Rail not the great hope for safer roads

It was interesting to see the Government’s response to our recent request to spend some of the “shovel ready” Covid-19 cash on urgent road repairs for unsafe roads was to promote rail for moving freight.

Together with the Automobile Association, Association of Consultants and Engineers, Civil Contractors NZ, Employers and Manufacturers Association, and Infrastructure NZ, the RTF has written to Ministers and spoken with their representatives about the dire state of New Zealand roads. This has generated plenty of media and public debate this week, with the six organisations representing a broad range of interests, including private car users.

Speaking to RNZ, Transport Minister Phil Twyford said: “Our record investments in rail will help take pressure off our roads by moving more freight to rail. It’s going to take more than a few years to undo a decade of neglect.”

In the same RNZ piece he said the government agreed there had been underinvestment for a decade prior to 2017 so had increased highway maintenance spending on average by 36 percent. If re-elected, I would up that another 17 percent.

Yet early in the first-term of this Labour-led coalition government he said: “there has been an over-investment in roads and motorways for decades in this country”.

We hope the increased spending promise means he’s had a change of heart from his earlier views. The six organisations that have asked for urgent road repairs have all been hearing from our members what damages and costs they are incurring because of sub-standard and unsafe road surfaces.

The pro-rail brigade actually believes that in a long, skinny country with 93,000 kms of road and 4,000 kms of rail tracks, that rail can make a dent in the effectiveness, convenience and efficiency of road freight. This is despite all evidence to the contrary. Even in European countries with vast and efficient railways, freight movers pick road over rail.

In New Zealand, the National Freight Demand Study, commissioned by the Ministry of Transport and released in October 2019, showed that freight delivered by road was 93% of the freight task, up 16% since 2012, while rail was 5.6% of the freight task, down 17% since 2012.

It is also interesting to note, again from Ministry of Transport data, the tonnage of dairy being transported on the rail network has dropped from about 3.9 million tonnes in 2013 to 2.3 million tonnes at the beginning of this year.

Ultimately, the market will decide which is the best mode for transporting their goods. Road offers door-to-door delivery, even in the remote parts of the country; is more resilient in weather events, natural disasters, and Covid-19; and is reliable for time-sensitive perishable goods.

Only 3-7 percent of the road freight task is contestable by rail. Conversely, most rail freight is contestable by road, except maybe coal transport across the Southern Alps – trains are good for that because of the weight of the coal.

Roads are the lifeblood of the economy. All road users pay for them and we all benefit from them.

Over $2 billion in taxes (petrol tax and road user charges) is collected each year for the National Land Transport Fund to fund roads. But this is now being used to fund modes of transport that make no contribution. This cross-subsidisation is at the expense of roads and hits consumers in the back pocket.

The truth is that we don’t need rail, or public transport, over roads. We need a good balance of all three. RTF supports public transport and rail, particularly rail for public transport.

What we have an issue with is the defunding of roads for pet projects in rail that cannot provide a viable return on investment, or the efficiency, effectiveness, reliability and cost benefits of road freight.

The Government is slowing down the economy by not spending on roads. Slowing down movement of goods, particularly essentials such as food and medicines, impacts on the cost of living for all New Zealanders. Every delay in delivery costs someone.

– 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

Minister bags her own Government’s infrastructure announcement

On 2 February, Julie Anne Genter provided judgement to the world on “the good, bad and the ugly” of the recent Government infrastructure announcement, via an article in The Spinoff.

A casual observer would not recognise that the author was in fact, Associate Minister of Transport, with actual responsibility for the package. It is just plain weird for her to be passing judgement on its key elements and stating that the New Zealand Upgrade “falls short” on what is required to “reduce climate pollution, ensuring people have enough to thrive, and protecting nature”.

That however, is the nature of the current coalition Government. Once upon a time, Cabinet responsibility meant that collectively made decisions were appropriately backed by all Ministers, and their Associates. Now, not so much.

In a case of having her cake and eating it too, Julie Anne Genter agrees with a Green pressure group that it was disappointing that incredibly expensive motorway projects made up the lion’s share of the New Zealand Upgrade and that it is “nowhere near what we need.”

She then goes on to attack “transport” saying every sector must pull its weight in cleaning up our act and that we have been one of the worst in recent years. Of course, the usual arguments are then prevailed upon about transporting more freight by sea and rail. She mentions the need to electrify the vehicle fleet (no other options though) and of course doesn’t mention any incentives for business that are well within her power to fight for now.

Our industry needs to be on guard when we reflect on the new roads promised in the New Zealand Upgrade. Firstly, there are two or three elections between now and the start of some projects. It’s concerning that Julie Anne Genter goes on to say that she will be reviewing the scope of projects like Mill Road and the Tauranga Northern Link to make sure they include continuous bus lanes and off-road cycleways. To me, this sounds as though the traditional four lane road that we thought we had been promised could well be compromised – becoming two lanes for cars and trucks (one in each direction) and two lanes for buses and bikes – and be subject to a “green wash”.

The other really serious concern for our industry – and any Kiwi keen on moving around and having a productive economy – is that if this incarnation of Government alters post-election on 19 September to a Labour-Green coalition; how safe are any of the announcements we value from the New Zealand Upgrade package? If the Greens are a stronger voice in the next Government, the demands of their extreme elements will only grow. Businesses should be worried.

In the “green wash” we have to also watch the fantasy this Government has created around rail. This week we submitted on a Bill before Parliament proposing to give yet more money to subsidise rail, and to take it from the fund paid for by road users to maintain and build roads. I’ve labelled this highway robbery. We can only see roads further run down and unsafe as the largesse to KiwiRail continues unchecked.

Rail’s environmental benefits over road are simply illusionary. Any level of success for rail transport is entirely dependent on truck transport. Measuring environmental performance solely on the basis of the relative performance of the truck versus train, instead of the reality of point-to-point sender to receiver, is a very narrow perspective, typically favoured by academics without any interest in economics.

And despite the socialist desire to control markets, customers actually decide how they want to send their goods. The vast majority favour road. Rail freight’s strength is in long-distance transportation (over 500km) of high volumes of relatively low value products, such as coal. It’s interesting to see the Green movement promoting that.

The reality is, this Government spurns business and makes decisions based on ideology alone.

– Nick Leggett, CEO, Road Transport Forum

Road users should fund roads, not rail

This week, the Government laid down the track to siphon money out of the state purse for building and fixing roads and into the bottomless money pit that is rail.

With the first reading in Parliament of the Land Transport (Rail) Legislation Bill, the Government is on its way to extending the National Land Transport Fund (NLTF) to subsidise rail. That means, the fuel tax and road user charges that people who use roads pay to help fund those roads, will now be “competitive” dollars, available to rail. It doesn’t matter if you don’t use rail, you’ll still be paying for it when you use the road. And given the fund is already not enough to pay for roads, you can expect to pay more for everything to add the dollars needed to prop up the Government’s pet project, rail.

While the legislation introduces track charges for rail service providers that will place revenue into the NLTF, there is little detail on this and it is unlikely this money will come close to funding the likely draw-downs for rail. And rail projects going through the NLTF will not have to go through the rigour roading projects do – they can just be signed off direct by the Minister of Transport.

Let’s be clear, KiwiRail is a State-Owned Enterprise that is supposed to make its own way by making a profit. We think the NLTF should be ring-fenced for roads and other funding sources should be found for rail.

It is also clear there is a place for rail.

Rail is important in cities, where it is electric and it can provide public transport to ease road congestion and reduce emissions. As a user of commuter rail, I know it’s effective at removing vehicles off roads and therefore, relieving congestion. To continue to do that, public transport must be convenient, affordable and reliable.

Outside the cities, New Zealanders rely on roads because there is no public transport and the distances travelled are too great for most people to walk or cycle. They use roads, and they pay for them. The Government’s carless nirvana is a wee way off yet.

Rail’s place in the regions needs to be considered with economics and facts, and without all the romanticism and emotion that seems to be associated with it when it comes to the freight tasks.

In its rather breathless press release backing the Government’s Bill, the Rail and Maritime Transport Union said:

“As the smoke from Australian bush fires stains New Zealand glaciers the colour of old blood, we are all forced to consider the burning urgency of confronting and defeating climate change.

“The only way to do that is through dramatic reduction in carbon emissions, and the only way to do that is by replacing dirty and inefficient modes of transport with cleaner and greener technology. Rail is the future we’ve been waiting for, and we don’t have any time to delay.”

Let’s not pretend this is a win for the environment. Outside the city boundaries rail is powered by diesel, the same as the trucks that are in fact, the preferred freight movement option. Trucks win every day because they deliver door-to-door, on time. Road carries 93 percent of New Zealand’s freight task. Rail carries six percent.

To have any comparative environmental benefits, a rail journey needs to be long, like about 400km at least. And one of the things that rail is good for is heavy loads, like bringing coal out of the mines to end-users; not a task favoured by the environmentalists.

We are sick of the rhetoric, double-standards, and of the Government demonising trucks. We are keen to look at better ways of funding both road and rail, but if it is to truly be a level playing field, rail needs to pay their way. Large parts of the rail network are very old and will need billions of dollars in new investment and we think that should come from Government borrowing, rather than the NLTF. That’s of course, assuming the case for pouring those billions of tax payer dollars into rail stacks up economically.

Merry Christmas, and if you are still waiting for a package for under the tree, it will come to you via road.

– 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

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