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

Lack of investment in roads will cost us all

We continue to see evidence of the importance of roads in New Zealand. We have a geographically challenging country and the way we all connect to one another is via roads – 93,000 kilometres of them.

Last week, the 2017-18 National Freight Demand Study was released, showing road transport is the major mode of travel for all our domestic and export food and goods, carrying about 93 percent of the total of 280 million tonnes moved during that period.

On a tonnes per kilometre basis, road transport has grown 16 percent between the 2014 and 2019 reports, while rail has dropped 17 percent. The official word in the report is that the drop in rail freight reflects the impact of the Kaikoura earthquake, and the reduction in coal traffic in 2017-18. I guess you have to grasp at excuses when the evidence doesn’t support the ideological direction of the Government. The contention of the RTF is that the improvement of truck payload efficiency is the real reason for the shift between rail and road. Over the past six years, HPMV and 50Max gains have been realised in dairy, logs, livestock, aggregates, and petroleum distribution, as new vehicles have replaced older, less efficient ones.

This picture, with the backdrop of a tightening economy, suggests the Government should be recognising the correlation between our roads and our way of life.

Sadly, this is not the case. While the Government has quite rightly focused on some aspects of road safety, they don’t seem to connect the importance of the roads themselves, to the safety of the people using them.

We are seeing this in the lowering of speed limits on main highways all around the country. In the South Island, residents are petitioning the New Zealand Transport Agency (NZTA) to scrap proposed lower speed limits on State Highway 6, from Nelson to Blenheim. NZTA cites accident numbers to say the road is unsafe and is proposing reducing the speed from 100 km/h to 80 km/h. If approved, the entire length of SH6 between the two towns, about 110 kilometres, would be not more than 80km/h at any point. NZTA says the “technical assessment of the state of the road” was the reason behind the proposed reduced speed limit.

This is also happening on State Highway 1, around Warkworth and Puhoi north of Auckland, where there is a proposal to reduce the speed limit from 100 km/h to 80 km/h, for 15 kilometres. This is our main state highway north out of our major city, Auckland.

And we are seeing road closures because of a lack of investment. The Manawatu-Taranaki-King Country regions are being significantly impacted by two state highways closed by slips – SH4 between Whanganui and Raetihi and SH43 between Mangaparo and Kururau Road, part of the Forgotten Highway. These road closures are of considerable concern to businesses and residents in these regions, who are facing long and expensive detours. People are losing money, daily. This is busy dairy and logging country and it’s a busy time of year. For years, locals on SH4 have been warning the road needed attention. Now, they are looking at a year, if not years of it being closed. There are school children on one side who cannot get to school on the other side of the slip. This doesn’t just affect this region. It has an impact on all of us when goods we rely on have to travel further to get to us. That means they cost more, at a time when household budgets have very little slack.

What we are seeing is death by a thousand cuts – of our roads and subsequently, of our back pockets. Not fixing roads and lowering speed limits to accommodate not fixing roads will slow us down and cost us more. The Government says it’s nine minutes here, or seven minutes there, but it all adds up to a total journey. As the Nelson locals say, it also causes perverse behaviour. When people are slowed down, they do stupid things.

There’s ideology, not strategy at play. There is no big picture thinking – what is the total impact of dropping the speed limit to 80 km/h on 110 kilometres of road that is used to transport for example, valuable horticulture products to export markets? If two main roads are closed for a long period of time, what is the total impact to all New Zealanders of the additional business costs that generates?

While the Government would have people believe less trucks on the road is a good thing, it’s not. It’s less jobs. It’s less money in rural and provincial New Zealand. It’s decline not growth. It’s the inconvenience of not having what you want when you want it. It’s higher prices for essentials like food. And at the end of the day, it finally impacts those in the cities as well.

– Nick Leggett, CEO, Road Transport Forum

Where the rubber hits the road

One of the best parts of my job is getting out and about to speak to the people running freight companies and finding out what’s going on where the rubber hits the road. Yesterday, with the National Road Carriers chief executive David Aitken, I was able to spend time talking to five Auckland-based companies about opportunities and issues, and there were many recurring themes that line up with what the Road Transport Forum is advocating for on the industry’s behalf.

We saw a tremendous commitment to health and safety and looking after staff. Technology that detects driver fatigue is definitely life-saving and even those who weren’t so keen on it in the first place, have experienced its benefits first-hand. This technology alerts drivers who may close their eyes due to fatigue by shaking their seat, an alarm noise, and an alert to their company so someone can check they are OK. Even the best of drivers can experience fatigue, so it makes sense to invest in solutions like this.

One of the companies we visited, Mainstream, is bringing some creative thinking to health and safety and instead of the traditional high-visibility vests, they have designed their own high-vis shirts. They are made from recycled plastic, so get the environmental tick, and model a rugby league shirt because Mainstream also sponsors the Kiwis and Kiwi Ferns rugby league teams. The photo is me and Mainstream managing director Greg Haliday with one of the shirts.

Yesterday, we saw good companies, employing plenty of people and looking after their employees, and running businesses that keep New Zealand moving. If you look around you, pretty much everything that makes your everyday life tick over came to you via a truck.

So, it is disappointing to hear about some of the issues that are rooted in the anti-road ideology of the current Government. Resoundingly we heard:

  • Infrastructure – the state of some roads is unsafe due to lack of spending on upkeep, poor design and the wrong surface for the environment, and change of use (what were country roads in Auckland now major thoroughfares due to urban sprawl) – this is coming from people who have been using these roads day-after-day, year-after-year
  • Road user charges (RUC) and fuel taxes are increasing, but less is being spent on roads that need to be upgraded/improved/built and in fact, vital major roading projects have been de-funded
  • Money that should be used on roads is being siphoned off for political gain on cycle ways and rail – while rail is part of the transport network, those that use it say it is slow, expensive, unreliable, and up to 50 percent of the time, late
  • Getting the right staff – who pass pre-employment drug testing – requires better immigration pathways so drivers from countries such as the Philippines can be guaranteed a long-term career and a settled lifestyle
  • The emphasis on road safety needs to be broader than speed – professional drivers see distraction as the biggest threat to them eg. car drivers on mobile phones, and they see little policing of that and the other big threats, alcohol and drug abuse
  • Legalising recreational marijuana use and the impact that will have on safety sensitive businesses such as road transport, given the lack of any regulatory regime for road safety behind that.

The romantic notions this Government has around rail is a real concern. Rail can never match the efficiency and speed of road freight. It can’t deliver door-to-door. It’s not suitable for essential goods that must be transported within tight time frames, such as medicines and fresh food. Yet the Government plans to pour billions and billions of dollars into a rail infrastructure that is well past its use-by date. This is at the expense of roads, that all New Zealanders use to get where they need to go and receive all the goods they need to live. It makes no sense at all.

– Nick Leggett, CEO, Road Transport Forum