1. Yang Guo | ID: 16932749
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Analysis on the potential Relocation of
Ports of Auckland
(26 November, 2016)
By: Yang Guo
ID: 16932749

2. Yang Guo | ID: 16932749
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Executive Summary
Being a main access to Auckland, Ports of Auckland Limited (POAL) plays an
essential economical role both to Auckland and New Zealand. However, the
port is confronted with a development challenge due to the growth of global
trade. It is estimated that POAL will reach its capacity constraint within 20 years
(NZIER, 2015). The intention to expand the current wharves’ area is
unattainable as the port sits in a sensitive location adjacent to Auckland’s centre
and harbour front.
The purpose of this report is to justify the relocation options and the impact of
the logistics layout led by the port movement. The study includes the followed
considerations and conclusions.
·The assessment of relocation options are based on the criteria of geography
conditions, traffic facilities, residence acceptance, environmental reconciliation
and sustainability. Moving toward south of Auckland is the optimal resolution;
·The experience of Singapore and Hong Kong ports is studied to make
recommendations on process design, thus enhancing the port capacity within
a limited land condition;
·The existing logistics layout relies highly on road traffic facing an incremental
traffic pressure, which could be improved when constructing a new traffic
network.
The approaches adopted in this report are data research and analysis, which
are disclosed by official organizations and media. Some commenters’ points
have also contributed to the analysis. Theories incorporated include leaning
strategy, supply chain management and process design.

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Table of Contents
1.0 Introduction 4
2.0 POAL operation strategy 5
2.1 Competitors and market rate 5
2.2 Challenges 6
3.0 Relocation analysis 8
3.1 Relocation options assessment 8
3.2 Information management and process design 12
3.2.1Singapore and Hong Kong ports 13
3.2.2 Deployment of freight hubs 16
4.0 Conclusions and recommendation 19
4.1 Conclusions 19
4.2 Recommendation 19
Bibliography 20

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1.0 Introduction
Ports of Auckland Limited (POAL), the successor to the Auckland Harbour
Board, is the Council-owned company administering Auckland's commercial
freight and cruise ship harbour facilities. The three aspects of operations of
Ports of Auckland are Cargo handling, freight hubs, and inland delivery
including packing and unpacking. It operates 24/7 and deals with over 900,000
containers annually (“Ports of Auckland”, n.d.). Located at the doorstep of
Auckland, POAL plays an essential role to the economy of Auckland and New
Zealand.
With a 70 square miles of Waitematā Harbour in total, POAL’s main cargo
wharves are located in Auckland’s CBD area, composed of two major container
terminals, Fergusson and Bledisloe, and six other multi-cargo wharves.
Besides the cargo berths and a number of secondary berths, the Port also
manages cruise ship visits (NZIER, 2015). These wharves work generally
independently, but within the peak hours, some of which functions as substitute
terminals (NZIER, 2015).
Figure 1 Port of Auckland layout

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Within the inland of New Zealand, POAL operates three existing freight hubs
and one under construction hub with partners as a logistics web linked by roads,
rails and costal and river shipping. POAL’s four parallel rail lines – each 500
metres long – can accommodate 128 wagons at one time for the loading and
discharge of containers (“Ports of Auckland”, n.d.).
POAL handled close to one million containers 20-feet equivalent units (TEUs)
in 2014, which made it the busiest port in New Zealand, accounting for 36% of
total containers movement in this country (NZIER, 2015). There are four distinct
features of the port.
·Diversified goods import. It is a dominant port for consumer and capital
goods imports such as motor vehicles, machinery, electrical goods and fruit.
·It is a transportation hub with rails, road on trucks and costal shipping
internally.
·It serves as a tourist site as well enabling 200,000 cruise passengers to
enjoy a trip around Auckland and New Zealand.
·It is located adjacent to the Auckland central business district, which
makes it sensitive with any modification of facilities and the landscaping.
2.0 POAL operationstrategy
2.1 Competitors and market rate
Inherited as the main access by sea to Auckland, POAL possesses a
geographic competency. According to a report on Container productivity at New
Zealand ports (Ministry of Transport, 2015), the six major ports handled over
90% percent of container traffic of the country. The table integrated the data
across from 2009 to 2014.

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Table 1
Ports Container
throughput
(2013/2014)
Crane
rate
Ship
rate
Vessel
rate
Capacity
used
Auckland 780,710 25-28 49-61 45-58 56%
Tauranga 741,341 32-36 60-70 46-60 60%
Napier 205,941 20-25 42-49 30-35 41%
Central
port(Wellington)
88,335 26-33 38-50 30-40 10%
Lyttelton 359,640 26-30 50-58 40-45 76%
Otago 180,349 25-31 53-58 45-55 46%
Source: Container productivity at New Zealand ports 2011, FIGS Report 2014, Deloitte
2014
NB: crane rate (the number of containers a crane lifts on and off a container ship in an
hour)
ship rate (the number of containers moved on and off a container ship in an hour)
vesselrate (the number of containers moved on and off acontainer ship in an hour
of labour)
With an overall review of the data, POAL exhibited a high productivity level in
terms of container operation, but claimed the second place to Port of Tauranga
in crane rate, ship rate, vessel rate and capacity utilization.
2.2 Challenges
A draft rule was publicised by Council of Auckland in September 2013 that
reclamation within the Port Precinct was a non-complying activity (NZIER,
2015), which confronted POAL with an austere situation.
Based on a global statistics provided by Organization for Economic Co-
operation and Development (OECD), New Zealand has seen a considerably
higher GDP growth rate than global. From 1998 to 2015, both imports and
exports trade increased by 10% as a share of GDP of New Zealand (NZIER,
2015).

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Figure 3 Historical and projected NZ trade as a share of GDP
Likewise, an incremental demand for container terminal capacity is foreseeable.
POAL’s volumes has increased at a rate of 10% or so for recent five years
(“Freight News”, 2015), accompanied with a continuous struggle to highly
increase the capacity. In its 2008 plan, POALproposed to extend the Fergusson
and Bledisloe terminals into one large area in order to expand the port's
capacity by 250% (“The Aucklander”, 2009), but it turned out to be invalid
because the extension consent had not notified the public in advance and was
overturned in a High Court ruling as a result (Walters, 2015). In 2016, POAL
addressed that the ports will shortly start a work to partially automate its
container terminal which would gave an additional 30-40 years of capacity to
the ports (“Ports of Auckland”, 2016.). All the strive is made to meet the
exponential growth of economy, nevertheless, the NZIER (2015) report
concluded that Auckland's port will run into capacity constraints no longer than
20 years provided the existing equipment and technology.
Besides, the visit of more and more larger ships requires longer berths which
POAL cannot avail. The largest ship out of last eight years visiting Auckland
was up to 345m in length which has already gone beyond central wharves’
reach (NZIER, 2015). However, either international tourists visit or local ferry
passengers’ services demand is increasing (NZIER, 2015).

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In 2015, a relocation proposal became an overwhelming issue to be discussed
(Sergel, 2015, Ross, n.d., Slade, 2016, &Sergel, 2016). Apart from some
political factors which will not be discussed in this report, with the boosting of
imports and exports trade, POAL has been confronted with a defining option
between either expansion or relocation. All the pros and cons stand affluent
reasons for their argumentations, while this report intends to give some
suggestions based on the assumption that POA would be relocated, which will
be elaborated with an assessment of new locations for POA and development
discussions of information management and logistics management.
3.0 Relocation analysis
3.1 Relocation options assessment
Chelsea wharf
Figure 4 Chelsea wharf location
Source: Google map
Located in Birkenhead of north shore city, Chelsea wharf is just like POAL with
the same particularly favourable natural conditions. There is a sugar refinery
factory in this quarter which has already made best use of the advantage of the

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geography in terms of exporting their products (“Chelsea”, 2014). However, the
only concern would be the height of harbour bridge limitation as the only access
to this wharf is to travel pass under the bridge. This bridge was built in 1955
allowing typically 27,500 tonnes ship to pass over, but as ship have increased
in size, the height would reach a bottleneck sooner or later (Scoop, 2012).
Port of Onehunga
Figure 5 Onehunga location
Source: Google map
Port of Onehunga is located in Manuka, currently serving as a smaller facility
mostly for coastal reshipment within New Zealand, such as bringing in cement
from Westport, and being a basement for fish industry as well (Ruane, 2016).
Benefitted by a natural shelter layout, Onehunga once thrived during the 19th
century as a timber port and a passenger port for travel to the lower North Island
and South Island, which was even larger than the current port in CBD (“New
Zealand History”, n.d.). This industry heritage might endorse the potential
prosperity of Port of Onehunga, but it is even more essential that located on the
north-eastern arm of Manukau Harbour, Onehunga is 10km from both
Auckland’s CBD and Auckland Airport, which makes it ideal to prioritise as a

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development location (“Panuku Development Auckland”, n.d.).
Nevertheless, the disadvantage of centralizing POAL in Onehunga is that this
area is also a population-intensified community where the port amenity will
probably arouse concerns for the local residents. As a matter of fact, a council
organization has been working on a plan to transform part of the Onehunga
waterfront into a more urban living oriented place (“Auckland Council”, 2015).
Wiri Inland port
Figure 6 Wiri Location
Source: Google map
Adjacent to Auckland airport in South Auckland, Wiri Inland port functions as
an essential traffic centre with rail exchange between the sea port, the
national road and rail freight networks. In early 2010, a new rail exchange
connected the inland port with the seaport, allowing Ports of Auckland to
reduce the amount of trucks that have to travel through the Auckland Central
area by up to 100,000 trips a year (“Conlinx”, n.d.). The exiting traffic chain
has already made it a high efficient freight hub. Around 70% of the containers
that come through the Auckland seaport either originate from or end up within
a 10 kilometre radius of the Wiri Inland Port (“Conlinxx”, n.d.). Therefore, if
POAL can be relocated in this port, the logistics cost could be expected to
decrease at a huge rate.

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Likewise, the entrance of this port would be the same problem to Wiri and to
Onehunga. The narrow mouth of this gulf created a shelter harbour and a
challenge to gigantic ships as well.
Other options
There are other options such as Muriwai (northwest of Auckland) and
Auckland’s Firth of Thames (southeast of Auckland) area under discussion of
all experts and researchers, but with a regard of environmental reconciliation,
these options seem to encounter resistance too hard to overcome (Slade, 2016
&Sergel, 2016).
In order to identify the advantages and disadvantages of the alternatives, the
following table assesses the five candidate sites in terms of geography, traffic
facilities, residence acceptance, environmental reconciliation and sustainability,
which have been discussed above. Among the criteria, the first three are
independent variables (IV) because their changes are negligible within certain
context, while the last one is dependent variables (DV). Thus the total rate
equation is:
T (Total rate) = V1xV2xV3+D1
This is because with any IV scoring 0, which means that it is a non-complying
condition, the alternative stands little chance to win out no matter what the other
advantages are. However, if any IV scores 1, it will have little impact on the total
rate because 1 also means a negative effect.

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Table 2
Ports IV1 IV2 IV3 DV1 Total rate
Sheltering
harbour
Residence
acceptance
Environmental
reconciliation
and
sustainability
Traffic
facilities
Onehunga 5 1 2 5 15
Wiri 5 2 2 5 25
Birkenhead
(Chelsea)
5 1 1 3 8
Muriwai 0 1 0 2 2
Firth of
Thames
(Auckland)
5 2 0 3 3
NB: Rate: 0-disagree 1-slightly disagree 2-hard to justify 3-slightly agree 4-agree 5-
strongly agree
To sum up, moving south is likely a feasible option to POA. The existing facilities
and equipment in Onehunga and Wiri with the highest rates has already met
the basic needs for a port and is quite prepared for an upgradation.
3.2 Information management and process design
Rather than expanding the capacity through reclamation of lands, the
incorporation of advanced technology can facilitate the information flow and
thus optimize a process design.
According to the theory of Hayes and Wheelwright (1984) on the relationship
between the process and product structure, POAL provides a high volume but
low variety of service and thus is supposed to adopt a repetitive and continuous
process design. Being the busiest ports in the world, Singapore and Hong
Kong’s experience is worth studying.

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3.2.1 Singapore and Hong Kong ports
A referring to Singapore port and Hong Kong port is not only because of their
outstanding efficiency, but also due to the factor of their land areas limitations.
Singapore claims a land of only about 3.5 square miles (“Wikepedia”, n.d.), but
handled 33.9 million TEUs in 2014, globally, with a second place only to
Shanghai (35.2 million TEUs) in terms of container traffic and the world’s
busiest in terms of transshipment cargo. Hong Kong values the land in such a
high level that the main wharfs only cover a land about 1.2 square miles (Feng,
n.d.) but also handled 20.1 million TEUs in 2015, dubbed as one of the world’s
busiest container ports (“Hong Kong Marine Department”, 2016).
Due to an essential geographic location, Singapore port has a connection of
200 shipping lines to 600 ports in 123 countries, which requires a very efficient
logistics -– so that containers can quickly and correctly transfer from incoming
to outgoing vessel (Gill, 2015). Singapore port is renown as a “Smart Port” with
its 4G broadband free wifi access and an agile and easy-operated mobile app
called myMaritime@SG to allow port users access to the latest information on
ship arrivals and departures, port and marine notices, and tidal information,
among other services (“Port Strategy”, 2015). This IT management strategy
enables Singapore to a just-in-time logistics.
Hong Kong port employs a comprehensive Vessel Traffic Service (VTS), with
radar surveillance and tracking capabilities as well as a fully integrated data
handling sub-system, covers all navigable waters of Hong Kong used by sea-
going vessels and ferries. The VTS system can track 10,000 targets in real time.
It comprises the latest VTS technology such as AIS, ECDIS, CCTV, new VHF-
direction finders and modern communications systems to further improve
navigation safety and operation efficiency (“Hong Kong Marine Department”,
2016).
POAL has adopted some information management as well. It outsourced the

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cargo-handling to the third-party stevedoring companies and transportation
services to other logistics corporations (“Ports of Auckland”, n.d.).
One of the collaborative strategy is the employment of a Vehicle Booking
System (VBS) provided by a third party (“Ports of Auckland”, n.d.). Being a
POAL customer, the user can access to VBS to book transferring for goods and
trace transportation information at a high transparency and flexibility (“1-Stop”,
n.d.). The VBS is active in 12 Terminals across Australia, New Zealand and
South East Asia. VBS facilitates a fast, streamlined truck/ship transfer for
container terminals (“1-Stop”, n.d.). A work flow chart can highlight a
transferring process with VBS.
Figure 2 VBS work flow chart
VBS illustrates a lean thinking of POAL. Lean thinking is a strategic initiative
that continuously seeks the ideal way to maximize customer value while
minimising waste (Gardiner, 2013). The robust data warehouse facilitates to
Transfer service
Booking generated Booking confirmed
Data
warehouse
Container
terminal
Data process
Data process
Transportation
center
Vehicles
Data process
Freight hub
VehiclesCustomers
Data process

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make full use of the equipment capacity and vehicles dispatch. With a fast data
processing, any adjustment can be conducted within a short period of time. It
identifies customers’ value by precisely clarifying an order description at the
beginning; it challenges all waste steps by enhancing the utilization of all
equipment and vehicles; its service flow continuously through remaining value-
added steps with the help of a robust data warehouse; it introduces pull as the
ports are running basically on the demand of its customers; and it simplifies the
steps and reduces waiting time.
In comparison with Singapore and Hong Kong, however, POAL’s operation
could be even leaner by integrating the information management. For example,
all the ships, vessels and cargos information can be looked up in its official
website. If these data are more accessible with a mobile device, the
convenience and efficiency could be drastically enhanced toward both external
and internal customers.
Those who opposed the relocation project would argue that POAL’s predicted
bottleneck could be tackled through the advancement of technology.
Nevertheless, as mentioned above, both pros and cons make sense to some
extent, and this report is based on an assumption of relocation.

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3.2.2 Deployment of freight hubs
Figure 6 Layout of imports and exports TEUs transportation of POAL
Source: NZIER
POAL relies highly on the trucks on road with logistics as implied by Figure 6.
It is estimated that approximately 80% of Port-related freight enters or leaves
through SH16 highway which is the most vital bottleneck centred in this road
network with the highest volume of trucks in Auckland (NZIER, 2015). With an
annual increase of vehicles, truck movements will be challenged.
If POAL moves out of this area, the traffic pressure would be dramatically
relieved. With Onehunga 10 minutes’ drive connected to State Highway 1 (SH1)
and Wiri just side by SH1, the convenience of road traffic can be enhanced.
Besides the road traffic improvement, it is feasible to shift more volumes to the
rail network. Currently there are 25 rail services being operated per week to
and from the Port, 16 of which are shuttles between Auckland CBD and Wiri
(NZIER, 2015). The initial investment on infrastructure is expensive though, the
long term reward is worthy. As a matter of fact, the proposal of building more
short but frequent interim railways is under investigation by Auckland Transport,
7%
72%
21%
Layoutof transportation
rail road on trucks trans-ship

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KiwiRail and POAL (NZIER, 2015). Provided a shuttle train connects Onehunga
and Wiri, a layout of twin port hubs can work collaboratively and thus enhance
the capacity and efficiency as well. Furthermore, these two hubs interaction can
also be facilitated by trans-ship.
POAL’s current freight network is as followed:
Figure 7 POAL’s freight network
If the port moves south and evolves into two port hubs as below, the layout can
be changed.

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Figure 8 Proposed freight network
The change to the freight network is based on a triple-A supply chain
management which is a collaborative supply chain approach based on agility,
adaptability and alignment (Lee, 2004). A twin hubs layout is feasible based on
the following statements.
·If POAL can move toward south either in Onehunga or Wiri, the agility could
be encompassed as a traffic centre could shift with a response to customers’
demand and other conditions such as weather, weight or genres of goods.
ONEHUNGA
WIRI
WAIKATO TAURANGA
PALMERSTON
NORTH
CHRISTCHURCH

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·In terms of adaptability, a decentralized structure would be more easily
scalable. Remodifying or upgrading could be implemented in one hub first
without affecting the operation of another hub.
·When these two hubs align with information flowing, risk shared and
responsibilities clarified, the supply chain can work even more closely as a
partner to form alignment.
4.0 Conclusionsand recommendation
4.1 Conclusions
To sum up, POAL’s current wharves in Waitematā Harbour played an essential
role to New Zealand’s economy. With the growth of imports and exports, POAL
is estimated to reach its capacity constrain within 20 years (NZIER, 2015).
Relocation proposal under investigation and discussion is a feasible resolution
to POAL’s situation.
The options of relocation include Onehunga, Wiri, Chelsea Wharf, Muriwai and
Auckland’s Firth of Thames. The outcome of an assessment indicated that
moving south is beneficial and Onehunga and Wiri ports concurrently owned by
POAL are the optimal plan.
With a reference to Singapore and Hong Kong’s ports, it is suggested that
incorporation of IT management and process design can highly enhance
capacity of ports and efficiency of logistics.
4.2 Recommendations
Aligned with the movement of the port in CBD, a logistics layout is supposed to
redeployed. The intended new investment into the infrastructure will facilitate
the establishment of a twin hubs railway network. As a result, this report
proposes that Onehunga and Wiri both serve as new ports centres connected

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by railway and trans-ship and shift the more volume of TEUs to rail
transportation.
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