Comment: Ports of Auckland decision must make economic sense

By: Nick Leggett, Road Transport CEO


One of our strengths as an island trading nation is the ability to get things to and from our ports in the most efficient way possible. Any political decision that undermines that must be scrutinised very carefully, says Nick Leggett, Road Transport CEO

As I write this, the political debate regarding the future of the Ports of Auckland and the possible removal of its core commercial functions (container and car imports) to Northport is in full swing.

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The Upper North Island Supply Chain Strategy is strongly recommending the move, which is hardly surprising given the influence New Zealand First wield in this government and their obvious advocacy for Northland. 

Regardless of the outcome, it has been disappointing that so much of the debate has been characterised by some extremely obvious nimbyism based on the premise that the time has come to rid the Waitemata Harbour of its unsightly commercial port.

The Upper North Island Supply Chain Strategy also included a discussion of costs regarding expansion of Northport and the other requisite road and rail infrastructure upgrades. What is interesting from a logistics and economic point of view, though, is that there hasn’t been a lot of analysis into the ongoing economic cost to the country from the Northport move.

However, an NZIER report commissioned by Ports of Auckland in December did shed some light on what those costs could be and let’s just say they aren’t insignificant. Closing the port will increase the cost of imports into Auckland by between $533 million and $626 million per year. Extrapolated out, that will mean a family of four will pay between $1250 and $1470 extra each year in the costs of the goods they buy.

The NZIER analysis also found further costs to the economy from the Northport plan, such as more than $1.2 billion a year in reduced GDP nationally, fewer exports, and less investment.

Closing the Auckland’s commercial functions will also result in increased carbon emissions because freight will need to travel down from Northport or up from Tauranga to reach market in Auckland. NZIER estimated that CO2 emissions will rise between 121,000 and 212,000 tonnes annually. For a government determined to reduce greenhouse gas emissions that must be a concern.

Supporters of the move will argue that the monetary costs, at least, will be offset due to the freeing up of prime waterfront property, increased tourism, and amenity values.

However, I’m not sure that compensates the lower-income Auckland families that will struggle to meet the extra costs of the goods they need to buy.

It’s undeniable that there are certain problems and constraints with the Ports of Auckland’s current location. However, there are also significant issues with a move to Northport that I do not think have been properly considered until very late in the piece.

As a representative of the transport industry, it would be easy to advocate for whatever outcome presents operators with more opportunities to cart freight, and there’s no question that the Northport move would do that. But is that really in the best interests of New Zealand and our outwardly-facing economy?

Why would you move the drop-off point for goods destined for Auckland and locations further south, 150km to the north? From a logistics point of view, it doesn’t make sense.
The livelihoods of New Zealanders rely on fast, inexpensive domestic transportation.

One of our strengths as an island trading nation, which is also heavily reliant on imports, is the ability to get things to and from our ports in the most efficient way possible. Any political decision that undermines that must be scrutinised very carefully.

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