Eastland Port – Industry Letter

I am writing this open letter to let you know the challenges currently facing Eastland Port, what we’re doing about it, and how the wider industry can help.
There has been justifiable frustration over port congestion from all sectors of the local forestry industry in recent weeks.

Like you, we are concerned that the entire industry is constrained when Eastland Port can’t keep pace with the flow of wood.

Unfortunately, this week’s scenario is no longer unusual and will occur again. We need to work together to ensure the region continues to maximise the benefit from our industry.

Our port operates in a highly variable environment. We are exposed to the south, and weather events impacting the port are well documented through history – from the sinking of the Star of Canada off Kaiti Beach in 1912 to the grounding of the Jody F Millennium in 2002.

We operate within a strict set of Standard Operating Procedures which are based on environmental parameters that have been well tested over time. The safe operation of the port is our paramount concern, to ensure we protect people, the environment and ultimately the entire East Coast forestry supply chain.

Please distribute this letter to all your staff and to your supply chain representatives. If you have a question about how the port operates or what our issues are, please feel free to ask us directly. We’re always happy to have a conversation.

REASONS FOR THE CONGESTION

The recent swell events are not unusual. What is unusual is the frequency with which they have arrived in recent months.

Continued bouts of disruptive wave patterns have led to 375 hours of shipping delays in just 10 weeks. That’s substantial when compared with the 700 shipping hours lost to bad weather during the preceding 12 months.

To put that in percentage terms, annually we lose around 8-10% of berth availability to weather delays. In the last 10 weeks t his has run at 22%. Traditionally t he May/June and September/October periods are when southerly weather patterns impact port operations. We’ve been dealt a tricky hand with the weather lately but It’s worth remembering that this time last year we had very little wood in our yards due to the Tolaga Bay floods that impacted the other end of the supply chain.

Weather can be a fickle mistress to all of us.

Historically, we’ve been able to store up to 140,000 jas on port and 40,000 jas at the Matawhero Log Yard. We have hit full capacity twice since 1 April. In 2018 Eastland Port’s stevedores and marshallers reduced stack size in the Southern Log Yard from seven to six metres for safety and efficiency reasons. This year the stack height was reduced in the Upper Log Yard to manage concerns from the general public and Gisborne District Council around noise levels, particularly at night. Our maximum capacity is now currently around 125,000 on port and 40,000 at Matawhero.

At present the port and the entire East Coast forest industry relies on a single log berth – Wharf 8.

A number of events recently have caused vessel delays – the most significant of which occurred after a ship crew member was injured lashing deck cargo and later died.

The graph below shows the relationship between Export and Cart-in volumes over the last three years. There is not a significant difference between this year and last year over the same period, indicating that shipping delays created by swell events are the primary reason for the current capacity constraints – rather than a significant increase in local production.

SOLUTIONS

With the rapid growth across forestry forcing change, Eastland Port is constantly adapting for the good of the industry. Below are some tangible solutions.

The port has identified for some time that having the ability to load two log ships at the same time will be required as the region’s harvest volumes grow. Consent for stage one of the twin berth development (repairs and maintenance on Wharf 6,Wharf 7, and the slipway) was granted in September 2018. An appeal delayed the start of work and the mediation process started this week. We’re working hard with the appellants to ensure the consented works can commence this summer as planned, and a lengthy and expensive Environment Court process is avoided. Consents for stage two of the twin berth development are currently being drafted and it’s hoped will be lodged by the end of this year, but this is contingent on the Stage 1 consents been upheld.

The Southern Log Yard is being extended to allow for an extra 10,000 jas of logs to be stored on site. Expected finish date is February 2020.

The second retaining wall is nearing completion behind Eastland Port’s new Wharfside Log Yard. The 1.8ha area will be able to store 15,000 tonnes of logs, eventually meaning fewer truck movements through the CBD and a more efficient forestry supply chain. Expected finish date is November 2019.

We’re looking at opening a 4th area at the Matawhero Log Yard to free up additional space. This will allow for the storage of a further 15,000 tonnes. Expected finish date is December 2019.

The port continues to work with exporters, stevedores and marshallers to understand what the port can do to assist them in ensuring vessels can be loaded as safely and efficiently as possible.

OTHER CONSIDERATIONS

We’re also thinking about some other strategies for the future.

We want to work with customers to see what scope there is for prioritising vessels that boost safety, efficiency, and optimise port operations. That is, ships that come in empty, load under deck, and are not draft restricted.

Every new exporter allowed on the port requires new row starts, thus decreasing overall port storage efficiency. Capping the number of exporters on port allows for more efficient use of the space we have.

INDUSTRY HELP

I wish to reassure our customers and the rest of the forestry industry that we’re doing all we can to alleviate the challenges you face in the last step of your product’s delivery.

We exported 2.98m tonnes of wood last financial year. We believe the port can export between 3.2m and 3.Sm tonnes of logs within the current footprint. Beyond this we’re going to need the second berth operational.

Our plans will help support the forestry industry and other regional primary exporters, including containerisation through coastal shipping.

Before we can upgrade the region’s port infrastructure we need resource consents – but like others in the forest industry we’ve struggled with legislative delays in this area.

There are some who believe that no port development should be allowed. As we work to get the twin berth development up and running, your support in the consenting process and the public conversation has never been more important.

By working with industry over the last 10 years we have created the most efficient log port in NZ, exporting 3m tons over 12ha of land and across a single berth, but the six ships currently languishing in the bay are a stark visual reminder of why we need your support for the next stage of development.

Yours sincerely

Andrew Gaddum
General Manager  |  Eastland Port