Kaikoura Update

Our transport correspondent has another update.

Two weeks after, and all of the tourists have gone.

The echoes of laughing and spending tourists are all that remains as the residents sit and ponder what a calamitous change has struck their lives. The once busy harbour is now full of rock, thrust up from under the sea, leaving the whale boat fleet high and dry.

We deliver to the Mitre 10 store in Kaikoura. Or we did.

It is now a wreck. The wonderful people who we dealt with, doing deliveries at all sorts of inconvenient (for them) hours, are now faced with their lives crashed under orange painted collapsed walls. A rebuild is needed, and when it is done much of their tourist business will not be there. Their immediate future will at least be busy, as they will not be the only ones rebuilding, and hopefully they can rebuild themselves in time to benefit from supplying all of the others around them.

Communities like Mt Lyford may not be so lucky. They were always a remote and small settlement, and only time will tell whether their lack of size is sufficient to sustain the energy needed to rebuild their tiny town.

I am enjoying the wide variety of views from the new experts in freight and logistics. There are many suggestions as to how and where SH1 should be rebuilt, or whether it should be rebuilt at all. The important thing for me is to realise that politics should have no place here. This is not the emotional surge of repairing thousands of individuals houses, and dealing with the considerable loss of life that occurred in Christchurch. This event is way bigger, and as infrastructure damage is becoming more evident in Wellington, the task is growing, as inevitably it would.  

Freight transport is extremely competitive, and it is safe to assume that the costs people were incurring had been reduced to their most efficient possible over time. Ferry routes and road routes had been optimised over time, and freight volumes were located where they achieved the best result. The damage is a reminder of how fragile our freight network is, and how dependant we are on the smooth and efficient flow of goods.

Suggestions for wildly different methods may well have some validity, but they will all come at a cost.

New Zealand has only one city of population density, and it is logical that freight movement is driven by the consumption of that people mass. That is why more stuff goes into Auckland than elsewhere. It simply is cheaper to do it that way. People in Christchurch have long hated Auckland for that, but it is simply a face feeding fact.

The obvious calls for containers of goods to be shipped directly to Lyttelton (which is operating normally) are expected. They are logical. They are also logistically more expensive for the consumers in the South Island.

Think of a container, imported into NZ with 100 widgets in it. In broad terms 60% of those widgets will be consumed in Auckland, 20% in the greater Wellington area and 20% in the whole of the South Island. The supplier orders a run of 100, and has them packed into a container somewhere and pays for the run based on 100, and pays for the shipping of 1 container to Auckland. It is received, once, into NZ, unpacked and distributed through the country. The items are mixed with others going to the South Island to make their small size more economical and they are delivered, generally through Christchurch as it is the largest population mass in the South Island. This method has been used as it has been honed down into the most efficient and costs effective method

A logical suggestion is to ship those goods directly into Lyttelton. Logistically that is no problem. Financially it doesn’t work as well. Instead of buying one lot of 100 units our supplier now buys two lots, one of 80 and one of twenty. There are now two runs, both smaller, and so the price is a little higher. The run is now packed into two containers, one for Auckland and one for Lyttelton. There are two containers to be delivered to the Port, two containers to ship to NZ and two containers to unpack in NZ. Double the cost. Clearly that won’t work so the smaller shipment is delayed until it can equal a full container, so the delivery period is extended. More cost, less frequent supply. When the container arrives at Lyttelton it is now 100 widgets, with a demand for 20. Therefore 80 need to be stored in a warehouse somewhere. More cost. The product may have a use by date which might mean discarding stock before it is used, or it may be superseded by a newer model. The Auckland stock will be fresh because it has been used and replaced, while the South Island stock has to sit four times as long or be discounted. That discount will be built into the price, and is another cost.

The message from this is that costs are going to increase because of the transport network failure.

It is also a reminder of how fragile our network is. When it is working normally nobody pays it any attention because they simply forget about the infrastructure that exists to provide the milk at the dairy, or the bottle of gas at the service station. When the network breaks everyone suddenly becomes an expert at doing the stuff we’ve been doing for years and years.

Another hugely important point is how flexible road transport is when there is a catastrophe like this. Road transport continued operating immediately after the earthquake, albeit at a reduced capacity. This is simply because where there are roads trucks can adapt quickly. They are less dependent on significant pieces of infrastructure, which, because of their size, are more prone to damage. Our wharves are almost all built on reclaimed land and are generally large slabs of concrete which are vulnerable in an earthquake. Ships can sail, but they need somewhere to berth. Rail is very vulnerable as the threads of steel ribbon are now almost one joined piece and one significant upheaval stresses and stretches all of the rest. That, and of course trains need rails to run on, and without them can’t go anywhere else.

We are working hard to fully resume our services, and apart from some inevitable delays, we are providing full services to everywhere, except Kaikoura.

There is one hell of a job ahead of the teams rebuilding SH1. There won’t be time for Christmas for those good folk.


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