exercise. It’s about having a plan to get cargo through the Port continuously.
“CentrePort seeks to improve the supply chain to increase efficiency and remove fragmentation. The CentreRail network / inland hub strategy is a core element of this. We’re a supply chain asset,” he said.
Logs - Big Growth Continues
Driving the big numbers in the Break Bulk business were the continued large increases in log volumes. A new record 1,343,330 JAS was exported — a 23 percent increase on the previous year. The growth in log volumes through CentrePort has been huge, nearly doubling in the past five years.
Blair Spencer said managing the demand has been challenging but was achieved effectively and safely. He says CentrePort achieving supply chain efficiency has benefits all up the line.
“It has implications all the way from Wellington up to the bush. Making sure the logs are getting through the Port as quickly and efficiently as possible prevents back-ups up the line. My job is to help the guys in the bush keeping going.”
Key to accommodating this growth area is the continued development of log hubs as part of the inland hubs strategy. The Waingawa hub near Masterton provides temporary storage, weighing, and scaling of logs, helping ensure quick movement through the Port. An expansion to Waingawa and the establishment of new log hubs in the Wairarapa is being planned.
THE WAINGAWA HUB
All in JAS (Japanese Agricultural Standard) – all relating to financial year
Log (JAS) Actuals FY15-FY18
Ferries and Fuel
For the first time in CentrePort’s history the Port received back-to-back volumes of one million tonnes of petroleum. The 1,024,938 tonnes for FY18 was slightly up on FY17.
The CentrePort facilities are vital to helping keep the region moving, with all of Wellington’s aviation fuel and a significant amount of vehicle fuel for the lower North Island being handled through the fuel berths.
Ferries and Bulk General Manager Andrew Steele said there is a strong focus on resilience for the fuel berths, not just for CentrePort’s benefit but for the regional economy.
“At Seaview Wharf, for example, we have an ongoing programme of works to enhance operability while better understanding seismic resilience. We are working with our oil industry stakeholders to ensure the wharf operates efficiently and effectively,” he said.
CentrePort continued working with partners and stakeholders on plans to develop the Northern Gateway, a multi-modal ferry terminal. CentrePort is working with the Northern Gateway Stakeholder Group that consists of representatives from the Greater Wellington Regional Council, Wellington City Council, NZTA, Strait NZ Bluebridge, Interislander, and KiwiRail.
The new terminal would be a resilient northern gateway to Wellington and the South Island and provide much improved connectivity between transport modes. It is hoped this project will progress in the coming year.
Planning was completed and remediation work commenced on the 0.5ha area between the Customhouse building and the former BNZ building to create a new primary vehicle marshalling site for the Strait NZ Bluebridge ferry operation. Kaikoura earthquake damage to Kings Wharf had forced vehicle marshalling to be temporarily relocated to Glasgow Wharf (heavy vehicles) and Interislander Wharf (light vehicles). The new marshalling area is expected to be operational in the latter part of 2018.
All in tonnes
"Part of our role is to help Wellington through a natural disaster. We have to think about lifelines and resilience for the region — ferries and fuel are a key part of this."
Andrew Steele, GM Ferries and Fuel
It was another year of strong growth in the cruise ship business, benefiting both CentrePort and the local economy.
The Port received 81 ship visits, contributing to a 15 percent increase in visitors. Cruise New Zealand estimates the 238,000 passengers and crew arriving in Wellington provided a $59m boost to the local economy.
Significant further growth is forecast with 110 ship visits booked for the 2018/19 season.
“The cruise industry adds tens of millions of dollars to the capital’s retail, hospitality and tourism sectors. We also know from research that many passengers return to Wellington to spend longer in the region as independent travellers.”
CentrePort continued to review its property portfolio to ensure it aligned with the Port’s strategic objectives.
The demolition of the former Statistics House was completed. The property was classed as a destroyed asset as a result of the Kaikoura earthquake.
Following reaching a settlement with insurers with regards to the CentrePort commercial properties on 4 October 2018, it was announced the building formerly tenanted by the BNZ would be demolished.
Customhouse was reoccupied by New Zealand Customs in December 2017.
A range of Port buildings were removed during the year. These included the Port Coldstore and part of Shed 51 (the former cruise terminal), and storage sheds.
These areas will be utilised for a range of purposes including creation of a log berth and vehicle marshalling areas.