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Comprising over 100 ha of masterplanned development land, The Landing at Auckland Airport is home to a number of the world’s largest 3PL and logistics companies, including Hellmann World Wide Logistics, Toll, DHL, Fonterra, Coca Cola Amatil, Fuji Xerox and Agility Logistics

There’s the hub – By Nigel Parry

A lively panel discussion on distribution hubs was a highlight of the recent Freight Futures 2030 conference in Auckland. Nigel Parry was there to report for FTD.

The session kicked off with a quick round-up of some international examples of multi-modal freight hubs. And while the huge scale of the latest sites in Chicago (USA), Winnipeg (Canada) and Moorebank (Australia) are not something we could contemplate in little old New Zealand, the way they work and the benefits they bring certainly are, even at our more modest scale, according to presenter Blair Morris, general manager of Ruakura at developer Tainui Group Holdings.

The main features of the examples given are being next to main road and rail transport (often at a major junction), on greenfield sites away from space-constrained ports, and able to provide more open access to transport links and multiple ports for import/export. “They have universal co-location, warehouse and factory space, and multi-port access,” said Mr Morris. It’s a commercial eco-system and a way of approaching distribution that can also reduce emissions.

Why logistics hubs work

The panel discussed why hubs would work in New Zealand (Ruakura isn’t the only option). Murray King, longstanding industry operator and consultant, said vehicle efficiency would improve, and it reduces queueing at ports. 

David Brinsley, national manager IMEX (import/export) at KiwiRail, pointed out that, like KiwiRail, hubs can offer port neutrality. “Like Switzerland,” he said.

Panel members (L–R) Allyson Wood, senior lecturer, Manukau Institute of Technology; David Brinsley, IMEX manager, KiwiRail; Blair Morris, general manager Ruakura, Tainui Group Holdings; and Murray King, transport consultant – Photo by Nigel Parry

Congestion is also an issue, and due to get much worse in Auckland, according to Allyson Wood, logistics professional development expert at the Manukau Institute of Technology. In fact, congestion around ports, and their impact on the local community, was also mentioned by Blair Morris. Keeping those impacts in check, something that inland distribution hubs would do, helps with what he called ports’ public ‘licence to operate’.

Changing the face of transport

Several panel members spoke about distribution hubs potentially changing the face of transport by allowing a redesign of transport networks – something that would deliver cost reduction (the team at Ruakura are suggesting between 19% and 38%, depending on what you are doing and which part of the country you serve). It would also play well with reducing the carbon footprint of operations, a subject being brought into public spotlight.

That might include replacing line-haul road transport with rail to connect ports and more distant locations, and shorter journeys by road. “As vessels get bigger, and there are fewer port calls, there are benefits of hub and spoke. You get a better bang for your buck and spend fewer of them,” said Mr Brinsley.

It might also play into the hands of the nascent electric freight vehicle, as their limited range and shorter time between ‘refuelling’ (charging) are more suited to local and regional distribution. “We have to think of different ways of doing things,” said Allyson Wood. “Overseas, that has happened. Large regional distribution centres feed down to local ones, with cross-docking, and there’s a lot of automation appearing.”

“Technology and automation are great, but you’ve got to have scale,” Mr Morris commented. Things are moving that way though. “Labour costs are high and continuing to escalate, while the cost of automation is coming down,” he added.

Ports and sea freight

Murray King pointed to the “significant fuel advantage” of rail and electrification, with a nod to the government’s zero carbon targets for the country. Part of that redesign includes how we use ports for both import and export, and the panel generally agreed that things are changing.

There are too many ports handling containers for a small country, but locally-owned ports make it politically difficult to make changes. “No port wants to be on a list for euthanasia,” was one comment. However, some developments are already taking place, with Nelson dropping off the international port call radar. “You look at the future – you might have a super hub port and a proper coastal network,” added Blair Morris.

Resilience, particularly with port operations following major disasters, was also tabled. David Brinsley said a healthy coastal service was needed to mitigate this, and that is still offered by KiwiRail, even after reopening the Kaikoura quake-affected rail links. What that event did, though, was force a rethink. “We don’t run the same services and cargo now,” he commented.

The future landscape

The panel’s consensus was that there is a happy medium between keeping options open and over­investment in too many ports. Import/export still goes through ports, in busy towns and cities. A move to hubs, and investment in linking them so freight can move without competing for the same space as commuters, is a way forward.

However, Murray King warned that creeping local development around hubs could spoil their free-flowing operations, giving the example of the Palmerston North rail line that was relocated out of the city, and might be moving again. 

Overall, I was left with the feeling that experts believe distribution hubs will form an increasingly important part of our logistics landscape – more consolidation, more hubs, more rail, and significantly changing distribution patterns.

What’s happening at Ruakura?

Under development by Tainui Group Holdings, Ruakura is a long-term development comprising a 480 ha logistics and lifestyle hub – the largest in New Zealand. Located just east of the Hamilton city centre, Ruakura lies at the heart of the North Island’s ‘golden triangle’ for freight, with major rail and road connections to both Auckland and Tauranga ports.

Resource consents for the first stage of the logistics precinct were issued in 2016, and construction of stage one of the inland port got underway in 2017. 

Tainui Group Holdings CEO Chris Joblin on the site of the Ruakura inland port – construction of water and wastewater infrastructure is now underway

Tainui Group Holdings CEO Chris Joblin says they have made solid progress on enabling works over the past year. “Work to date has included pre-loading the first 6 ha of the inland port, which is now complete, and construction of water and wastewater infrastructure is now underway. A lot of work has also gone into planning the rail siding and the local roads network.”

Construction of the Hamilton section of the Waikato Expressway, which borders the Ruakura site, is well underway. Tainui Group Holdings is now targeting for stage one of the inland port to open in the first half of 2021 to align with the completion of local roads and the expressway, which the NZ Transport Agency expects to be around December 2021.

“With our JV partner LINX Cargo Care, we’re building a strong network of supply chain partners and customers. We’re deeply engaged with the likes of KiwiRail, the ports and freight owners to create a seamless long-term solution,” Mr Joblin says.

“All the deep market trends continue to support Ruakura. There is a greater push on than ever before to have same day/overnight delivery across the North Island, and this is much easier to achieve out of Hamilton than Auckland.”

As a new site, the developers are also keeping in touch with latest environmental trends and standards. This includes rain­water collection, solar generation, micro-grid distribution and how occupants could use electric commercial vehicles and what that might mean for infrastructure to charge them.

Award-winning journalist Nigel Parry started writing for FTD over ten years ago, and has been covering logistics and supply chain issues in a number of countries for more than two decades; he can be contacted at nigel.parry@gmail.com

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