Anchoring the industrial sector

Anchoring the industrial sector

Industrial Workplace – August 2019

Anchoring the industrial sector

Inland ports are intermodal hubs that support the transportation of freight to benefit the supply chain.

They are generating jobs in the regions and helping to ease pressures on land and existing industrial property stock in the major centres. They provide the means to transport freight efficiently via a range of modes – including rail – and in turn reduce carbon emissions and costs.

A shortage of warehousing and distribution facilities close to major ports means there are cost efficiencies for businesses based within these inland ports and a more effective and efficient distribution path is created.

Ports of Auckland had been considering an inland freight hub in Waikato for many years.

It had identified that supply-chain movements in the golden triangle of Auckland, Hamilton and Tauranga needed to be streamlined and resilient and it has come a step closer with the ribbon-cutting on its 33-hectare inland port in Horotiu, north of Hamilton.

The Waikato Freight Hub signals a commitment to a New Zealand-wide supply chain network connecting the regions with international markets and streamlines freight movements between two dominant ports – Auckland and Tauranga.

Ports of Auckland’s hub has welcomed its first major tenant, Open Country Dairy (OCD), which says the it will enable it to continue its export growth while lowering costs and environmental footprint through greater use of rail.

Joel Buckingham, Ports of Auckland’s property manager, says OCD’s commitment sends a clear message that the Waikato hub is set to shake up the supply chain market.

“The port is right behind regional and national economic growth with existing freight hubs in Wiri, Mount Maunganui and Longburn. The Waikato facility – the port’s largest inland hub – bolsters that even further.”

The freight network created by Ports of Auckland aims to lower freight costs, reduce emissions and offer a wider range of freight movement services to North Island exporters/importers.

Once the facility is fully operational, the port expects to provide around 400,000 twenty-foot equivalent units (TEU) capacity per annum for exporters.

Buckingham says the port has a development team for customised design-build premises for future tenant businesses.

“We’ve created a customised 7,000-square metre high-stud warehouse, loading area and pallet store for OCD, we’re working on a number of similarly-scaled projects and expect to be designing many more market-leading and future-proofed buildings for other established operators.”

Jordan Metcalfe, commercial and industrial broker for Bayleys Waikato, says inland ports could redefine Hamilton as the go-to location for industrial players.

“We’re fielding enquiry from two distinct groups of tenants as the Ports of Auckland freight hub comes on-stream.

“Firstly, those looking to move away from the more established industrial areas of Hamilton for lower rental rates, greater scale, quicker and easier access to the wider ‘golden triangle’ and a more industrial-focused environment.

“Secondly, those looking to benefit directly from the port itself through freight and supply chain efficiencies.”

Elsewhere in the Waikato, progress on Tainui Group Holdings’ (TGH) $3.3 billion Ruakura inland port and logistics hub seems to have slowed. Ruakura is expected to eventually offer 10 percent of New Zealand’s industrial space.

It appears further progress hinges on completion of the Waikato Expressway interchange and other roading initiatives, and finalisation of plans for a major new rail siding for KiwiRail.

Last year, Ruakura general manager Blair Morris said the hub would help transform the North Island supply chain. Compared with Auckland, Ruakura’s lower land and labour costs and less congested roading would provide valuable efficiencies for import/export businesses.

Enquiry about sites at Ruakura is understood to have come chiefly from major warehousing and distribution businesses looking to relocate outside Auckland and to include players in construction, food and beverage processing, retailing and the primary sector.

Port of Tauranga is behind MetroPort Auckland, the country’s first inland port in Onehunga, South Auckland and MetroPort Christchurch, an intermodal freight hub in Rolleston. It opened its Rolleston MetroPort site in 2015, within the Izone industrial park.

Lyttelton Port of Christchurch (LPC) opened its MidlandPort in the IPort Business Park at Rolleston in 2016, offering direct rail access for container freight to Lyttelton Port’s waterside operation.

Carter Group are the developers behind IPort, which occupies 95 hectares of industrial land, 30 hectares of which has an open boundary to LPC’s MidlandPort.

IPort Business Park director Tim Carter last year said LPC purchased 27 hectares of the original 122-hectare industrial site for its Rolleston-based port operations.

The land parcels IPort is selling beside the MidlandPort operations offer huge scope for forward-thinking industrial owner-operators.

Carter stressed that as Rolleston is on main roading connections and benefits from two rail lines, it’s a compelling development location. The planned southern arterial motorway will halve the travel time to Christchurch’s CBD to 15 minutes.

Nick O’Styke, commercial and industrial broker for Bayleys Canterbury, says potential container cost savings is one upside for businesses locating to inland port precincts at Rolleston.

“Storage and manufacturing businesses seeking to mitigate overheads are drawn to Rolleston as, along with savings on container costs, the ongoing rates are much lower than those for Christchurch.”

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