Wellingtonians mere pawns in Government games

I know that most of the country isn’t really that interested in what happens in the capital, but please indulge me for this one blog.

As somebody who lives and is passionate about the Wellington region, it makes me irate to see Wellingtonians and their transport issues become pawns in this Government’s ideological games.

It was disappointing this week that Chief Ombudsman, Peter Boshier, did not force Julie-Anne Genter to release the infamous letter she sent to Phil Twyford on the Let’s Get Wellington Moving Project. Nevertheless, Minister Genter was compelled to disclose its contents and they were as bad as we all feared – she threatened the loss of Green Party support unless cycling lanes and a light rail were made priorities ahead of a second Mt Victoria tunnel. The result was a Let’s Get Wellington Moving plan that would do little to alleviate traffic congestion and delayed even turning a sod on the second Mt Victoria tunnel until 2029. Code for, it’s not actually going to be built as part of this plan.

Now, anyone who has spent anytime in Wellington knows that Mt Victoria and the Basin Reserve along with the inadequate 3-lane Terrace Tunnel are our biggest transport issues. They create bottlenecks that at busy times result in large parts of the city being locked up in congestion. Over the last 10-15 years these congestion issues have become so bad that the city really does have a transport crisis on its hands. A number of studies have confirmed that for a city of its size Wellington is one of the most congested in the world. What’s worse, is that needed roading improvements north in the form of Transmission Gully and the Kapiti Expressway mean that more traffic will be coming into the Wellington CBD.

It has become so difficult to get across town at times that traffic is now having a measurable detrimental effect on the lives of Wellingtonians. Most people I know just refuse to go into the city on a Saturday morning, for example.

The reality is that you can add as many cycleways as you like but with the geography and weather that Wellington has, cycling will only ever take a tiny proportion of traffic off the road and will never be the primary form of transport for most Wellingtonians.

I am often accused of being anti-public transport for voicing the concerns I have regarding our road (as a a regular user of our trains to get to work, it’s simply not true). However, the last time I looked; buses also travelled on roads. Unfortunately, in Wellington the bus system is so fragile that it is actually contributing to the city’s congestion problems. The Let’s Get Wellington Moving project could have chosen to run with a project called Bus Priority, which would have meant more buses in dedicated lanes up and running within 18 months. Instead, they’ve lumbered the region and city with an unfunded, futuristic scheme that will sadly never got off the ground and make a real difference in moving freight and people around.

A fully-functioning public transport system, including a reliable bus network, that supplements private and commercial transport, requires transport corridors made up of multi-lane roads, the tunnels and flyovers to get around natural bottlenecks.

Focusing on those things rather than the folly of a pie-in-the-sky light rail project is what a responsible Government that respects the needs of Wellingtonians would do. Unfortunately, the anti-road brigade who are now occupying some parts of Government (but not all), are so fundamentally blinkered that there is little hope of genuine progress.

Finally, let me wish new Wellington Mayor Andy Foster the best of luck in his new role. It cannot be underestimated just what a difficult job he has to get agreement with our Government and sort through this mess.

– 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

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

Spend that cash

On Tuesday, the Government slapped itself on the back and congratulated itself on a massive $7.5 billion surplus – the biggest surplus since 2008 prior to the global financial crisis.

This is against a backdrop of the lowest business confidence since just after that global financial crisis; a massive dive in rural confidence tagged to farmers’ concerns about the Government’s policy direction; and a slowing economy in the provincial regions that previously, had been booming.

There is something wrong with this picture. The adage that perception is reality rings true. Most of New Zealand is feeling the pinch, but the Government continues to tell us everything is OK.

For some time, we have been calling for the Government to urgently spend some money on roads – making existing roads safe and building new, four-lane roads where they are most needed. It is our roading network that keeps our economy moving and growing and food on our tables. People and goods need to get from A to B in the most timely, safe, cost-effective and efficient manner. Even if you are giving a nod to the environment, that makes the most sense, as congestion and delays on the road only increase the emissions the Government is trying to reduce.

But with the ideology in play, circular reasoning is being applied around the negative impacts of cars and trucks, rather than their essential role in our high standard of living. This sees a reluctance by the Government to follow all the expert advice that says, “spend some money on infrastructure to boost the economy”.

Back in June, the Prime Minister’s Business Advisory Council warned that New Zealand is at an “infrastructure crisis point”. It said there is “no overarching vision or leadership in New Zealand for infrastructure development”.

You would think this would raise some concerns, given the Government’s heavy reliance on advisory groups at the expense of core government agencies such as Treasury, who are surely recommending spending some money to make some money.

Last week, we saw stark evidence of the impact of not spending on infrastructure. A key part of the State Highway network collapsed, literally (pictured above – photo from Mark Brimblecombe). Locals say Parapara Road, on State Highway 4 between Whanganui and Raetihi, has been problematic for the past 15 years.  A sizeable crack appeared last week and then the road broke entirely, with hundreds of cubic metres of soft earth slipping and sliding and cutting off vital transport links for an indefinite period.

Drone footage and photos of the slip illustrate how significant it is. The slip is still moving and it is not going to be fixed any time soon, if ever.

This leaves farmers, school children, ambulances, and freight companies facing major detours for an indefinite period of time. The recommended detour route will add at least one hour to every journey. About 1000 vehicles use the Parapara Rd daily, about 10 percent of which are heavy vehicles. Health care professionals are looking at helicoptering out critical patients, as a road journey will now be so long. This is a critical situation.

Steve McDougall from McCarthy’s Transport has been quoted as saying the company’s logging trucks will now have to connect with State Highway 1 at Bulls, or State Highway 3 via New Plymouth, to travel northwards. He says this will have a catastrophic effect on the business that will cost between $30,000 and $40,000 per day. It will reduce productivity – less trips will be possible each day. That cost will be passed on to the forest owners and the end user customer.

The cost of not investing in roads ultimately hurts all New Zealand families. Basics, such as food costs and access to health care cause the initial pain, but the cost across the supply chain of all goods just goes up and up.

We cannot have major roads collapsing. Look at how long it is taking to find a fix to the Manawatu Gorge. The Government needs to apply some basic economics to its thinking. How much cost are they prepared to add to every Kiwi household so they can say, “look how much money we’ve got in the bank”?

– Nick Leggett, CEO, Road Transport Forum

Rhetoric rather than action on fuel costs

Last week, we saw the Prime Minister accusing petrol companies of fleecing New Zealanders. She came out all guns blazing, but then said those of us being fleeced will just have to wait for a solution.

The report she was so incensed about was after all, just a draft. She will have to wait for the final report from the Commerce Commission into the retail fuel sector, due in December this year, before deciding what to actually do. Cynics might say slashing petrol prices as part of an election campaign could be the action taken. The Government is certainly taking enough in tax at the pump to make a price cut.

The strident prose from the Prime Minister fell a bit flat when she had no action plan to back it up. She broke about every rule of politics, management, communications, and making an announcement, by having nothing to really announce after blowing up a situation into a “really big thing”.

She’s left a void of five or six months where people will continue to be “fleeced at the pump”. If the situation was so dire, she’s the Prime Minister, she could have announced some immediate actions. Instead she promised the Government would “make a difference at the pump”, but couldn’t say when that might be, or what that might be.

So, for most people, life goes on trying to make ends meet and worrying about the increasing cost of living in an economy that no one has much confidence in.

This is all part of the confusing messaging we continue to get from this Government when it comes to roads, cars, trucks and the use of fossil fuels. One minute they are saying there is no money for roads; they are ending all support for fossil fuel industries in New Zealand, including exploration; and telling us fossil-fuelled vehicles are ruining the planet. The next minute they are the defenders of users of fossil-fuelled vehicles, ignoring the fact that the biggest fuel cost is the taxes they have imposed to further incentivise people to move away from such vehicles.

They have once again shown they are anti-business and do not understand basic economics, it is no wonder business confidence is so low.

The above graph from the Market study into the retail fuel sector Draft report (page 24) shows taxes at about $0.97 per litre on 91 Octane. The importer costs, about $0.83 per litre, are the costs of importing fuel to New Zealand. Importer margins, about $0.34 per litre, represent the gross margin available to fuel importers to cover domestic transportation, distribution and retailing costs in New Zealand, as well as profit margins. So that $0.34 per litre is not profit.

When you put the $0.97 per litre tax, which goes into the Government coffers, against the $0.34 per litre that is not profit, but the gross margin available to fuel importers, who is doing the fleecing becomes a bit blurred.

The tax take is made up of fuel excise, ACC levies, Emissions Trading Scheme (ETS) levy, and the Auckland regional fuel tax; mostly fuel excise and Auckland regional fuel tax which is supposed to be spent on roads. Our industry is concerned that tax take isn’t being put back into roads, which are deteriorating badly.

As trucks will be reliant on fossil fuels for some time, until someone comes up with a viable mass-market alternative, we are also concerned this Government runs the risk of running the oil companies out of town by failing to understand they are commercial businesses that need to make profits, not benevolent societies.

If this Government really wants to make a difference at the pump, they may want to consider their high tax take on fuel and their role in creating a competitive wholesale market before they criticise the fuel companies.

And they need to be clear on their messaging and make announcements that are actually about doing something, not just more talk and blaming the previous Government for everything.

–  Nick Leggett, CEO, Road Transport Forum

Let’s get practical about climate change

While politicians and celebrities gnash their teeth and shout to anyone who will listen that we are in the middle of a climate change “crisis” or “emergency”, a lot of others are looking at practical and workable solutions to stop the mercury rising.

None more so than those at the local government level, where they actually mop up after a real crisis or emergency, including those caused by dramatic weather patterns or natural disasters which generally impact at a local, rather than national, level.

So, it was interesting this week to present at and be part of a panel discussion at the Road Controlling Authorities Forum in Wellington, looking at the impacts of climate change in relation to transport.

Without question the freight and logistics sector will face increasing pressure from both government and our customers to reduce emissions. But we possibly aren’t as bad as people think.

The energy sector accounts for about 40 percent of New Zealand’s Greenhouse Gas emissions, with transport fuels about 17 percent of that total. About five to seven percent of emissions come from the heavy transport industry.

Road freight transport intersects with those controlling roads on the climate change front in areas such as delays due to extreme weather and storm events; infrastructure condition deteriorating faster with extreme heat or excessive rain; and bad roads causing delays and increasing safety risks such as, more road works, driver fatigue, and additional time-costs for end consumers.

In a real crisis or emergency, local and central government will be more reliant on roads than other parts of the transport network. With increased coastal inundation, or a natural disaster like an earthquake, many rail lines are quickly out of commission. Roads also suffer, as quite a lot of our main highways are vulnerable to such events, but there are usually alternate routes and events are localised, so other parts of New Zealand can supply an affected area, by road.

New Zealand is leading the way in looking at mitigating climate change and we support the principles of the Zero Carbon Bill, currently being considered by the Environment Select Committee.

But we  think that addressing climate change is more than focusing on net zero emissions by 2050. It is also looking at making our infrastructure network resilient and planning for events along the way.

On the emissions front, road freight is a sector that quickly adopts technology efficiencies. Noxious emissions from trucks have been slashed by 98 percent in the past 20 years, through use of technology. European emission standards are applied to much of the heavy vehicle fleet to reduce levels of harmful exhaust emissions, currently Euro Standard 6, which requires an additive to be used in fuelling heavy diesel trucks.

While there are electric options for car drivers, any real alternative fuel vehicle at the heavy truck level is still some way off. In the rush to remove reliance on fossil fuels, we need alternative energy sources in place. And we need to look at the whole picture, for example, the batteries that power green vehicles have been linked to human rights abuses in the mining of lithium and cobalt.

Our industry is keen to find solutions in New Zealand – we are known for our problem-solving and innovation, so let’s lead the way here if we can.

TIL Logistics has partnered with New Plymouth-based Hiringa Energy to develop hydrogen fuel cell technology for its transport vehicle fleet and they hope to begin their first hydrogen vehicle trials in 2020.

It will be interesting to see the results of the trials both here with Hiringa and overseas, where similar research and development is underway, as to whether hydrogen fuel cells and the complex infrastructure that comes along with that technology can displace the battery-based electric motor as the clean alternative for heavy transport.

I recently visited Tranzurban, in Wellington, and using their own ingenuity they have built the first full electric double-decker buses in the world, made up from components they have sourced and put together in a unique way.

There’s still a long way to go, but our industry is poised to take a bigger role in the movement to combat climate change in a global sense. At the same time, individual companies are looking at their sustainability obligations to meet their customers’ expectations and be good global citizens. And when the real crisis, catastrophe, or disaster happens, we’ll be there delivering the goods.

Please note: Being uncomfortable with changing the meaning of the words crisis and emergency does not make me a climate change denier.

– Nick Leggett – CEO, Road Transport Forum

Strong economy good for wellbeing

It would be a heartless person who didn’t commend the Government for the commitment it showed to New Zealand’s most disadvantaged people in announcing its Wellbeing Budget yesterday.

It would be good to get to the bottom of why this country needs to spend so much on mental health care and why many of our young people don’t seem to have much hope. When you look at the Scandinavian countries that always score so highly on global “happiness” surveys, it seems that at least one factor contributing to a nation’s wellbeing is a strong economy that offers hope of a good, balanced lifestyle. Yesterday’s budget was not one that will transform our economy.

As a trading nation that is moving goods around 24 hours a day, seven days a week, road transport is the lifeblood of our economy. Currently trucks transport around 90 percent of New Zealand’s total freight by weight, with seven percent going by rail and the rest by air and coastal shipping. Your food, clothes, furniture, cars, whiteware and appliances, office products, technology, and pretty much everything else, has travelled via truck at some point to get to you.

So, it is concerning to see so much money being pumped into rail – $1.41 billion allocated to KiwiRail over the next two years in yesterday’s budget – without an equivalent investment in roads. And it was disappointing to hear Prime Minister Jacinda Ardern in her Budget speech at Parliament yesterday shout, “If you want to talk about safety on our roads, get freight off it and get it on to rail.” Incidentally, we would like to see the evidence behind this call. Also, how will the big investment in rail take freight off trucks specifically? The truth is that there is a lot of money going into rail that will probably not shift the freight task in any measurable direction away from roading.

This push to revive a rail freight network that has essentially failed in the past and as a consequence, has become run-down, at the expense of the already functioning road freight network, doesn’t feel visionary. If ever, it will be a long time before there is any evidence of more freight being moved by rail and fewer heavy trucks on the road. In the meantime, road conditions will worsen without investment and that will impact road safety and the economy. It all feels fine when we have a strong economy, but we require the Government to be investing now in modes that will carry and build our nation when things slow.

With the budget also pouring more money into forestry, it seems extraordinary that the Government hasn’t considered what happens to all those trees when they are harvested. They go off shore, to boost our export earnings, and they get from the forest via logging trucks – heavy vehicles that need good roads.

Anyone who spent budget night in Wellington’s wild weather trying to get home to the suburbs out of the city, by car and public transport – a two-hour journey for many that would normally be 20-40 minutes – will be aware of how lacking in resilience our infrastructure is. They might have spent some of that time grid-locked on both State Highway 1 and 2 contemplating the value of maybe some budget dollars going to securing our economy and productivity with good, resilient infrastructure.

As politicians were in the Beehive clinking their glasses of pinot noir and congratulating themselves on their citizens’ wellbeing, on the dark, wet, windy streets beyond their windows it felt like the economy was slowing even more and its vitality – our extensive roading network that needs to be resilient in a country plagued by natural disasters – was being ignored. The budget didn’t feel very strategic, or like there was big-picture future planning; more like doling out money to the pet projects of coalition partners.

– Nick Leggett, CEO, Road Transport Forum