Supply chain crisis

The Government has recently put the Fair Pay Agreements Bill before Parliament. When passed, Fair Pay laws will set minimum standards across whole industries for better pay, hours of work, health and safety, training, and worker input in decision making.

The purpose of the Fair Pay Agreements Bill is explained at the beginning of the Bill:

The objective is to improve labour market outcomes in New Zealand by enabling employers and employees to collectively bargain industry-wide or occupation-wide minimum employment terms.

While New Zealand’s labour market has some strengths, it also has systemic weaknesses. These include a significant prevalence of jobs with inadequate working conditions, low wages, and low labour productivity. For example, Māori, Pacific peoples, young people, and people with disabilities are over-represented in jobs where low pay, job security, health and safety, and upskilling are significant issues. Barriers to good labour market outcomes are particularly prevalent for people who fall within more than 1 of those groups. The Bill will help address these issues.

Fair Pay Agreements will enable workers and their unions to negotiate a set of core minimum conditions for a whole industry. Nobody will be able to be employed in that industry on anything less, stopping a ‘race to the bottom’. Unions will still be able to negotiate collective agreements for their members over and above these minimum standards.

Once union and employer advocates have sat down at the bargaining table and come to a proposed settlement, they will take these back to the people they represent. For unions, that means taking a proposed settlement to the whole workforce – including non-members – and taking a vote where at least a simple majority of people will be required to settle a new Fair Pay Agreement.

If negotiations break down, instead of industrial action, a process of compulsory arbitration will take place, whereby an independent person considers the claims and arguments of both union and employer advocates and makes a binding decision on a new Fair Pay Agreement.

As the bill goes through Parliament, submissions will be considered and some changes will be made. It is likely the new law will be in place before the end of 2022.

The effect on the maritime industry will vary and the Maritime Union is currently looking at how these new laws could help improve wages and conditions.

By Craig Harrison National Secretary

The ongoing shipping and supply chain crisis needs a clear plan and immediate action. We see daily reports about supply chain congestion. Covid-19 was the trigger that exposed the underlying weakness of the global supplychain. New Zealand’s overreliance on global shipping has placed us in a difficult position.

We have heard a lot about these problems. The global forces driving the situation are not going away. What New Zealand can do is adapt and modify our approach to shipping.

We’re in a transition between two approaches to the supply chain. For the past 30 plus years, the prevailing mindset was the market would provide, there was no role for planning, and there was no need for New Zealand shipping. This idea has been revealed as a bad mistake.

Where to now? Industry players admit there is a significant problem. Recent Government reports confirm what the issues are, but only discuss underwriting, not significant investment. The global outlook for supply chain performance will not improve in the short to medium term.

Ships are being delayed around the world, and when they get to New Zealand, they are already behind on their sailing schedule. New Zealand ports need to ensure that ships are serviced on time. Until the problems are resolved at the Ports of Auckland, and it returns to the throughput achieved prior to the automation project, local congestion will continue to impact on the New Zealand freight movement.

Issues around the availability of labour are certain. But there are solutions like rostering and employment security. These would reduce staff turnover and encourage workers to see a career rather than an unattractive and exhausting future of irregular hours and in some cases poor pay and conditions. Workers can no longer be seen as a cost to be reduced but as an investment in success.

Export cargo needs to be in front of the major shipping lines at major ports so there is no requirement for big ships to transit around New Zealand. A New Zealandflagged coastal shipping service would move the volumes needed around the country in a timely manner. There is now no guarantee that foreign vessels will even stop at a scheduled port.

An effective New Zealand coastal shipping service needs to be supported by New Zealand ports, and in return ensure consistent berth times and supply of port services.

Congestion is the underlying issue with ports as freight needs to move both on and off a port in a timely manner. If it is delayed or in some cases not even picked up or dropped off by shipping companies, this adds to the problem.

A coastal service utilising three to four ships and given regular berth space in ports would help smooth out supply chain congestion. Ports could also better plan when freight would be moved through the port and have confidence it would happen. Maybe the solution is a consortium of New Zealand ports and freight operators developing a joint venture, which answers the needs of all players. In a small market like New Zealand, we have the ability to move quickly and find innovative solutions.

Ports could coordinate a shipping service that meets their own needs and provide options to customers who have recently seen their options evaporating.

Port companies around the country develop off-port container storage and trucking facilities, and ports have worked with rail developing fixed daily services between Tauranga and Auckland. Some ports are involved in joint ventures such as tug operations and at times procurement ventures.

KiwiRail could be a possible partner with its shipping operation, as it has the capacity, with direction and support from the Government.

Everyone knows we have a problem, and all say coastal shipping is one of the answers, but unfortunately no clear, systemic solution has been developed. The Government needs to take the lead and facilitate discussions between ports and freight operators to get New Zealand coastal shipping back in play.

We need a national ports strategy that links in with a coastal shipping strategy, and we need to get this up and running now.

Originally published nzherald.co.nz 10 January 2022