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Time to take a breath on port decisions

I fail to see why there is the perceived need to rush into moving Ports of Auckland, or the rush to pick a favourite to replace it.

So, I was pleased to see the Government release, this week, a sensible and measured report that stopped the push to develop Northport in its tracks. The promises around Northport were only ever based on New Zealand First’s desire to secure the Northland electorate seat at this year’s election.

RTF has spoken out against the move to Northport on many occasions because of the cost it would add to move freight further away from its end destination. That’s before you even get into logistics and environmental impacts.

As a country facing severe economic hardship in the wake of Covid-19, the Government cannot afford to spend money on poorly thought-out projects that don’t stack up on costs versus benefits.

The government-commissioned report prepared by Sapere Research Group – Analysis of the Upper North Island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland – endorses the folly of a rushed move to Northport. The report says that assessment of regional economic development effects suggests that, on its own, a relocation of port activity is unlikely to substantially alter regional economies. It says most of the gains would be felt in regions outside where the rise in activity takes place.

The argument that moving to Northport would benefit the Northland economy is dead in the water.

The report also endorses our point that it is clear that distance to market is critical to the supply chain and that Northport is generally considered too far from main markets to function as a primary import port. It is worth noting that 80 percent of New Zealand’s freight is distributed to points south of the current Ports of Auckland.

What’s at play here? Influential Aucklanders don’t like the look of a working port in their downtown area and, at some point, Ports of Auckland will reach capacity – though Covid-19 might extend that timeframe.

Aside from the optics, the country needs to look at how it can best manage the flow of exports and imports that are the mainstay of our economy. We cannot become so isolationist in our response to Covid-19 we forget that. We are already seeing a worrying trend with global airlines responding to the New Zealand Government’s border policies.

It seems to be a peculiar New Zealand thing to respond to big issues by quickly coming up with options A or B and force a choice, when it need not be a binary choice.

The Sapere report suggests we have a good 30 years to tackle capacity issues for Ports of Auckland. They look at the current options on the table and conclude a new port in Manukau Harbour is the number one contender in a cost-benefit analysis. This has been met with some derision due to the nature of New Zealand’s west coast tidal flows and the suitability for shipping.

Again, this reflects more on New Zealand’s decision-making capability rather than the well-researched report.

Sapere acknowledges that long lead times for planning, consenting and constructing port capacity outside Ports of Auckland mean there is a shorter window of time for a decision about the long-term strategy to future proof port capacity. That window is approximately 10-15 years.

Surely, in that time, there can be a sensible assessment of what the problem we are trying to solve is and how best to solve it, rather than trying to retro-fit a solution to meet the needs of politicians, or other vested interests.

The problem is: How we can increase port capacity, anticipating growth, for exports and imports that flow through the upper North Island supply chain?

We’re supposed to be this innovative little country that punches above our weight. You’d think we could solve that problem over 15 years.

– Nick Leggett, CEO, Road Transport Forum

Freight dismissed in Wellington’s road plans

Let’s Get Wellington Moving (LGWM) is a misnomer for road freight transport and the purpose of the capital city’s airport and sea port connections to the rest of the world are seemingly irrelevant in its plans.

The anti-road, anti-fossil fuel ideologues have taken over and the project could be seen as getting Wellington moving for cyclists and pedestrians alone.

One mode of transport shouldn’t be pitted against another and there should be room for all. Decisions must be weighted by preferred use, volume, and economic loss or gain. But we have to question some of the thinking behind plans afoot.

New Zealand’s only way out of the Covid-19 economic devastation, dealing us daily blows, is to keep the flow of exports and imports moving as efficiently and cost-effectively as possible. That means the best possible access to air and sea ports.

This week alone, we have heard that consumer confidence has hit its lowest point since 2009; Covid-19 has seen 15,998 job losses so far – with many more predicted; and New Zealand’s Gross Domestic Product (GDP) has decreased by 1.6 percent in the first quarter of 2020, the largest quarterly fall in 29 years. Things are seriously grim for those in business, let’s not gloss over that, and no cohesive plan to fix things has been presented to us.

But in Wellington, the city of the still employed public servant and the Monday-Thursday MPs, it seems all roads must be slowed, stopped and narrowed to ensure cyclists and pedestrians have priority access.

While we fully appreciate the city’s decision to focus on moving more people with fewer vehicles, there are a lot of things that need to happen before roads are closed to traffic, speeds are reduced to a crawl, and vehicle lanes are given to cyclists.

Not only would there need to be a reliable and efficient public transport system, but there would also need to be consideration given to the freight that moves through Wellington, along what is in fact, State Highway 1 and therefore, fully funded by Waka Kotahi NZ Transport Agency (NZTA).

We are quite alarmed by some of the suggestions that are being thrown around by LGWM, including a pedestrian crossing on Cobham Drive and reducing vehicle lanes on the quays that access CentrePort Wellington, including the inter-Island ferry terminal.

Getting to Wellington airport has long been a source of frustration for Wellingtonians – it’s a slow journey for a relatively short distance. What we need is four vehicle lanes all the way around the city and to the planes. A second Mt Victoria tunnel would help, but that is now just a pipe dream. To hear that Cobham Drive’s 70kph speed would be reduced to accommodate a pedestrian crossing – when there are other points pedestrians and cyclists can cross and a low volume needing to cross – we believe this seriously undermines an efficient route to the airport, which we hope to see returned to the busy and thriving hub a capital city deserves.

In the time of Covid-19, Wellington’s “Golden Mile” (Courtenay Place, Manners St, Willis St and Lambton Quay) feels more like Pyrite (fool’s gold) as the retail and hospitality sectors struggle to survive or go out of business completely. Closing it off to all but public transport, cyclists and pedestrians makes sense in the long-term. But freight will still have to move around Wellington and to the businesses on those streets.

So, it is concerning to hear the idea being mooted that the quays that would take that traffic, as well as the existing busy traffic flow, be reduced to just one lane in each direction to make way for cycle lanes. Increasing the traffic, but reducing the lanes, doesn’t seem to make any sense given this is a freight route and will be the only way to get to some parts of the city.

We agree with LGWM’s imperative to create a better, safer environment for people walking and on bikes. But the pendulum can’t swing so far that cars and trucks are no longer welcome on the road and the economy of Wellington and the rest of New Zealand is crippled further.

– Nick Leggett, CEO, Road Transport Forum

Best minds required for economic recovery

New Zealand’s Covid-19 experience has shown how out of touch some members of our Government are with the businesses that drive the economy. This is pretty worrying when we look at the road ahead to some kind of economic recovery once the virus has done its worst globally.

This week alone, the Government referred to the five day extension of the Alert Level 4 lockdown as “two business days”; Labour MP Deborah Russell pontificated on the short-comings of small business owners who can’t keep their closed businesses operating in a global pandemic; and Employment Minister Willie Jackson said nobody would be impacted by the lockdown being extended a week.

Even more tone deaf, the Greens came out with a proposal to spend $9 billion over 10 years putting fast trains throughout New Zealand. Hundreds of people are becoming unemployed by the day, businesses are going under, our borders are closed, and this is their best solution?

Like much of New Zealand, the road freight transport industry has a good share of small and medium sized businesses. They have a lot invested in plant and property – their trucks and yards – and every day off the road costs money. The smaller the business, and the longer the days off the road, the more the damage is done.

All businesses will be to some degree reliant on the Government to stimulate the economy both during the various stages of the Covid-19 global pandemic, and once it is over and a vaccine is found.

Given the amount of debt the country will be in, and the hardship facing its people, you want the very best minds on the job and you want their decisions to be based in evidence, not ideology.

Let’s unpick this fast rail idea. The Greens say: “Building rail creates more jobs than building motorways”. We would like to see the evidence base behind that statement before the country throws away $9 billion on what is essentially a pipe-dream.

Rail will never replace roads. We need roads – the Covid-19 crisis has shown us that. All those essential goods and essential workers have gotten to where they need to go via roads. In any crisis, help comes first via roads. Investment in infrastructure to boost the economy must include investment in roads, as well as rail.

If there is $9 billion left over for a vanity project, it surely still has to measure up in a costs versus benefits equation.

As the executive director of the New Zealand Initiative, Dr Oliver Hartwich, told Parliament’s Epidemic Response Select Committee on Thursday, “What distinguishes a good project from a bad one is that a good project’s benefits are greater than its costs”.

Of course there is no mention of this in the Green Party’s statement about fast electric trains for passengers and freight, including on routes such as Christchurch-Ashburton-Timaru.

On that route alone, much of the freight is food – dairy, meat, fruit and vegetables. Food needs to travel by road and one journey will always beat the three putting it on a train would take – truck to train, train to station, truck to end destination. Trains don’t go to supermarkets, or dairies, or other food stores.

As for passengers on that route – let’s take a look at where fast trains already operate, such as Europe. In the France-Germany-the Netherlands-Belgium grouping, you’ve got a combined population of about 178 million people. New Zealand has just 4.7 million people and the Timaru-Ashburton-Christchurch grouping has about 460,000 people. The fast trains in that European cluster are fantastic, but they are also expensive. It is often cheaper to fly the route. So with the huge population base, fast trains still have to cover their costs with high ticket prices for passengers.

Expensive for passengers and not suitable for freight, how exactly is this plan going to help us during one of our worst economic slumps?

We hope the Government’s Infrastructure Industry Reference Group will recommend investing in critical roads at this time. The RTF has written to that group advocating for three road projects that relate directly to efficient movement of freight in the three major economic regions of New Zealand.

These roads are:

  • The Petone-Grenada Link in Wellington
  • The East-West Link between Onehunga and Mt Wellington in Auckland
  • Selwyn to Timaru highway, four lanes

We believe this would better serve our economic rebuild than a very expensive fast rail – which we don’t believe has been properly costed – in a country that doesn’t have the population base to use it.

– 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

 

Port move makes no sense

Anyone who has been to Rotterdam in the Netherlands will know it is a port city that embraces both its rich history, and its future as Europe’s largest sea port. Real estate with a view of the port is prized. Government has always considered the enormous economic might of the port in making decisions about Rotterdam’s development.

It would be good to see the New Zealand Government holding such pride in, and support for, the port in our largest city of Auckland, which is a critical part of the country’s infrastructure. Instead, Ports of Auckland has become a political football.

In December, the Cabinet of the New Zealand Government will consider relocating to Northport, in Northland, the movement of goods currently carried out by Ports of Auckland. The economic advice behind that proposal has been called into question by two reviews from economic analysts, released by Ports of Auckland this week.

Castalia’s report says it will cost about $6.7 billion to move the freight activities of the port in Auckland to Northland. That is almost four times higher than EY’s predicted net cost of $1.8 billion that has been used to sell the idea of the move.

As representatives of freight movers, the RTF strongly urges the Government to take a good look at all the facts and figures before making a decision. If the aim is to boost Northland’s economy, does that really stack up against the impacts for Auckland and the rest of New Zealand?

It’s clear that making Northport the main port for Auckland will require massive investment in road and rail, and frankly, it makes little sense from either an economics or a logistics position. Why would you move goods destined for delivery in Auckland and further south away from the closest port, when the road and rail infrastructure required to then get those goods from that far away port back to Auckland and beyond does not even exist?

You can’t just one day close a major port and open another one that same day. There would need to be overlapping operations for years, with costs galore that would have to be passed on down the line to the end consumer. New Zealand’s location at the bottom of the earth already makes it expensive to import and export goods; we can’t really afford to add to that.

Rather bizarrely, those advocating to relocate the port operations are only talking about freight. They want to keep the economic benefits of having cruise ships and their many well-heeled passengers spending their cash in Auckland. The port has to remain in some capacity, which defies logic.

It smacks of a desire to kick out the blue-collar industries because inner-city businesses and residents don’t like the look of them. Reverse sensitivity seems to be a peculiarity of New Zealanders. People move to the inner city and then don’t like the noise, or bars, or trucks, or cars, or people. International city dwellers at least understand where more than a million people gather – and let’s remember Auckland is a very small city in global terms – there is noise and a changing landscape.

Castalia says the freight that currently flows out of Ports of Auckland would have to travel an extra distance to and from Northport of about 200km by rail and 150km by road. The additional freight task (approximately 400,000 twenty-foot container equivalent unit round trips between Auckland and Northport) will require additional transport infrastructure. On the possibly inaccurate assumption that 70 percent of the additional freight task was handled by rail, there would be more than 500 additional truck journeys per day travelling between Auckland and Northport for container traffic only, with more if the car import business uses the road network. This is just not feasible with the current road network between Auckland and Northport.

The freight task is increasing and the upper North Island is expected to account for most of New Zealand’s population and economic growth over the next 30 years. Ports of Auckland has a 30-year plan, which gives it the capacity to handle the expected freight increases.

On one hand you have an established business with a plan to match growth and on the other you have a pipe dream. The Government cannot sink billions of dollars into this without much better analysis than it currently has before it. New Zealand has to remember its place in the world and not price itself off the market on an act of sheer folly.

– Nick Leggett, CEO, Road Transport Forum

Road trumps rail to meet customer demands

The 2017-18 National Freight Demand Study was released, without fanfare, a couple of weeks ago. This is the first such study in five years and it’s a significant reminder of just how important road transport is to the New Zealand economy.

It’s important to get it straight up front, New Zealand’s freight network works best when there is a balance between rail and road. Each have their benefits, but as the stats show us, road freight is increasing its share because of the flexibility and reliability it offers in getting goods to market.

Most significantly from the report, the growth across the board in our freight task is large; up 18 percent in six years, from 236 million to 278.7 million tonnes per year. This demonstrates the growth New Zealand has enjoyed in our population and economy.

We are guessing that the absence of a trumpeted announcement on the release of the report is because changes to the proportional split across transport modes flies in the face of the rhetoric and indeed, the billions of dollars invested in rail by the Government. I’m talking about the increase in the amount of freight that road transport carries, versus that of rail.

In 2012, road transport was responsible for 215.6 million tonnes or 91 percent of freight movements and 70 percent of tonnes transported per kilometre. Despite a concerted anti-road campaign, and a Government elected in 2017 with an anti-road agenda, road freight’s proportion has increased in the recent study to nearly 93 percent of the freight task, and 75 percent when it comes to tonnes-per-kilometre.

Rail, on the other hand, has retreated from seven to six percent of freight movements. On a tonnes-per-kilometre basis, rail is down from 16 percent down to 12 percent of the freight task. The rationale given by the pro-rail authors of the report is that this drop is down to the Kaikoura earthquake, which knocked out rail in the upper South Island for a long time. But it also reflects a reduction in volume of rail-suitable commodities, such as coal.

Losing a rail line happens far more regularly than people might think. A section of rail line parallel to SH7, the main road linking Reefton and Greymouth, has been closed due to a slip. KiwiRail has been stopping the TranzAlpine at Arthur’s Pass and offering buses for people wanting to continue on to the West Coast. Freight deliveries of coal and milk have been transported by road, instead of rail. Media attention has focused on the corresponding road failure, rather than that of the rail. I guess because if rail fails, there are always other transport options.

The most significant reason for the swing towards road freight is improvement of truck payload efficiency – that means bigger trucks that carry more load, reducing the number of truck trips. Over the past six years, efficiency gains through the uptake of HPMV and 50 MAX have been realised in dairy, logs, livestock, aggregates, and petroleum distribution.

The growth in road freight makes the Government’s decisions to rob the National Land Transport Fund, using road user charges (RUCs) and fuel excise to artificially support rail projects, seem all the more short-sighted. This re-engineering of our transport system to satisfy ideology is not only costly, but flies in the face of economic reality. It is even more short-sighted to turn the tap off on new roads critical to the national freight task, such as the East-West Link, in order to put money into rail projects of dubious economic benefit.

Don’t get me wrong; we support asset renewal in rail as it’s badly overdue for this critical infrastructure. What we don’t support, is the Government continually selling that investment as a way to reduce “dangerous” truck movements on our roads. We also reject this investment in rail over new, safer roads. There should be investment in both road and rail infrastructure.

Roads are more flexible and immediate than rail will ever be. There are 93,000 kms of road in New Zealand and only 4,000 kms of rail track. That split isn’t changing and what’s more, the market is making its choice.

Fewer trucks on the road means fewer jobs, less economic activity and less money in the pockets of all New Zealanders. The National Freight Demand Study proves that people and businesses choose the transport mode that best suits their requirements. In the 21st century economy where timeliness and responsiveness is everything, more often than not, that is delivered via road.

– Nick Leggett, CEO, Road Transport Forum