Container depots continue to struggle from shipping disruption. ContainerCo to invest in depots, software and equipment

COVID19 Lockdowns across New Zealand are expected to create further pressure on an already heavily disrupted shipping logistics.

ContainerCo managing director Ken Harris said exporters and importers continue to take the brunt of global shipping disruptions and the latest level 4 lockdown in New Zealand will have an impact on the availability of shipping containers.

“There is already a tight supply of shipping containers suitable for use by exporters and Auckland facilities holding other empty containers for sending offshore are full.

“Importers are required to return shipping containers to these facilities and face stiff costs if they are unable to do this.

Around 1 million TEU of shipping containers come into New Zealand each year, and movements out of the country are a similar volume.

Ken says as a result of world-wide shipping disruptions key container handling facilities in Auckland have already been operating well over capacity.

ContainerCo operates several key container servicing facilities in Auckland as well as other parts of New Zealand, most of which are operating well above efficient volume levels, with several key yards holding over 130% of nominal capacity.

The company has been delaying needed substantial investment into engineering and technology projects to minimise supply chain disruption, however with a return to normal shipping patterns looking unlikely for some years ContainerCo has decided to progress this vital work.

“We will re-build specialised facilities covering around 8 hectares in Auckland, improving supply chain resilience and capacity as well as reducing carbon footprint.

“Our investment will double capacity within six years plus to greatly improve depot efficiency.

ContainerCo is looking to acquire additional land in Auckland, Bay of Plenty and Hamilton and long term lease arrangements are also being looked at and where possible sites will be developed to accommodate specialised logistics facilities such as cross docks.

ContainerCo’s container parks in Penrose and the Oak Road park are being rebuilt this year and an additional yard is expected to be added in South Auckland mid-2022.

The Oak Road park, which was delayed due to last year’s COVID disruptions will see a new yard built in two stages.

“It will create some additional capacity however during construction storage on site is reduced from 5000teu to 2500 TEU for eight to ten weeks.

“We are also looking to acquire land in other regions and locations to ensure that the company can efficiently support local container redelivery from importer to exporter.”

The ongoing growth of trade through Tauranga is also needing new container facilities to increase capacity and ContainerCo has plans to build an additional specialised facility in Tauranga over the next five years to improve the supply chain for exporters.

ContainerCo is also supporting the development of the One-Stop Modal depot management and will commission four new EV trucks in the next five months.

A year-long trial of these systems at a ContainerCo depot in Auckland has demonstrated that this software is a significant step forward, eliminating manual processes and enabling increased depot automation.

“We have trialled an EV truck for over a year and the new units will offer better range and driver comfort.

A further four are to be delivered in 2022, and it is expected the programme will continue.

While shuttle operations are the primary design use, in the future units are expected to be able to cover freight legs between Hamilton, Auckland, and Tauranga.

Ken says much of New Zealand’s export cargo requires refrigeration or dry containers of a particularly high standard and around 30 percent of all container moves into and out of the country are to reposition empty containers.

Container parks' role in this supply chain, is preparing units for use, facilitating repositioning activity and holding buffer stocks and in Auckland container storage and upgrade facilities occupy around 25ha of industrial land housing at any time up to 30,000teu.

Shipping companies and New Zealand container parks work closely together to manage this expensive equipment, and each container is expected to have a downtime of 14 to 20 days with parks having a normal buffer of stock levels to cover 15 to 20 days of exporters needs.

“The last eighteen months have however been challenging with lock downs and other public health measures disrupting port activity.

“Disruptions of ports has slowed ship movement, and the loss of container shipping capacity has been estimated by experts to be 10%-14% while predictions of a global freight downturn proved incorrect.

With reduced shipping capacity and demand for cargo slots high, the supply and relocation of empty containers has become a problem and container depots have quickly filled up with unneeded dry containers, and struggling to supply refrigerated containers required by exporters.

“It is costly and frustrating for importers, freight forwarders and transport companies when they are unable to return containers to designated container parks. It can be an even worse problem for exporters if the supply of containers suitable for exports is disrupted,” Ken said.

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