Show me the money tree

As I look this week at another bunch of speed limit cuts around the country, I have to say, show me the money tree.

Anyone who thinks we should be slowing down the economy in the middle of a global pandemic that is putting companies out of business and workers out of jobs like never before, clearly has access to a money tree in the garden.

Driven by the ideological imperative of taking cars and trucks off the road to make way for cyclists and pedestrians, seldom does this decision-making consider economic impacts.

Commercial road users, who pay for their road use, feel the pain of reduced speeds on their bottom line. Time costs money. Slowing down freight on New Zealand roads costs everyone. And that’s in peace time. Now we face COVID-19 time when to survive, New Zealand is going to have to be able to move exports and imports as quickly and cost effectively as possible. That will be by road – 93% of the total tonnes of freight moved in New Zealand goes by road.

The Government continues to lower speed limits around the country in a piecemeal fashion, with no consideration of the big picture for those who move freight from one end of New Zealand to the other. Modelling showing a minute lost here and a minute lost there does not match the reality of extra hours on the road when you are criss-crossing regions with wildly varying speed limits.

We appreciate that in some cases, lowering speed limits might well have an impact in reducing the road toll. But time and time again, in our submissions and meetings with those who have already decided to lower the speed limits before they go out for consultation, we hit a brick wall when we talk about driver behaviour being the cause of death and injury on the roads. That’s drugs, alcohol, distraction and ability. A lot of government research focuses not on the cause of the accident, but why there was an impact severe enough to result in death. If you look at it that way, the law of physics suggests any speed of a moving vehicle will be a problem.

The sole focus on speed limits will do more harm than good.

I discovered this week we are not a lone voice. Northland Age editor Peter Jackson penned a well-written piece about speed limit reductions in Northland. He said:

“If the Government really wants to make back roads safer it will have to seal them, widen them, and get rid of more corners than anyone can begin to count.

“That’s not going to happen, but reducing speed limits is not a reasonable alternative. Rather it is yet another exercise in wasting money for no benefit. Worse, it could have the opposite effect to that intended.”

Quite rightly, Mr Jackson points out that rates will be diverted to: “be wasted on a forest of speed limit signs that most will ignore”.

He goes on to suggest: “What Parliament needs is a special Common Sense Unit, whose role will be to weed out the dumb ideas before they start costing money on projects that won’t work.”

You can read the editorial Are speed limits the answer? here. We concur with Mr Jackson.

– Nick Leggett, CEO, Road Transport Forum

Death and taxes

We’ve all learned a lot from the Covid-19 experience so far. No matter how resilient a business thought they were, months of no work, or severely reduced business, hits the bottom line and for those who can stay operating, costs have to be cut. We can see that in the number of people being laid off work every day.

Road freight transport has played a critical role in keeping New Zealand moving through the various stages of lockdown. Trucking will be equally important through the economic recovery as New Zealand will be heavily reliant on export goods making their way to markets around the world.

Trucking operators have adapted through the various restrictions imposed by Government and have done their best to keep some kind of business going and people employed.

Economic recovery is a long way off. While the trucking industry continues to respond quickly and well to the challenges presented by Covid-19, everyone has taken hits during New Zealand’s lockdown, and the hits keep coming.

Like all businesses, trucking companies want to get back to full operations as soon as possible, recover their losses as quickly as they can, and keep good people employed.

The challenge ahead for trucking operators that already work with tight margins will be the ability to absorb, or pass on, increasing costs when all businesses are tightening their belts.

This is why the RTF is asking the Government to again consider the increase to Road User Charges (RUC) of 5.3% on 1 July 2020. Back in April the Government said no to our first request to stop this increase, but the business environment is now even worse.

I am aware that trucking companies with customer agreements that allow them to negotiate increases on Government imposed charges are finding, in spite of contractual obligations, those customers are saying no to adding the RUC increase into costs.

If trucking companies cannot pass on this cost, they will have to absorb it. For some that will impossible in this environment.

New Zealanders are struggling to make ends meet, and businesses are trying to get back on their feet in the worst economic conditions most of us have seen in our lifetimes. No one can sustain increased costs. Yet if this tax goes ahead, trucking companies that want to survive will have to pass the cost on and the cost of living for all New Zealanders will increase.

Pretty much everything travels on the back of a truck, so it is a cost on the final price of all goods.

Benjamin Franklin said, in 1789, “in this world nothing can be said to be certain, except death and taxes”. While the RTF appreciates the value of tax to keep our road network operating, in this Government’s own words, these are “unprecedented” times. Surely that means, in 2020, rules can be changed to accommodate what is looking like a very grim landscape.

– Nick Leggett, CEO, Road Transport Forum

Infrastructure announcements will not save New Zealand’s economy

The penny is starting to drop that New Zealand is in a precarious economic position we may not recover from for decades. There’s a big difference between saying building infrastructure will contribute to New Zealand’s economic recovery from Covid-19, and the reality of the gap between announcement and creation of paying jobs.

I’ve been quite vocal about my concerns around Transmission Gully. If the Government can’t even complete the one big roading infrastructure project on the books, how can we have confidence they can get others running and completed?

Many share my concerns and this week, New Zealand’s largest construction company Fletcher Building announced it would be slashing about 1000 jobs in New Zealand as it moves to reduce staffing by 10 percent.

It has been reported that Fletcher Building had more than 400 operating sites closed during New Zealand’s level 4 lockdown. It said it recorded zero revenue in most of its New Zealand operations during the lockdown. In Australia however, where there has not been a total lockdown, revenue ran at about 90 percent of its prior expectations.

Our biggest construction company doesn’t have much confidence in the road ahead and the expected market downturn means it has to reduce its workforce, losing valuable skilled workers. They are not alone. We are seeing 1000 people a day join the unemployment queue. The cost to this country will only play out over time, but we can expect our young people won’t want to stick around and pay the bills being racked up now and we will be looking at another brain-drain.

The Government has tagged about $15 billion for infrastructure, but announcements do not jobs make. There’s a big gap between something being deemed “shovel ready” and well, the shovels actually going into the ground with workers attached to them.

Even the Amalgamated Workers Union national secretary Maurice Davis is calling for a faster start on infrastructure projects to offset job losses in the construction sector. He suggests the Government look at fast-tracking projects they deferred when they came to power.

In a last-ditch attempt to get some business nous into the economic recovery the Prime Minister’s Business Council has told her that Australia is “co-optimising” the economic consequences of the Covid-19 outbreak better than New Zealand. Chair Fraser Whineray sent a blunt letter holding up Australian Prime Minister Scott Morrison’s high-powered National Covid-19 Coordination Commission as exemplary.

The voice of business is not so well heard here in New Zealand. You can see that in suggestions for a four-day working week and an extra public holiday. These are further costs already crippled businesses simply won’t be able to bear. They’ve only just got back to work in many instances and now the Government wants them to pay for more days off. This also shows the Government’s complete lack of understanding of the fact that many businesses operate seven days and/or are coordinating with parts of their businesses in other time zones. The five-day, 9am-5pm work week is no longer reality for many.

You can see the disregard for business in the policy – written by people with no business experience – and in Wellington where we now wander in a ghost town. Public servants are staying home instead of coming into the city to work and contributing to the retail and hospitality businesses that have conveniently been there for them for years.

If the Government really cared about jobs, jobs, jobs, they would get their own workers back into Wellington’s offices spending their considerable salaries.

The trouble we are in will not be cured with kindness. It won’t be fixed by well-meaning workshops. The meaningless daily press conferences and the hiding behind Covid-19 needs to stop. As Mr Whineray put it in his letter:

“To avoid the endemic problem with the public sector’s misallocation of New Zealanders’ resources held by the Government in non-core activity and low productivity within the public sector we need a very strong business in involvement alongside central Government.”

– Nick Leggett, CEO, Road Transport Forum

Mapping the road out of Level 4 lockdown

How interesting that three of the most vilified groups in New Zealand pre-Covid-19 – farmers, truck drivers and immigrants – are now the ones holding the country’s economy together.

This week, I met with Transport Minister Phil Twyford and his officials from the Ministry of Transport and I spoke before Parliament’s Epidemic Response Committee. The messaging was the same – please recognise the vital work trucking operators and truck drivers are doing; please let the freight chain work as it should without the arbitrary terms of essential and non-essential freight; and how do we get our businesses out of this in one piece – what does life beyond the Level 4 lockdown look like?

I’d like to recognise the truck drivers who are transporting essential goods by road during this Level 4 lockdown. They are doing jobs they love, but they are more isolated than usual, from their whanau and colleagues. Our economy and well-being are tethered to trucking. My view is that these workers and transport operators have not perhaps had the recognition and thanks they deserve.

Our industry has yet again stepped up to meet need –  these are the people who are keeping supermarket shelves stocked, and medicine and equipment going into hospitals and pharmacies. They respond to need in just minutes and they get goods where they need to go.

I have been speaking to many trucking operators since the lockdown began and a lot of them are operating at a loss, because of the arbitrary labelling of freight as essential and non-essential.

Obviously, the longer this goes on, the more businesses will fail and the more people will be unemployed.

It’s imperative that transition options be developed before the lockdown ends so that businesses are able to prepare and can position themselves to be as productive as possible on day one. We have urged the Government to share the scenarios they are working on to move the country out of the Level 4 lockdown. We have offered to work with them to ensure our vital industry can do its bit to rebuild the economy, and retain jobs, as fast as possible. We are two weeks into a four week lockdown and we need serious strategy and planning now, to emerge successfully on 24 April.

We need that information as early as possible to allow for the least painful transition – to keep people employed, and to keep the economy moving on the back of a truck.

Interestingly, we are not alone. Internationally, those representing road freight during this global pandemic are finding the same issues and asking for the same solutions.

IRU (the world’s road transport organisation based in Geneva) and the International Transport Workers’ Federation have issued a joint statement calling for support from governments and international bodies to ensure international supply and mobility chains remain connected during the Covid-19 pandemic.

The statement sets out the road transport industry’s key demands and calls for immediate action to recognise the important contributions to society made by road transport workers and companies, and industry’s vital role in responding to, and overcoming, the current coronavirus crisis. There is definite cross-over with what we are asking for and what they are asking for. You can read the statement here.

I will finish with the words of IRU Secretary General, Umberto de Pretto: “The Covid-19 pandemic has turned the spotlight on road transport – showing once more the indispensable role road transport companies and their workers play in the movement of essential goods. Support for the continuity and resilience of supply and mobility chains, and the designation of road transport as a key service must be prioritised by governments and international bodies to aid the response and recovery from this crisis.”

– Nick Leggett, CEO, Road Transport Forum

Communicate clearly as the world changes daily

As we wake up each day to more changes to our world, communication is critical for businesses dealing with the global spread of COVID-19.

I know many businesses are facing pressure and business as usual is unlikely for some time. We are in a rapidly changing and unprecedented business environment when it comes to the COVID-19 pandemic.

For this reason it is essential that you are communicating with staff, suppliers and customers.

You need to assure all those you are in contact with that you are doing everything possible to prevent community spread of COVID-19.

Keep communication clear, factual and regular – daily if necessary. Be mindful of language as for many people, this is a very serious situation and people are feeling stressed and pressured.

RTF has heard of some primary food processing companies putting in measures to protect the integrity of their production line, including mandating that truck drivers sign a “declaration” each time they enter the premises to say they have not travelled overseas in the past two weeks.

Unfortunately, this is being done company-by-company, rather than in a co-ordinated way. So we are not sure what the basis of this decision-making is. There are currently no market access requirements, or requirements from the New Zealand Government for this type of measure.

But we also understand your customers may start implementing the measures they think are necessary to assure their customers that they are doing everything possible to prevent spread of COVID-19.

Please let the RTF know if there are any such changes to your supply chain, or any specific business issues you are having as a result of COVID-19.

All trucking companies should by now have a plan to manage their businesses through the COVID-19 pandemic. It needs to be a flexible plan, as we are seeing daily changes to operations worldwide, particularly when it comes to the supply chain.

RTF has set up a webpage dedicated to providing information to the trucking industry throughout the COVID-19 pandemic. You can access it via our main page www.rtf.co.nz or directly here.

We are issuing regular circulars and fact sheets to advise businesses on the New Zealand response to coronavirus and these are available on the website.

It is important to use the accurate and verified information from the New Zealand Government as it applies to the New Zealand situation with COVID-19, not rely on information in the media or on social media. In particular, the Ministry of Health should be the source of all health related information and advice.

There are some measures specific to our industry that businesses should familiarise themselves with, including driver hygiene on the road and truck cleaning. There are no New Zealand guidelines on truck cleaning in a pandemic, but we have put on our website the very sound influenza pandemic advice from the Centers for Disease Control and Prevention (CDC). This advice includes exposure risks for freight transport personnel; guidance on preparing workplaces for a flu pandemic; personal protective equipment; and truck cleaning.

Road freight transport is critical to maintaining continuity of vital operations in New Zealand at this time. RTF is working with the relevant authorities to ensure the vital links road freight transport provides remain effective.

You, our trucking community, are carrying the economy on the back of your trucks and we are here to ensure you can continue to do so.

– Nick Leggett, CEO, Road Transport Forum

Keep calm and carry on

It’s hard to know which is worse, the global spread of Covid-19, or coronavirus, or the panic and constant media barrage about it.

The RTF felt a bit like the canary in the coal mine when we wrote to the Government on 4 February and alerted them to the fact that businesses were already in trouble as a result of the virus in China, and we expected the situation to get worse. (Still haven’t had a reply to that, or a subsequent letter!)

Trucking is an early economic barometer. As soon as there is a squeeze in the global supply chain, trucking companies feel it. If goods aren’t coming into the country, or going out of the country, then there is no work for the trucks that normally move those goods.

Unfortunately, it took a month before anyone outside the trucking and forestry industries realised what we were saying was true. Once the first New Zealand Covid-19 case was confirmed last Friday, the Government kicked into gear.

Businesses may be feeling overwhelmed by the volume of information, mis-information, media, and public discussion about Covid-19. I have heard from the trucking industry that there are business continuity issues as work volumes decline, and some sectors have been hit worse than others. Please keep telling me about the effects on your businesses so we can advocate on your behalf.

New Zealand is being swept up in a global storm and much of what is happening is beyond our control. The good news is, we have really good government officials in the trade space who are working 24-7 to ensure our trade pathways operate at some level, if not at full capacity, so goods can come into and leave New Zealand.

I’ve said it before, but he continues to perform like a star, Ministry of Health director-general of health Dr Ashley Bloomfield is the trusted health official whose advice you should follow. Social media appears to have millions of “health experts” globally, but Dr Bloomfield is the voice of science, facts and reason.

The New Zealand Government remains the best and most accurate source of information for the situation here, both health and business wise. The Road Transport Forum is gathering the most up-to-date information we can to keep the industry informed and we have set up a dedicated Covid-19 webpage.

If the situation gets to pandemic and crisis-level, the RTF has plans in place to communicate directly with freight operators.

Trucks are a vital lifeline in a crisis – as we have seen with the Canterbury and Kaikoura earthquakes – and truck operators may be called on to move essential supplies and deal with the aftermath of a pandemic. We will be talking to the government about that.

If your business is struggling to keep staff, or you have to lay off staff, let the RTF know. There are other compatible industries that may be struggling to get staff so there could be some opportunities. The Government is talking about no stand-down period for the jobseeker benefit for those unemployed as a result of Covid-19. We hope they will confirm that next week.

The RTF is best-placed to work with government and to source accurate information, which we can also distribute through our associations to the industry.

While these are certainly worrying times, it is important to keep perspective. The first priority for businesses must be the health and welfare of their staff. There is detailed advice about that on our website.

Plan for the worst, with a crisis management plan, but hope for the best.

Until the director-general of health tells us otherwise, life should be going on as normal. Looking at the panic buying in supermarkets, there should be plenty of work for those trucks. We just don’t want to create the panic that came from the truck carrying toilet paper in Australia rolling and catching fire!

– Nick Leggett, CEO, Road Transport Forum