By Paul McBeth
Ports of Auckland, facing protracted industrial action, stands to miss out on up to $100,000 a week in revenue once Fonterra Cooperative Group quits using the hub.
Port chief executive Tony Gibson blamed the Maritime Union of New Zealand (MUNZ) for Fonterra’s decision to re-route $27 million worth of weekly exports through Tauranga and Napier hubs instead of Auckland.
Spokesperson Dee Radrakrishnan told BusinessDesk it’s unclear as to how much the decision will cost the port, though it will miss out on as much as $100,000 a week, depending on trade volumes, once Fonterra leaves.
The dairy exporter’s exit comes a month after Maersk, the biggest shipper visiting New Zealand, switched its services to Port of Tauranga.
“With MUNZ threatening further strike action, it is inevitable that customers will look for alternatives and contingencies,” Gibson said in a statement. “Coupled with the departure of Maersk’s Southern Star service to Port of Tauranga, the loss of Fonterra’s business means that action is needed urgently.”
The union and the port have been at loggerheads over their employment contract, precipitating a strike and a lock-out last month – typically a peak period in the run-up to Christmas.
The departure of one of Maersk’s services is expected to cost the port $20 million in annual revenue, which amounts to about 11 percent of the $177 million Ports of Auckland made in sales in the year ended June 30.
Fonterra will cease using the Auckland hub from the end of the month until further notice.
The dairy exporter whittled down the number of ports it uses since 2009, and last year set up a freight alliance with meat processor Silver Fern Farms to build a bigger bargaining chip with international shipping lines.
Gibson said the port has made a final offer to the union, including a 10 percent rise on hourly rates and performance bonuses of up to 20 percent on hourly rates, plus the retention of existing benefits and entitlements. Workers will be expected to accept a new roster system in return.
“In the best interest of customers, staff and the port’s future, some constructive progress is needed from the union, and needed now,” Gibson said.
(BusinessDesk)
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[A number of updates have been made to this story. The earlier version is below.]
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Fonterra Cooperative Group, the world’s biggest dairy exporter, has quit using Ports of Auckland due to the threat of ongoing strike action.
Port chief executive Tony Gibson blamed the Maritime Union of New Zealand (MUNZ) for Fonterra’s decision to re-route $27 million worth of weekly exports through Tauranga and Napier hubs instead of Auckland. The dairy exporter’s exit comes a month after Maersk, the biggest shipper visiting New Zealand, switched one of its services to Port of Tauranga.
“With MUNZ threatening further strike action, it is inevitable that customers will look for alternatives and contingencies,” Gibson said in a statement. “Coupled with the departure of Maersk’s Southern Star service to Port of Tauranga, the loss of Fonterra’s business means that action is needed urgently.”
The union and the port have been at loggerheads over their employment contract, precipitating a strike and a lock-out last month – typically a peak period in the run-up to Christmas. Maersk’s departure is expected to cost the port $20 million in annual revenue, which amounts to about 11 percent of the $177 million Ports of Auckland made in sales in the year ended June 30.
Fonterra will cease using the Auckland hub from the end of the month until further notice.
The dairy exporter whittled down the number of ports it uses since 2009, and last year set up a freight alliance with meat processor Silver Fern Farms to build a bigger bargaining chip with international shipping lines.
Gibson said the port has made a final offer to the union, including a 10 percent rise on hourly rates and performance bonuses of up to 20 percent on hourly rates, plus the retention of existing benefits and entitlements. Workers will be expected to accept a new roster system in return.
“In the best interest of customers, staff and the port’s future, some constructive progress is needed from the union, and needed now,” Gibson said.
(BusinessDesk)
17 Comments
Why does the NZ press never seem to actually report anything useful about industrial disputes? Why do we not have details of current pay scales and what people actually really earn?
The figures of $13 an hour and $91,000 a year have been loosely bandied about. Even to someone not particularly good at mathematics that seems inconsistent.
This is a real issue that affects all New Zealanders. I don't have any special knowledge of this issue so all I know is from the media.
Let us have some facts so we can make our own minds up.
and this, in many ways, comes back to housing. If housing was as affordable as it SHOULD be in Auckland, there would be less pressure for pay rises such as this.
Cost of living, in particular housing, is a MAJOR factor in the business competiveness of a city such as Auckland
Yet the pollies and policy wonks continue to twiddle their fingers, in the face of ALL the evidence
And with house prices edging higher, and rents going up, and wages stagnant - whither Auckland's competiveness?
then think of necessary professions such as teachers, nurses etc. Surely the regions, where they can earn pretty much the same dollars, and the cost of living is much cheaper, will become ever more appealing
http://www.homesell.co.nz/new_zealand_real_estate/9521.php
This looks nice and affordable to me.
Lots of affordable houses in Auckland.
Re-post: This type of thing is just another example of the lack of competivness in our major city. Almost all costs are higher - wages, land & buildings plus real issues with transport and utilities bottle necks. What a fricken mess!
Watch out the rest of NZ; with the largest voting block you will be forced to subsidise this ongoing disaster.
Hawkes Bay has a great week: " Port of Tauranga and Port of Napier will share the load, picking up Fonterra's $27 million weekly trading, from the end of January until further notice."
More work & profits for Napier - and then more jobs and business from Heinz "US food giant Heinz Wattie has sacked 146 Australian workers at its tomato sauce factory in northern Victoria and is bringing production back to the original Wattie's home in Hastings."
So much cheaper & efficient to do business in a thriving provincial centre than mad cities like Auckland or Melbourne.
Port workers in Naier are not under-paid. Then the surrounding infrastructure employees in IT, finance & office are paid ok as well.
Production workers at Heinz Watties are paid well, as well as employees in IT, office, logisitics, food science etc...
They then spend their $$$ in the local economy - it's a win-win situation for Hawkes Bay.....
Keep up your protesting & striking in Auckland!
shits about to hit the fan ..
Port proceeds with contracting out proposal
Ports of Auckland has advised the Maritime Union of New Zealand – Local 13 (MUNZ) that it does not find the counter-offer tabled on 6 January attractive, and that while it will continue with collective bargaining, it is proceeding with a proposal to contract out its labour force.
Ports of Auckland CEO, Tony Gibson said the union’s counter-offer failed to deliver the rapid improvements needed in work practices and productivity.
The loss of the Maersk and Fonterra business meant that the situation had changed dramatically over the last few weeks, he said.
“I welcome the opportunity to discuss these matters further with MUNZ when mediation resumes on Thursday. However, we’ve run out of time. Without rapid changes towards substantially more efficient labour practices, more customers and more jobs will be lost in the coming weeks.
“We’ve worked now for 11 months to achieve the changes needed, but the Union does not appear to be taking the issues seriously,” he said.
Gibson says the Port’s last offer remains its best and final offer. It includes a generous 10 per cent rise on hourly rates, performance bonuses of up to 20% on hourly rates, and the retention of existing benefits and entitlements in return for a new roster system that will provide increased operational flexibility while allowing workers to plan their rosters a month in advance.
As it signalled before Christmas, in parallel with the collective bargaining process, the Port is progressing plans for redundancies as a result of the loss of the Maersk and Fonterra business, and will begin a consultation process this week over a proposal to contract out its labour force.
It is holding a series of briefing meetings with staff this week to advise them of the process.
Mr Gibson said that if the proposed contract labour model was to proceed, he expected that the majority of affected employees would continue to work for the Port as employees of the selected contractors.
Meanwhile, Union workers at Ports of Auckland will begin another 48-hour strike at 11pm tonight, the fifth major disruption to Port operations since November.
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