Logistics Challenges and Opportunities at the Port of Auckland

Oakland Port, located in the San Francisco Bay Area, California, USA, is one of the important ports on the west coast of the United States. However, due to its geographical proximity to Los Angeles and Long Beach ports, it has long been in an awkward position in route configuration. Typically, ships don't call at the Port of Auckland until they visit the ports of Los Angeles or Long Beach, making it difficult for the Port of Auckland to be an independent shipping destination. Although several attempts have been made to connect directly from China to Auckland Port, they have been unsuccessful, mainly due to insufficient local cargo volume and limited inland rail transportation (IPI) cargo volume.

During the pandemic, the ports of Los Angeles and Long Beach experienced severe congestion, and some ships turned to the port of Oakland as an alternative. However, this temporary adjustment quickly led to congestion problems in the Port of Oakland itself, and some ships eventually returned to the ports of Los Angeles and Long Beach. This phenomenon further highlights the capacity constraints of the Port of Auckland when handling large volumes of cargo.

Meanwhile, the Auckland region's The FBA transshipment business faces a similar dilemma. In recent years, the FBA transshipment market in Southern California has boomed, attracting many cross-border e-commerce logistics companies to set up warehouses here. In contrast, the performance of the Auckland market is much bleaker. Although some companies try to open up the local market through cooperation in opening or dividing positions, the actual effect is not satisfactory.

In the second half of this year, Amazon successively opened new warehouses such as PSC2, ABQ2, and MIT2. The opening of these new warehouses further diverted the goods originally belonging to Auckland. According to industry insiders, the Quantity of direct delivery cabinets in Oakland market has decreased by about 70%, and the Quantity of dismantling sea cabinets has also decreased by 50%. Once busy SMF3 and SCK4 warehouses are now almost deserted, making delivery appointments incredibly easy, and even rejections have been greatly reduced. This depression is in stark contrast to the boom in Los Angeles and Seattle markets.

In this unfavorable market environment, practitioners in truck companies and transshipment warehouses have been severely affected. After the warehouse separation policy was implemented, drivers of truck companies had to take turns on vacation because they lacked enough cargo. For the warehouse, the landlord will not reduce or exempt the rent due to the reduction of business, so the warehouse can only bite its teeth and wait for the market to improve. In addition, due to the sharp decline in business and fierce price competition, the risk of warehouse thunderstorms has increased significantly, and several such incidents have occurred this year.

However, in such a harsh environment, there are still some companies that dare to go against the trend. Recently, an Oakland warehouse owner decided to move into a new warehouse of more than 100,000 square feet in October. The boss insists on doing it himself. From picking up the cabinet to Unstuffing to delivering the warehouse, he will personally deal with every problem in every link and formulate specifications to prevent similar problems from happening again. He hardly advertises and relies entirely on word-of-mouth from old clients to attract new clients. He believes that being accountable to customers is the key to successful business. On one occasion, due to the operation error of a novice forklift driver, a board of goods worth nearly $20,000 was lost. Instead of shirking his responsibility, the boss immediately apologized to the customer and put forward a rectification plan, and took the initiative to compensate the customer for all his losses. This honest and reliable attitude has earned the trust of the client and brought him more business.

In the current background of fierce market competition, honest management is particularly important. Only by providing high-quality services and establishing good customer relationships can we find a breakthrough in adversity and achieve sustainable development.