NZ Post has held a ground-breaking ceremony for a new ‘super depot’ to be built in Wellington.
The Grenada-based facility is part of a 10-year plan to double processing capacity from 95 million parcels today to 190 million parcels.
The $170 million investment programme includes a new processing centre in Wiri, Auckland, due to open in 2023, and an upgrade to the Southern Operations Centre in Christchurch in 2022.
The state-owned enterprise has recently received $280m in government funding, including a $150m two-tranche injection from the COVID Response and Recovery Fund and $130m from Budget 2020.
NZ Post plans to invest around $18 million in the latest global technology that will sort and scan parcels at a much faster rate.
The depot will have a 10440 square metre processing floor – about the size of a rugby field – with plenty of room for processing parcels.
It will also incorporate a large solar power installation once battery technology makes this a viable option.
“We know that customers really want complete visibility of where their parcel is at all times of its journey – and this technology will improve our ability to do this,” NZ Post chief executive David Walsh says.
“We’re making this multi million dollar investment to support New Zealand businesses – both growing new businesses as well as major ecommerce giants.
“NZ Post is forecasting significant growth in the amount New Zealanders will buy online in the next decade – this was before the explosion in online shopping during the COVID-19 period,” he says.
“Last year online shopping in New Zealand grew 13% with almost 50% of adult New Zealanders now shopping online, and we are expecting this growth to continue. We’re pleased to be able to invest confidently in our future, to meet the growth in online shopping.”
Associate state-owned enterprises minister Shane Jones says the new depot “will provide NZ Post with the capacity to process parcels more quickly and efficiently”.
During the COVID lockdown period, NZ Post received over 3.5 million parcels in the first two weeks of alert level 3. It had been planning for this quantity of parcels in 2023.
“As an essential service, posties and couriers worked throughout the COVID-19 level 4 lockdown to deliver essential items to Kiwis, and they have continued to work through the resulting massive demand for e-commerce,” Jones says.
“New Zealanders will be aware of the issues that surrounded the ability of NZ Post to deal with the huge surge in parcel post during lockdown.
“This investment is good news for New Zealand businesses who are looking to grow their e-commerce presence or are already successful in this space, and for the customers who use those services,” he says.
The facility is due to open in 2022 and its construction will see around 350 jobs through main contractor Aspec Construction plus 60 sub-contractors.
Walsh says mail demand and the number of letters being sent has been falling for many years but it’s still an important service for NZ Post.
“Delivering mail is a core part of what we do, it connects so many New Zealanders and it matters to them.
“However, we can’t solve the future of mail services on our own. The Government funding will allow us to continue to provide a nationwide mail network to around 2.5 million addresses across urban and rural New Zealand at current service levels, while we work closely with Government on a longer-term solution.
“On parcels and courier services, we know that online shopping will continue to grow – even with the uncertain economic times with COVID-19. We had been planning to invest in that future with additional core infrastructure that will allow us to meet the needs of our customers and respond to more online buying and selling. We will now be able to invest and build with confidence,” he says.
NZ Post employs around 6500 people and says has lost “tens of millions of dollars of revenue” from the global pandemic.
“Like so many other New Zealanders and businesses we don’t know what the long-lasting impacts from COVID-19 will be.
“The equity injection provides NZ Post with improved financial resilience. We will continue to keep the purse strings tight as we manage our costs, expenditure and efficiencies,” Walsh says.
