Ports of Auckland announced that in the best interests of the company, its stakeholders, and the New Zealand supply chain, it has decided to end the automation of the Fergusson Container Terminal.
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Ports of Auckland Board Chair Jan Dawson said, "We have made this decision after careful consideration of the current status of the project, advice from independent experts, and the work required to achieve full terminal automation."
"Our review indicated that despite the best efforts of our team and our supplier, the project is experiencing continuing delays to full terminal roll out, the system is not performing to expectations, and we do not have confidence in the projected timeline or cost to completion."
"With these uncertainties and the need to transform the Port's performance, the Board has determined the best course of action is to cease automation of the Container Terminal."
Chief Executive Roger Gray said "This is a positive decision which will come as a relief to many at Ports of Auckland and in the wider supply chain. It gives us certainty about the future and allows us to focus on our core job: safely providing a great service to New Zealand importers and exporters. It will also help us get the business back to the level of profitability we have delivered in the past."
"The end of automation does not mean the loss of all the investment and work that went into it. The new infrastructure built as part of the project – for example the new wharf and cranes – provides extra capacity which is essential for future growth."
"We will, however, have to write-off approximately $65 million in investments which will no longer be used, mainly the automation software and guidance system."
"Ports of Auckland attempted automation for the right reasons: to lift capacity, productivity and profitability without further port expansion or reclamation. I am confident we can still meet those aims; we will just take a different path. It was a bold and innovative project, but one that – despite the hard work of many - was unable to be delivered."
"I would like to thank the board for making this decision, as it lays the foundation for the long-term success of our business."
The world’s largest global transport union, the International Transport Workers’ Federation (ITF), has joined the Maritime Union of New Zealand (MUNZ) in supporting the decision by the Ports of Auckland to abandon its costly automation programme.
“I want to reiterate the words of Ports of Auckland CEO Roger Gray ‘This is a positive decision which will come as a relief to many at Ports of Auckland and in the wider supply chain’,†said Crumlin.
“The brutal reality here for Ports of Auckland, and its sole shareholder and owner, Auckland Council, is that this decision and the write-off of $65m NZD, would never have happened if management valued the knowledge and expertise that its workforce brings to decisions about lifting port capacity, productivity and profitability.â€
“The major lesson here - which I doubt is to be found in management’s review of the fiasco, or within the advice from ‘independent’ experts - is that you’ve got to listen to your workers. When the people who do the heavy lifting at a place like the Ports of Auckland say ‘this project is not fit for purpose’, ‘the technology is not ready’, and they even tell you ‘the technology is dangerous, we are worried for our our lives’: you have got to listen to your workers,†urged Crumlin.
“Coming out of this I would expect Auckland Council to show they have learned their lesson in this regard, and therefore their first act should be to put a worker on the Ports of Auckland Board. What more vindication do we need that the people who know this port better than anybody else must not only be consulted, but their collective views should be represented and valued at the decision-making table,†said Crumlin.
“Ports of Auckland learnt the hard way the cost of ignoring your workforce, other port operators should take note not to make the same mistake,†he said.
When the Ports of Auckland first announced its automation plans in 2015, it was fresh off the back of a drawn out dispute with unionised waterfront workers.
Management said that in the initial phase of the project, some 50-70 of the port’s 320 stevedores would be replaced by automated carriers, with more to follow by the time the project was slated for completion: 2019. By then, the port claimed, automation would have boosted its container handling capacity by just over 900,000 TEU per year, to around 1.6 million TEU.
But seven years later, the project is still not complete. Instead, it has been marred by delays, safety concerns, and has actually harmed the port’s productivity.
In November 2020 one of the new automated straddle carriers lost control and slammed into a stack of others. In June 2021, another went ‘rogue’ due to a software issue and hit a container. The port company temporarily suspended use of the machines pending a safety review. Software glitches are said to have regularly taken the carriers offline.
Each carrier weighs 70 tonnes unloaded, and over 100 tonnes total when carrying a full container box. They move across the wharf at over 22 kilometres per hour - a force of weight easily capable of killing a person.
“We had a situation where importers and exporters were getting charged more for either delayed shipment or boxes sitting idle on the wharves because software glitches in the automated gear and other delays were slowing down movements in the port,†said MUNZ National Secretary Craig Harrison.
“Maersk Line even introduced a $400 NZD surcharge for customers wishing to use the port, as the company tried to recover the cost of their ships sitting idle due to the congestion.â€
“It took the port seven years to realise this project was never fit for purpose. The sad thing is that ratepayers of Auckland wouldn't have lost tens of millions of dollars if they’d listened to us, and the ITF. Our community could have built a new library with that money, a park for the kids, or fixed the trains,†concluded Harrison. ■