statement of evidence in chief of anthony (tony) boyle on behalf … · 2019-04-06 · 16100872_1...
TRANSCRIPT
Before a Board of Inquiry Ruakura Development Plan Change Request
IN THE MATTER of the Resource Management Act 1991
AND
IN THE MATTER of a Board of Inquiry appointed under section 149J of the Resource Management Act 1991 to consider a Plan Change requested by Tainui Group Holdings Limited and Chedworth Properties Limited
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth Properties Ltd
26 February 2014
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
1
Summary
1. Inland Ports, their presence and purpose, are a relatively recent
development and therefore take some understanding. An Inland Port
serves a number of purposes but is primarily designed to be attractive to
a range of tenants including: retail warehouses, distribution centres,
freight forwarders and other logistics organisations.
2. Although logistics and the supply chain affect everyday life they are
almost invisible and therefore the detailed process and procedures that
are in place are difficult to understand and can lead to incorrect
assumptions.
3. This evidence also addresses points raised in submissions on the
operational aspects of the inland port provided for by the Plan Change.
4. For an Inland Port to operate successfully the location is paramount. This
includes unencumbered access to efficient road and rail modes.
Ownership, size and shape are also critical. There are examples outside
New Zealand (e.g. Australia’s Albury Wodonga) where the establishment
of an Inland Port was seen by the local authority as a catalyst to creating
employment. However, after the investment of not insignificant sums of
public money, the project failed because the location was not right, multi-
party ownership and a lack of understanding of the controlled staging
required for such a development. This evidence addresses these issues
as they have been raised by submitters.
Introduction
5. My name is Tony Boyle. I am an independent expert on ship, port,
container terminal, operations and freight logistics.
6. I hold the qualifications of Master Mariner with additional studies in
transport and I am a Fellow of the Chartered Institute of Transport and
Logistics. Between 1980 and 1995 I was regional director of operations
for Hamburg-Sudamerikanische Dampfschifffahrts-Gesellschaft
(Hamburg Sud), the largest German privately owned shipping line.
Hamburg Sud is headquartered in Hamburg and my role covered many
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
2
facets of the ship operating business as well as being a member of the
global strategic planning team.
7. Seventeen years ago I established AmZ Limited, a consultancy and
project management company specialising in “strategy and optimisation
management for container terminals, ports, international shipping and
transport.” I also provide advice on requirements for risk management,
environmental and security protocols pertaining to shipping, port
operations and landside logistics.
8. In 1997 AmZ was contracted by the Port of Tauranga Limited to develop,
from a Greenfield start, the Tauranga Container Terminal including the
inland MetroPort operation in Onehunga, Auckland. This was achieved
over a three year period.
9. AmZ has been involved to a greater or lesser extent in the development
of most of the marine and rail serviced container terminals in New
Zealand and draws upon significant off shore experience in Australia,
Pacific Islands, PNG, Indonesia, South Korea, Dubai, Abu Dhabi, Oman,
Jordan, Croatia, Bahamas and Greece.
10. While, compared to marine terminals, Inland Ports are a comparative
recent development; I have been involved in their establishment since
the late 1990’s. As part of a larger project for Port of Brisbane
Corporation I developed a strategy that involved the establishment of a
network of small Inland Ports in South East Queensland and North West
New South Wales. More recently I have completed an assignment on
behalf of the Australian publicly listed Stockland Corporation that
involved operational improvements for what is described as the largest
warehousing and distribution centre in the southern hemisphere together
with the development of a “greenfield” Inland Port south west of Sydney.
Additionally I completed an 18 month project on behalf of the Australian
Commonwealth Government to establish an Inland Port on surplus
Defence land in Moorebank Avenue, 32 kilometres inland from Port
Botany.
11. Tainui Group Holdings Limited (TGH) engaged AmZ in 2009 to advise
on the business of establishing and operating an Inland Port at Ruakura.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
3
In particular, I have been involved in the master planning for the inland
port and logistics hub, developed a business case model for Ruakura,
and now I am preparing a development programme to take the Ruakura
Inland Port and warehousing and distribution centre to the market. This
is consistent with my experience where, at varying levels, I have
managed or organised and undertaken physical review of the
establishment and operation of inland port operations in Jordan, United
States, New Zealand (MetroPort) and Australia. Additionally, and
specifically relative to the Ruakura development, is my involvement with
rail operators, especially Kiwi Rail, in planning for the future and a project
recently completed for the Ministry of Transport analysing container
terminal capacity across all New Zealand ports up to 2042.
12. In preparing this evidence I have considered and addressed comments
and concerns raised by submitters that are within the area of my
expertise.
Code of Conduct
13. I confirm that I have read the ‘Code of Conduct for Expert Witnesses’ as
contained in the Environment Court Practice Note 2011. I agree to
comply with this Code of Conduct. In particular, unless I state otherwise,
this evidence is within my sphere of expertise and I have not omitted to
consider material facts known to me that might alter or detract from the
opinions I express.
Scope of Evidence
14. This statement of evidence is specific to the design and operation of the
Inland Port and surrounds which are all areas within my area of
expertise. In addition to the Ruakura site other sites in the area that
potentially are able to replicate the Ruakura Inland port are reviewed on
a comparable basis. The workings of the marine terminals at Ports of
Auckland and Tauranga are addressed including the impact of
increasing freight volume. I also include comment within my area of
expertise on hinterland or satellite logistical aspects of the Ruakura
Inland Port.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
4
15. Development of Containerisation in New Zealand
Containerisation commenced in this country with the arrival of the ship
Columbus New Zealand in June 1971 as shown at Port Chalmers on
her maiden voyage.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
5
Containerisation was as important to New Zealand’s trade development as the
first shipment of frozen meat in 1882. The arrival of the ship in Wellington
created considerable interest as depicted in this article on the front page of the
Dominion newspaper
.
It is estimated that in the first twelve months of containerisation in New Zealand
all container ports combined handled approximately 10,000 twenty foot
equivalent containers (TEUS). Now 42 years after this event the total is breaking
through 2.5 million teus.
To accommodate this growth has required significant capital expenditure in port
facilities and this continues as ships get larger and volume increases.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
6
Port of Auckland Development
Above: Auckland container terminal 1971
Below: Auckland container terminal 2011, note second terminal in
middle of the port.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
7
Port of Tauranga Development
Above Tauranga Terminal 2003
Below: Tauranga Terminal 2033
16. The Demand
The majority of trades around the globe are now fully containerised with
few, bulk excluded, non-containerised services operating. Globally it is
estimated by Drewry Shipping, a leading shipping researcher and
commentator, that this year 700 million teus will be transported by sea.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
8
Because the base line is so large a small increase in volume places
significant strain on existing facilities.
Drewry Shipping states that the global container port industry is now so
large that even with modest growth; absolute throughputs will still
increase dramatically.
Drewry concluded that by 2017, ports will have to accommodate
another 190 million teu. To put this into context, that is more than the
entire 2012 throughput of North American, European and Middle
Eastern ports combined.
Although in comparison New Zealand volumes are small the impact on
port facilities and hinterland is proportionately similar to the overall
global forecasts.
Using the Drewry assumptions the increase in volume that ports of
Auckland and Tauranga are expected to handle are depicted in the
following graphs
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
9
0
500000
1000000
1500000
2000000
2500000
3000000
1 2 3 4 5 6 7
2013 - 2043
Auckland
0
500000
1000000
1500000
2000000
2500000
1 2 3 4 5 6 7
2013 -2043
Tauranga
0
1000000
2000000
3000000
4000000
5000000
6000000
1 2 3 4 5 6 7
2013 - 2043
Upper North Island
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
10
Ruakura is seen as being an integral part of the solution for the Upper
North Island to accommodate the increasing volume.
The concept of an Inland Port such as is planned for Ruakura is not
unique as European, U.S., Asian and Australian ports are increasingly
looking towards or planning for similar facilities that will enable marine
terminals to accommodate volume increases.
Key Findings from Report
17. The proposed development of Ruakura as an Inland Port is a unique
opportunity. It is unusual to find a site that offers so many benefits.
Timing is also a critical factor and the proposed timing of Ruakura
strongly supports the proposal. Ports of Auckland and Tauranga are
forecasting capacity issues. The traditional warehousing areas in South
Auckland and Bay of Plenty are limited in having access to suitably
valued land, while traffic congestion in and around existing warehousing
and distribution locations is increasing.
18. As containerisation developed in New Zealand (with the first container
vessel arriving in 1971), it was initially thought that Palmerston North, as
the geographic centre of the country, would be the ideal location for
warehousing and distribution centres to be located. Several have been
established there, Toyota, Postie Plus and others. However current
thinking is that geography is not as critical as the location of consumers.
As a rule of thumb, consumers are located 25% between Invercargill and
a line between Palmerston North and Wellington with the remaining 75%
north of this line. Results of the census undertaken in 2013 show that 2
million people live within a 145km radius of Ruakura. Considering the
population spread within this 75% zone is an inverted pear shape with
Palmerston North at the top, then Ruakura is perfectly located right in
the middle of the bulge of the pear and has the potential to become the
fulcrum for warehousing and distribution in the
Auckland/Hamilton/Tauranga triangle.
Ruakura has a number of unique features that underline its “fit for
purpose” status. Apart from location, topographical and access strengths
the single ownership aspect is also extremely important. Typically
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
11
developers are highly geared with a diverse number of interests and their
developments are subdivided and sold off in parcelled lots. Infrastructure
developments such as Ruakura are long term and require the developer
or sponsor to be committed. Globally long term investments are favoured
by endowment and pension funds rather than the highly geared mixed
ownership developer.
19. In addition to single ownership, Ruakura is able to accommodate
significant growth in a carefully staged manner. While there are other
smaller sites in the Waikato/Bay of Plenty that are potential options to
establish an Inland Port the Ruakura site is future proofed in that it has
the ability to aggregate warehousing and distribution operations in a
single site over many decades. When warehousing and distribution
operations are centralised or clustered in one location there are
significant economies of scale as duplication of infrastructure is not
required. Centralisation creates downstream benefits as compatible
operators of warehousing and distribution facilities are able to
interchange goods and services without leaving the single secure site. In
such an environment specialised skills evolve that further enhance the
attractiveness of the site to potential users. Downstream clustering
benefits coupled with a single owner setting and maintain overarching
“Precinct Rules” results in a quality development. The proposed Inland
Port at Ruakura will be fully certified and compliant with all border
security requirements. This means, for example, that a container of
export cargo can be received thorough the gate at Ruakura and have the
same status as though it has been received for shipment at a marine
terminal. A Received for Shipment bill of lading can be issued and the
exporter is then able to commence the final stages of the financial
transaction involved in the shipment. Similarly with import containers the
contents are considered still in transit and not subject to GST or customs
duty until they pass though the outward gate at the Ruakura Inland Port.
The significant point of differentiation planned for Ruakura is that the
border security boundary will include the warehousing and distribution
area. The intention is that containers of imported goods be moved
unencumbered from the storage yard area to the designated warehouse.
At the warehouse goods can be assembled, packaged, sorted, graded,
stored, tested, re-packed or processed in a variety of ways and held for
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
12
distribution in a totally secure and customs bonded environment. This
enables importers to prepare goods for consumption prior to distribution
and prior to duties and/or taxes being applied. Similarly there is the
potential to value add local content to goods imported and re-exported
without requiring bank guarantees or other financial obligations to be met
as is required for temporary importation of goods.
20. At a high level, the operation of an Inland Port such as Ruakura is simple;
imported containerised goods arrive primarily by rail. Containers are
removed from the train and held in a pre-planned location in a holding
yard. Owners of the goods or their agents operating warehousing and
distribution facilities adjacent to and within the same secure zone as the
rail interchange area arrange with the operator of the holding yard for the
delivery of the intact containers to a nominated location where the
container is unpacked and the empty container returned to the holding
yard. The empty container may be refilled with export cargo from a site
within the secure area of the Inland Port or transferred, most likely by
truck, to an export packing facility outside the secure Inland Port.
Alternatively the empty container will be placed back on rail for transport
from the Inland Port to some other location which could be a marine
terminal or an export packing facility such as the Fonterra site in
Crawford Street.
21. The start-up phase is likely to be a low volume, truck only operation
handling up to 1,000 containers per month. Trains will be introduced
when the volume becomes sustainable, currently estimated to be in the
vicinity of 12,000 teus (twenty foot equivalent units) per annum. Initially
trains will be loaded and unloaded using reach stackers. As volume
increases, the container handling system will change from reach stacker
to overhead gantry and the storage yard will be reconfigured to a high
density gantry operation. From start-up containers will be transported to
and from warehousing and distribution areas on purpose built tractor
trailer units which are specially designed to handle loads that are in
excess of the axle loadings permitted on the national highway system.
Processes rely on sophisticated support systems specifically developed
for terminal operations. These systems interface with all parties involved
in the venture including security, border control agencies, freight
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
13
forwarders, cargo owners, road and rail operators, marine terminals,
shipping companies and any other party who has a genuine interest in
the venture. This visibility insures total compliance with all relevant
protocols.
22. To be successful, Inland Ports require significant areas of land. The site
is required to be able to accommodate trains that arrive from the marine
terminals. Rail sidings need to be the same length as those at the marine
terminals so that trains can operate at full capacity. To provide flexibility
of operation at Ruakura and to interface with traffic on the East Coast
Main Trunk line a rail grid with four tracks each 900 metres in length is
considered optimal. The area around the rail track requires heavy duty
pavement so that container handling machinery with high axle loadings
can operate safely. Road vehicle access is also necessary requiring an
area that will allow trucks to arrive, be processed, queue during peaks
and be loaded/unloaded in a safe and efficient environment.
23. Container storage areas are designed to accommodate the volume of
containers that move in and out of the facility while at the same time
having sufficient space to allow containers to be held for short periods of
time, dwell time, awaiting change of status, packing/unpacking.
24. Efficient Warehousing requires large foot prints. Road ways are also an
integral part of the warehouse operation as access is needed to truck
docks at each warehouse thereby allowing goods to arrive or depart. The
alternative sites in the Waikato being suggested as suitable for an Inland
Port do not have the area of land in single ownership that Ruakura has
in such close proximity to rail and road connections. Specifically,
Ruakura has immediate access to the Waikato Expressway and Ruakura
is able to accommodate 900 metre rail sidings considered necessary to
accommodate future growth.
25. The initial business concept for Ruakura is based on existing facilities
and capturing some of the growth identified in the National Freight
Demand Study, a major study undertaken for the Ministries of Transport
and Economic Development and Land Transport New Zealand in 2008
and updated at the end of 2013.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
14
26. The Ruakura Inland Port operations will not conflict with the growth of
airfreight at Hamilton Airport. On a global basis there is a clear
delineation between products that can absorb the cost of airfreight
versus the lower cost per kilometre of moving goods by sea.
27. In the long term Ruakura is seen as a support and service provider for
the economic linkage between the Auckland, Hamilton and Tauranga
(AHT) city-regions. The scale of Ruakura provides for a staged
development that will accommodate the peaks expected at the marine
terminals through the introduction of larger vessels into the New Zealand
supply chain. The planning also provides for organic growth associated
with increasing population while the ownership status of the land enables
the site to be developed and managed so that the operation will grow as
demand requires.
28. For this reason the Ruakura site has been planned to enable
development to take place based on organic or, should circumstances
require, stepped growth. This requires careful planning as the two
options have quite different levers when it comes to staging. The first
stage is planned to be a simple operation with no rail connection onto
the site. The logistics industry is very conservative, and tentative market
testing indicates a slow start up requirement for stage one. Again, based
on market soundings, the industry recognises that Ruakura is at the
beginning of the consent process. However, once Ruakura is consented
the logistics industry will include it in their future plans. It is at this stage
that step changes in growth and demand will occur and the planning
undertaken for Ruakura has made provision for this.
29. Modelling indicates that the Logistics Area shown will handle close to
400,000 containers per year when fully built. The majority of these
containers will arrive loaded and be back loaded as exports or be
relocated empty, adding up to 800,000 container movements per annum.
There is also a requirement for the rail grid to unload and load containers
for the domestic market; a figure of 100,000 container movements is
considered realistic based on current volumes handled by KiwiRail on
behalf of Auckland domestic freight operators. The capacity of the
Ruakura Inland Port will be determined by the rail interface. Present
practice is to schedule a turn time of two hours for a train carrying 120
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
15
containers. For Ruakura the planned four tracks provide for continuous
work on trains; one is a working track, one is an arrival track; one is a
departure track and one is a locomotive release track. This means that
during each two hour period a train will have 120 containers unloaded
and 120 loaded. Assuming a 22 hour working day each day of the year,
a total of 964,000 containers could be handled. As this is based on
current handling systems it is a conservative figure, hence the indicative
capacity of 1 million containers per annum.
30. One million containers per annum equates to potentially twelve million
freight tonnes. To put this in context, Port of Tauranga presently receives
for export and loads on ships between six and seven million freight
tonnes of bulk logs per annum. These arrive by road and rail. Studies by
Ports of Auckland, Port of Tauranga and Ministry of Transport agree that
container volume will increase by 5% year on year. Ports of Auckland
are forecasting an increase in volume from 0.9 million to 4.1 million
containers over the next 28 years. Similar increases, but from a lower
base, are being forecast by Port of Tauranga. It is therefore considered
prudent to design Ruakura to have a capacity of 1 million containers in
forty to fifty years’ time.
Response to Issues in Submissions
31. Some submitters, specifically Halsey (submitter 105982), The Centre for
Redefining Progress (submitter 106528), Smith (submitter 106858)
Wisnesky (submitter 106888), have questioned the location of the inland
port in relation to existing land uses including residential dwellings, the
University and schools.
32. In my experience it is not unusual for logistics operations to be located
next to other activities such as residential homes and schools. The
modern warehouse used for storing goods and as a distribution base has
minimal impact on neighbouring activities. In Auckland the rail grid that
services the port of Auckland container terminal is in close proximity to
high density residential developments, and at Auckland Airport
warehousing complexes are immediately next door to hotels.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
16
33. The Freightlines and Fonterra sites referred to by The Centre for
Redefining Progress, (submitter 106528), have been developed for a
single customer specific purpose. At the time Ruakura was not available
as an option and in my opinion it is doubtful if Ruakura would have been
considered an option because there was no commitment by government
to construct the Waikato Expressway. The East Coast Main Trunk rail
line that runs through the Ruakura site is more suited to accommodating
container trains than the North Island Main Trunk running through
Hamilton as this has to accommodate all of the North Island Main Trunk
traffic plus the East Coast Main Trunk traffic.
34. Smith (submitter 106858) submits that the activities to be undertaken at
Ruakura can be absorbed into storage space at the ports of Auckland
and Tauranga. To avoid doubt, the storage or yard segment of the
proposed Ruakura operation is an ancillary service supporting the main
activity of warehousing and distribution. Warehousing and distribution as
envisaged at Ruakura are not core activities of either Ports of Auckland
or Port of Tauranga. These are marine ports servicing ocean going
vessels; Ruakura is an Inland Port supporting warehousing and
distribution activities.
35. Ports of Auckland does have a non-marine terminal at Wiri that is on a
far smaller scale than Ruakura while Port of Tauranga has a
comparatively small scale warehousing and distribution centre as part of
the Tapper Transport subsidiary next door to MetroPort Auckland. At
Port of Tauranga’s Sulphur Point terminal there are three warehousing
and packing facilities; one is a total Fonterra operation while the other
two are primarily used by the forestry industry for assembling processed
products and packing containers for export. The container storage area
at Sulphur Point is under space pressure and Port of Tauranga is
considering options including removing at least one of these packing
facilities.
36. Port of Tauranga has recognised the move to the Inland Port concept
now developing overseas. This is evidenced by the Port of Tauranga
submission, (submitter 106668), where it states “The aggregation of
cargo at inland ports, such as that proposed for Ruakura is viewed
favourably by the Port.” Additionally Port of Tauranga has entered into
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
17
an agreement in principle with the Selwyn District Council to establish a
low volume Inland Port at Rolleston.
37. Sites such as Te Rapa and Hopuhopu referred to by submitters do not
have the same attributes as Ruakura in respect of: single ownership,
location relative to road and rail, scalability, shape, (enabling 900 metre
rail grid) and access to labour. Ruakura has been master planned so that
volume driven staged development will happen. Single ownership is a
crucial factor in such long term developments. For rail services Ruakura
is dependent upon the East Coast Main Trunk rail line. The East Coast
Main Trunk is a profitable part of KiwiRail’s business. While representing
five per cent of the total network it generates twenty eight per cent of the
revenue. The operation at Ruakura will further increase the volumes of
freight transported by rail and the profitability of the rail network. There
are presently seven passing loops between Tauranga and Hamilton and
funds have been provided to increase the number of passing loops to
nine. An increase in passing loops means an increase in capacity and
clearly demonstrates the commitment of KiwiRail to the East Coast Main
Trunk. Ruakura will be using primarily new capacity by way of the
upgraded East Coast Main Trunk line for rail and the yet to be built
Waikato Expressway whereas most other sites would be dependent
upon existing transport corridors.
38. Lauren (submitter 106864) comments about noise and perceived
pollution from the site especially the requirement to operate 24 hours per
day. This requirement mirrors the working hours of rail operations at the
marine terminals.
39. The Ruakura Inland Port has been carefully designed to be a fit-for-
purpose, fully integrated transportation and distribution centre
constructed close to residential and educational zones and activities.
There is no heavy industry included. Being a Greenfield site allows for
incorporation of latest technology and handling systems including
construction of a rail grid and container storage yard that dove tail into
future growth of the marine terminals at Tauranga and Auckland. Existing
facilities in Hamilton West are limited in what they can offer by way of
expansion to handle additional volume. In particular road vehicles
serving the Ruakura site will be able to access the Waikato Expressway
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
18
directly from the Inland Port with only local Hamilton traffic using the local
roads.
40. To be compatible with the working hours of the marine terminals and to
fully utilise the rail network it is necessary for a facility such as planned
at Ruakura to operate 24/7.
41. In addition to expressing concerns about location for the siting of an
Inland Port Fairview Downs Residents & Owners Association (submitter
106923) submits that there is already adequate capacity at facilities
owned and operated by Fonterra and Mainfreight. It is also submitted
that locating an Inland Port at Ruakura will see “dead heading” of
containers where they are transported to Ruakura for unpacking and the
contents returned to Auckland by truck.
42. KiwiRail is already operating a freight hub in Hamilton which is integrated
into the Fonterra Crawford Street facility whereas Mainfreight is
developing a new facility to replace the existing one which it has out
grown. This is consistent with Mainfreight’s on-going expansion with new
larger facilities established in a number of New Zealand cities over the
past eighteen months. The Mainfreight model is totally different to the
Ruakura model with Mainfreight’s core business being that of a transport
operator which Ruakura is not.
43. Ruakura will reduce the amount of “dead heading” of containers.
Today, containers of import cargo are discharged from a ship in
Tauranga, railed through Ruakura to MetroPort Auckland, trucked to an
unpack facility, returned to MetroPort by truck empty then railed empty
to Fonterra’s Crawford Street Hamilton site for packing before railing to
Port of Tauranga for loading. Fonterra Crawford Street receives 38,000
empty containers per year for packing. When commissioned and
operational Ruakura will receive these import containers by rail from Port
of Tauranga. Goods will be unpacked within the Ruakura logistics zone
and the empty container will travel eleven kilometres to Crawford Street
for export packing.
44. The location of Ruakura is port neutral. In other words one of the key
strengths of Ruakura is that it is equidistant to the marine terminals of
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
19
Auckland and Tauranga. This enables containers to be discharged at
either port and be transferred to Ruakura with neither port having an
inherent advantage in terms of distance. Fonterra recognised this when
it set up its container packing facility at Crawford Street. Fonterra is able
to use either Auckland or Tauranga because of their being equidistant.
45. Fairview Downs Residents & Owners Association (submitter 106923)
questions the efficiency of such an operation and refers to a report
prepared by Aurecon which was commissioned by the Waikato Regional
Council and specifically refers to Hamilton and the Waikato. The Aurecon
report “question whether the inland port development has an available
catchment/demand in Hamilton that will enable them to create an
efficient and cost effective operation” seems to overlook the fact that
Ruakura is designed to support, as a minimum, the entire upper North
Island. Ruakura has never been considered as just supplying services to
the Hamilton catchment/demand.
46. My previous experience includes the setting up and initial management
of the Tauranga Container Terminal and establishment of MetroPort. At
the time a number of experienced and well informed industry operators
and observers expressed concern about the viability of railing containers
between Tauranga and MetroPort South Auckland when surely it made
more sense for the ship to call directly at Port of Auckland. Today there
are over 100,000 containers transported annually by rail between the two
locations. The enabling triangulation of freight that Ruakura will provide
is similar to the Tauranga/MetroPort concept.
47. Lauren (submitter 106864) also submits that the Inland Port and by
association warehouse and distribution operation represent old-industry
low paid jobs rather than high wealth Silicon Valley type jobs which all
economies aspire to.
48. In my experience, because freight movements and the logistics of a
supply chain are so integrated into the world’s economy, there is a level
of misunderstanding around the leading edge technology that supports
the industry. It is modern technology that renders logistics almost
invisible in our everyday lives. Recently the highly respected Drewry
Shipping commented that the rapidly developing software and systems
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
20
in the port and logistics industry enable containers to be handled with
levels of efficiency significantly beyond what was available twenty years
ago. Ruakura Inland Port will be the most modern logistics facility in New
Zealand and probably the Pacific, including Australia. Being next to
Waikato University creates an environment whereby students and
graduates will be able to study a working complex thereby enhancing the
opportunity for Waikato University to expand its transport and logistics
campus.
49. Throughout the initial design process operational activities are linked to
the constantly evolving systems development aimed at automation.
Automation of container operations is well-developed and it is anticipated
that most of the marine terminals in Australia will be automated by the
end of next year, 2015. The driver for automation is safety as it removes
the operator from the container handling equipment to an upskilled
indoors location where the container handling equipment is monitored
and managed remotely. Automation only applies to the container
handling operation and therefore does not represent a significant number
of jobs when the operation changes from manual to auto.
50. A similar concern is expressed by Cooper (submitter 106740) that a
recent land purchase by Port of Tauranga adjacent to the existing
MetroPort operation signals an intention by Port of Tauranga to add to
the MetroPort operation.
51. At the date of this evidence Port of Tauranga has not divulged what
specific activities will take place on the land recently acquired adjacent
to MetroPort. However the site is a total of 6.8 hectares, which is
significantly smaller than the Ruakura site, and has growth limitations.
52. The Silverdale Residents Group, (submitter 107062) in their submission
express concern about the height of the container stacks. Container
stacks within the nominated area are shown on the “the plan change
(TGHL/CPL submission version)” page 22 “Special Controls Ruakura
Logistics Area” in the zone shaded blue.
53. Containers held in these blocks are separated from the rest of the
stacking area as being containers “awaiting inspection”. This is an area
where containers are held in a section of the terminal that is marked as
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
21
an area that people are likely to move around within and therefore
subject to strict safety rules. In practical terms it is unlikely that
(exceptional unforeseen circumstance excluded) containers will be
stacked beyond two high during normal operations. Full or loaded
containers are built and certified to be safely stacked nine high which is
necessary on board ships. Ruakura will stack a maximum of four full
containers on top of each other up to a maximum of 12 metres high.
Empty containers at Ruakura that will be held in the area adjacent to the
Expressway ramp leading up to the East Coast Main Trunk over bridge
will be stacked up to nine high which will not exceed 25 metres in height.
54. The Silverdale Residents Group, (submitter 107062) also raises concern
about noise generated by container repairs being undertaken on the site
that will specifically affect parties close to the Spine Road.
55. Container maintenance, including repairs, is an integral part of any
facility where containers are received and delivered. It is not anticipated
that major repairs will be undertaken at the Ruakura Inland Port as this
requires specialised equipment such as frame straightening jigs. The
presses and hydraulic equipment are permanently set into the ground
and this limits site flexibility. Normal practice across New Zealand is for
containers requiring major repairs to be moved to overseas locations that
are set up especially to handle these repairs.
56. Referring to “the plan change (TGHL/CPL submission version)” page 22
“Special Controls Ruakura Logistics Area” attention is drawn to the high
density container stacks and building on the eastern boundary against
the Waikato Expressway. This area is designated as empty stacking and
repair area. The building will be for repairs and the majority of, if not all,
repair work will be undertaken in this facility. It is considered to be the
most suitable location as the Expressway over the East Coast Main
Trunk ramp builds up at this location thereby creating a wall. The location
is over one kilometre from the Spine Road.
57. Auckland Transport (submitter 106498) has raised the question of
potential conflict between the increasing numbers of commuter trains
running on the Auckland network and freight trains running between
Auckland Port and Ruakura.
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
22
58. The developers of Ruakura are very aware that the increase of commuter
trains on the Auckland network has the potential to cause congestion.
Simply put; slow freight trains and fast light rail commuter trains on the
same network are incompatible. It is understood that stake holders, in
particular KiwiRail and Auckland Transport are working towards a
solution known as the third main which will enable freight trains to run on
a freight only line. Modelling around Ruakura indicates that when fully
complete the network will be required to accommodate four additional
trains per 24 hour period in each direction between Ports of Auckland
and Ruakura. These trains will be longer and heavier than at present and
will require splitting and shunting at the Ports of Auckland.
59. Ruakura is equidistant from the ports of Auckland and Tauranga. It is
therefore port neutral and should the main trunk between the Port of
Auckland and Pukekohe experience congestion then containers can be
handled via the Port of Tauranga.
NZ Transport Agency (submitter 107091), also raises the question of
possible conflict with the Auckland passenger network and, on a local
basis, additional road traffic generated by Ruakura. The number of trains
will increase and the transfer of container traffic from road to rail will be
a direct benefit of the Ruakura development.
In a development such as Ruakura a key element is Risk Management.
Shang, (submitter 106595), questions the Ruakura risk management
plan and lists specific questions pertaining to buffer zone management
such as what form of emergency plan will be in place, who is responsible
and then asks about compensation in the event there is a breach.
60. The owner of the Ruakura development is also the developer and
landlord. Tight protocols will be in place for each phase of the project.
For example when Expressions of Interest are sought to appoint a
terminal operator a pre-qualification requirement will be that interested
parties submit a detailed risk management profile. This process is one
component of the process to ensure the designated party delivers a ‘best
practice’ operation.
61. Similarly van Beek, (submitter 106623), and Fairview Downs Residents
& Owners Association, (submitter 106923), identify the handling of
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
23
hazardous products at Ruakura and ask what measures will be in place
to insure these are handled safely.
62. Today, significant quantities of hazardous materials are routinely
handled at sites around Hamilton. Ruakura will be no different. Ruakura
is being developed to handle containerised cargo and there will be no
bulk storage of hazardous products. Handling and storage of hazardous
materials in New Zealand is governed by the Hazardous Substances and
New Organisms Act 1996 (HSNO Act), its regulations, and other laws
that manage risks from hazardous substances. This is also part of the
Risk Management plan. (Handling includes transportation). Storage is
strictly governed by the Act and amongst other things this includes
employee training, product separation, provision of first response
equipment and especially constructed/designated locations within a
complex such as is planned for Ruakura for the placement of damaged
or leaking hazardous containers.
63. Some submitters have recognised the benefits that will be generated by
the Ruakura Inland Port.
64. Property Council NZ, (submitter 106882), underlines the national
significance of the project while Port of Tauranga (submitter 10668)
understands the long term benefits of having an aggregation facility
where by a centralised packing and unpacking facility improve the
logistics supply chain. Port of Tauranga is the leading New Zealand port
listed on the New Zealand stock exchange. As a major port with a
responsibility to shareholders it is required, amongst other things, to
have in place a long term strategy that includes acknowledgement of
overseas trends. Port of Tauranga support for cargo aggregation at
inland ports recognises the trend in Europe and North America to move
containers out of marine terminals as waterfront land constraints start to
impact on operational efficiencies as volumes increase at the marine
terminals and introduction of larger ships requires the marine terminal to
receive and hold higher numbers of containers as peaks increase.
AgResearch (submitter 106821) commissioned the international
consulting company AECOM to submit on behalf of AgResearch.
AECOM, taking an international approach, considers the development
envisaged is of significant benefit to Hamilton City in terms of attracting
16100872_1
Statement of Evidence in Chief of Anthony (Tony) Boyle on behalf of Tainui Group Holdings Ltd and Chedworth
Properties Ltd
24
investment, creating employment and further developing the research
hub.
Conclusions
65. At the end of 2013 there were eleven marine ports in New Zealand
equipped with container handling facilities. These handled an annualised
combined 2.6 million teus across their berths. Two ports, Tauranga and
Auckland, handled 65% of this volume. A simple but accepted rule is that
container volume grows at 1.5% of GDP.
66. Ruakura Inland Port is a long term staged development that is in line with
overseas trends where Inland Ports are now accepted as being an
adjunct to marine terminals.
67. There are no other sites in the Upper North Island that have the
characteristics and scale necessary to enable a long term staged
development such as Ruakura.
68. By industry standards the Ruakura Inland Port is a carefully planned
facility that enables controlled, demand-driven development. Operational
planning is highly sensitive to the location relative to other activities in
the area. Being a Greenfield start up enables latest technological
developments to be employed as a major part of any necessary
mitigation requirements.
___________________________
Tony Boyle
26 February 2014