Good customers advantaged when demand outstrips supply

Inflation, and with it, living costs and wages, are on their way up. This is not good news and many who weren’t around in the 1970s and 1980s, when inflation rates peaked above 12 percent, have no experience in dealing with this economic hit.

We’re a long way from those bad old days, but in the second quarter of this year the annual inflation rate hit 3.3 percent, from 1.5 percent in the first quarter – the highest annual rate since 2011. Economists predict this is just the beginning as the real costs of heavy Government spending will be seen in rising inflation.

This comes during the time of Covid, which has also hit the supply chain significantly with high demand, and low supply. With our indefinitely closed border – even to Australia; our small size as an international market; and our distant location from any other market, New Zealand will not fare well in the next couple of years when it comes to getting goods in and out of the country. Exports were already down 25 percent in the first quarter of this year.

As we maintain Fortress New Zealand while the rest of the world opens up, we will be very much on our own. There are not enough people contributing to the economy here for that to be a good thing.

The silver lining of knowing what is coming, in a time of much uncertainty otherwise, is we can prepare in advance, as best we can. Now is the time to set up business practices and structures to be best positioned to ride the wave.

In the road freight transport industry, the balance of power is shifting. Where many operators have been at the beck and call of customers who continue to drive prices and conditions down to the frankly, unreasonable and unsustainable, it’s time for smart operators to rethink those relationships.

When the supply side is constrained, long-term relationships matter. I’ll deliver to you, because you’ve been good to me for years, but not to you, who always try to screw me over with threats of taking away my work and giving it to my competitor down the road. The reality is, those who continually undercut others won’t survive the rapidly increasing cost of doing business.

We have seen the worst of the uneven balance of power in the whole of the supply chain in the release this week of the Commerce Commission’s draft report into competition in the retail grocery sector. It has found that the duopoly of Woolworths NZ and Foodstuffs, without real competition, are able to exercise their buying power to push excess risks, costs and uncertainty onto suppliers. That can ruin small businesses. It’s their way or the highway and transport operators have been caught up in that.

The report is very detailed and the Road Transport Forum will be commenting on it when we have digested it, but the idea of an industry Code of Conduct allowing suppliers to bargain collectively has appeal.

As the influences on the economy shift, road freight transport operators are going to have to get real about their business costs and increase their prices.

It has been reported that 83% of retailers expect to increase their prices. If you don’t pass on the costs you are incurring, they will go straight to your bottom line and eventually, you will go out of business.

In my travels this week I have been hearing operators are already feeling the pinch of the limited supply of people and equipment. With people not allowed into New Zealand and equipment impacted by the supply chain issues, established carriers can’t fulfil some of their long-term contracts. I’m keen to hear from others of you across New Zealand whether this is a common issue for your business. 

In that scenario, if you have to ditch customers, you are going to hold on to the customers who enable you to run a business that can pay you and the staff. Remember, wages are going to go up as the inflation and cost of living goes up.

This also presents the opportunity for operators to use their own networks and technology that can improve efficiency. This might be worth exploring as an industry.

There is always opportunity if you know where to look for it, as many who have been in the road freight transport business a long time will be aware. In the long term, the rocky road ahead may in fact, provide a better path to a sustainable business for many transport operators.

Buckle up and take control of the ride ahead.

– Nick Leggett, CEO, Road Transport Forum

Time to look at transport resilience

Another week, another major weather event, a new lot of significant State Highway road damage and communities cut off as a result.

This time, the top of the South Island and parts of the West Coast got hammered by rainfall that closed mountain passes, roads connecting West Coast towns, Blenheim to Nelson, and Picton to anywhere. We’ve seen the clean-up in will take months and many dollars.

We are concerned there won’t be enough money in the kitty to fix these blocked and damaged roads while roading money is being poured into rail and siphoned off to accommodate the minority road users – cyclists and pedestrians.

I’ve been up in Northland this week, seeing for myself the appalling state of their State Highway network – above is one of the photos I’ve taken. As one local operator told me, “there is just no room for error” on these narrow roads with the now all too familiar cracked and pitted surfaces.

We know that substandard road building has taken its toll, but so has maintenance underfunding, and nowhere is that more evident than in the northern tip of our country. Everywhere I looked, I saw the now familiar rutting and cracking, along with those smooth surfaces that appear when you know a road surface is degrading. Coming past Ōkaihau, heading north on State Highway 1, I was appalled how such a long piece of road could be allowed to be in such a poor condition.  

Lots of people want to attack Waka Kotahi, but I suspect they are as frustrated as we are. They don’t want to let roading quality decline further, as they are responsible professionals.

We have to direct our voices and concern where it will be most effective, and where it belongs – that’s with the politicians. While the Government has helpfully increased road maintenance funding, in real terms we are still falling behind because costs have increased faster than the money has. Our roads are going to continue to decay until Waka Kotahi gets the funding they need. Of course, we know that the more the assets degrade, the more they cost to bring up to the standard we require of them. RTF is continuing to stand up to ensure money taken off those of you who pay road user charges, is spent where it should be.  

The Government has a view that if it upgrades rail lines that were allowed to fall into decline because they simply weren’t a cost effective way to move people or freight, they won’t need to spend so much on roads, because less freight and cars will be travelling that way and it will miraculously all convert to rail.

New Zealand’s surface freight travels over approximately 3,700km of rail track and some 11,000km of State Highway road network. Given the extent of roads and the other benefits provided (door-to-door delivery, efficiency, etc), 93 percent of New Zealand’s freight is moved by road.

A fundamental flaw in the present approach to transport infrastructure policy is a misplaced ideological position that rail freight is a competent competitor to road freight, instead of being seen as a complementary service. This position is based on an irrational assumption that rail can flourish without road transport support. In reality, it is the opposite. Only six percent of freight is contestable by rail and it is unlikely that will increase by too many percentage points.

There are some basic infrastructure needs that must be met for our economy to remain competitive and that must include high performing roads for a long time to come.

The reality is that roads connect those places politicians and city-dwelling policy writers seem to conveniently forget about – the South Island and hinterland New Zealand. Yet these areas are where a lot of New Zealand’s wealth comes from.

We don’t want roads to get run down to the point the rail lines were because the fact is, roads are more important to the economy, connectivity, and individual New Zealanders than rail will ever be. If roads are allowed to deteriorate much more, the cost of bringing them back to a safe standard could be many billions of dollars.

Instead of trying to socially engineer people’s behaviour without clear evidence of any kind of benefits, the Government would be better to focus on the resilience of the transport network in a small, trading nation with a high natural disaster risk profile.

– Nick Leggett, CEO, Road Transport Forum

Truck drivers need to be prioritised for vaccine

Despite what you hear at the Government’s daily public relations press conferences, getting the Covid-19 vaccine in New Zealand is a bit like throwing the little ball into the roulette wheel at the casino – it’s a game of chance.

My luck came in on the weekend when I got a call to say the local vaccination centre had 1,000 doses of the vaccine and only 500 people had turned up; so, 500 vaccines were going spare.

I packed the parents in the car and got down there as fast as I could. I was lucky enough to be offered the jab while I was there and I gladly took it, while feeling slightly guilty that so many people I know in Wellington in the high-risk categories are still waiting for their call up. If I’d had more time to think about it, I would have put the call out far and wide, but it all happened so quickly. 

Unfortunately, as we watch what is happening in the other largely unvaccinated country across the Tasman, we’d like to see better odds for the likes of truck drivers who are at risk if there is a leak of the Delta variant of Covid-19 here.

I say that as I look out at the “covid ship” in Wellington harbour – the Viking Bay fishing vessel that berthed here with most of its crew infected and ashore at a Wellington hotel. Other boats are now docking at other ports around New Zealand with crews ill with Covid-19.

Most people will be familiar with the removal crew in Australia who took their Covid-19 from New South Wales to Victoria and South Australia. They have created serious problems for the two additional states they worked in.

We are in the same spot as Australia. While the rest of the world has high vaccination rates, we don’t, and that leaves us vulnerable.

It is unclear how our vaccination roll out is actually working – different to what is being said about how it is working. Much of Auckland seems to be able to get the vaccine, while the rest of the country waits. And the Government are planning a mass Covid-19 vaccination event in south Auckland at the end of July where people in the lower risk group 4 will be vaccinated before those in the higher risk groups 1, 2 and 3.

Earlier this week, the Government announced mandatory vaccination for workers at ports and airports who are the greatest risk of exposure to Covid-19. This is in addition to workers at Managed Isolation and Quarantine (MIQ) facilities.

Trucks service all of these places. This is why we wrote to Minister for Covid-19 Response Chris Hipkins in January this year asking for truck drivers to be given priority for vaccination. He replied in March directing us to Government websites for information. No priority given.

With the global disruption in the supply chain, truck drivers can spend considerable time on ports waiting to load or unload. And how do you think food and other goods are delivered to the MIQ facilities, or goods off planes and to their final destination?

With this week’s announcement there are changes to the COVID-19 Public Health Response (Vaccinations) Amendment Order 2021. Reading Schedule 2 Groups of affected persons I would suggest truck drivers would fit into some of the groups outlined, although they are not specifically listed.

We’ve been asking from the start about when truck drivers could be prioritised for vaccination. It seems that national co-ordination has gone out the window and it’s down to who you hear from in your local area on the bush telegraph. Fine for many of us, but it’s not addressing high needs groups in a systematic way. We should be doing so much better; perhaps get a logistics company or two to run this, not policy wonks who have only ever dealt in the theoretical. 

And while it is now mandatory for some workers to get the vaccine, where do they go to get it?

I’m not the first, nor will I be the last person representing groups of people impacted by Covid-19 professionally to ask the Government to show us the plan moving forward and to be open and transparent about the vaccine rollout and who they are prioritising.

– Nick Leggett, CEO, Road Transport Forum

Employers need to be ready for training and development

Covid-19 has taught businesses the world over the need for an open mind and agility.

If we are looking for an upside of the virus that has crippled the world for a year and a half, it is that employers have become much more aware of the health and hopes of their employees.

Some employers have adjusted well, while others are trying to fight the tide and go “back to the way things were”.

It is pretty clear things will never go back to the way they were, particularly on the employment front.

New Zealand has a chronic shortage of workers due to our indefinitely closed border and aggressive immigration settings.

Workers have a different set of expectations to what they might have had at the start of 2020, pre-Covid.

The Road Transport Forum has discovered as we roll out our traineeship Te ara ki tua Road to success, that transport companies are no different to many others in New Zealand.

The New Zealand employment landscape has for many years shared that relaxed approach the country is famous for. People are promoted to management without any skills and training, but just by virtue of being there a long time or being related to someone who matters. Human resources is the short straw given to someone who was away at the time the straws were handed out. As long as people were turning up to work every day and were doing what they were told, no one bothered too much with caring about whether or not their employees were happy or wanted some kind of development and career progression. If they left, it was easy to replace them.

That landscape is now unrecognisable. It has been excavated big time. The unemployment rate for the March 2021 quarter is 4.7 percent. There are no new people coming into the country and some of the visa holders who are here are having to leave. It’s an employees’ market.

Younger people entering the job market have different expectations to their parents. They can afford to be selective and they vote with their feet.

Employers need to change quickly if they don’t want their businesses to suddenly be crippled by a shortage of workers. To take on trainees to ensure sustainability of their workforce, they need to have some basics in place.

A trainee needs training. Some of that will be provided externally, but the employers need someone in the company to train and/or mentor those new to the industry and wanting to learn all they can.

New Zealand presents a challenging environment for many people and their employers need to have enough human resources capability to deal with the fact that people have problems that can impact on their work. Dealing with those problems quickly is best for everyone.

Covid-19 has thrown up a few problems of its own, including burnout and stress.

We also have strict health and safety at work laws which hold boards, as well as chief executives, accountable. And the road freight transport industry is heavily regulated.

The RTF is doing all we can to get new people into the road freight transport industry and there is a lot of interest in the Te ara ki tua Road to success traineeship from both employers and potential trainees. Since we launched in April this year, 36 transport businesses have signed up and are either already working with their trainee(s) or awaiting an appropriate match. We have had 184 applicants sign up to become a trainee. We are very pleased with this progress in a couple of months of existence.

We need employers to be business ready for a trainee and we guarantee a few changes to accommodate new staff will be worth it in the long term.

As we all discovered during Covid, there is a lot of information for businesses on line, including from the Employment New Zealand website

– Nick Leggett, CEO, Road Transport Forum

Forced change undemocratic

It has been a busy couple of weeks for the Road Transport Forum (RTF) as we work to keep up with the Government’s short consultation timeframes on major changes that will impact the road freight transport industry.

Even though we are a small organisation, we believe it is essential to keep up our democratic right to have a say on law, rule, regulation and policy changes that impact road freight operators.

This can involve conversations with Government Ministers and their officials in the government departments, written submissions (which go on our website), and appearing before Parliamentary select committees to have our say.

As the Government grapples with reducing emissions and decarbonising transport, as well as the infrastructure to facilitate that, there are a lot of documents we need to comment on.

Possibly the greatest existential threat to our industry sits in the 154 pages of Hīkina te Kohupara – Kia mauri ora ai te iwi Transport Emissions: Pathways to Net Zero by 2050. This is a Green Paper from by Ministry of Transport Te Manatū Waka (MoT). It suggests Government intervention in the supply chain to shift freight movement to their preferred modes – rail and coastal shipping – under the guise of a more efficient supply chain, leading to lower emissions.

What this means is the Government manipulating the market and removing choice.

We believe the Government is in no position to dictate how and when individuals and businesses choose to move their freight and household goods. Government officials do not have the expertise to examine payload efficiencies, nor should they be interfering in normal market forces that will inherently drive efficiencies.

We are an export driven economy and cannot afford to have freight costs forced up by the Government to price us off the international market.

Our industry would be looking at arbitrary, meaningless target setting, and implementing such control over transport operations involves draconian regulatory interventions.

This is a step back in time when we should be looking for smart, future solutions. It is increasingly frustrating that the Government would prefer to tinker with niche products and develop ideas that cannot be substantiated by evidence and good cost-benefit analyses, rather than talk to an informed industry that could offer tangible solutions for right now.

We are dealing with fundamentally flawed policy idealisms in the search for an unobtainable nirvana. The first step in reaching this nirvana would be to get the basic infrastructure right – roads, energy supply, and water. You only need to look at the number of groups and organisations that have been set up by Government to look at this to know infrastructure is a problem.

Nowhere is that more evident than in the plans of Let’s Get Wellington Moving.

We look at artist impressions of a Golden Mile without cars. Lambton Quay, presumably boosted by global warming to create the appropriate climate, has people sitting in cafes, cycling and walking – buses will be able to travel through but not cars or trucks.

Last Friday, a sewage spill covered part of Lambton Quay and ran into a stormwater drain. It smelled bad and covered a footpath. How nice would it be to cycle and walk through that, or sit sipping your coffee al fresco? It was Covid Level 2 and not very nice weather, so there was no one much around that day.

It was reported on Stuff at the time that Wellington’s wastewater pipes have an average age of 51 years, the second oldest of any city in New Zealand. Thirty-three percent of wastewater pipes in Wellington are in poor or very poor condition.

Next thing you know, there will be a spreadsheet where we are allocated times our households can use the toilet.

A lot of the solutions being put forward to meet emissions reductions are superficial window dressing and “green washing”. They don’t stack up to proper analysis.

There needs to be a reality check on the policy writers in both central and local government about just how their utopia is going to actually function and what it will cost ordinary people and businesses that drive the economy.

We would suggest there is no point in decorating the house before you’ve finished building it. And if you don’t build it to last, all you get are costs and headaches.

Next week we will share our submission on Infrastructure for a Better Future.

– Nick Leggett, CEO, Road Transport Forum

Road users aren’t getting what they pay for

Roads are the lifeblood of the economy. Trucks move 93 percent of New Zealand’s freight around New Zealand roads – goods for export, imports from wharves, and all the things that people need daily.

So, it is a concern to us that Waka Kotahi NZ Transport Agency is cutting its share of the local road maintenance programme, and that the Government is taking another look at the New Zealand Upgrade Programme.

Transport Minister Michael Wood has said: “Recognising the need to decarbonise our transport system, we’re rebalancing the package to increase investment in rail, public transport and walking and cycling”. 

This is against a backdrop of the Infrastructure Commission consulting on He Tūāpapa ki te Ora | Infrastructure for a Better Future – we will share our submission next week – and this week, a Parliamentary select committee looking at congestion charging motorists to use Auckland roads during peak traffic to try and ease up some of that flow.

Who should pay for the roads?

Motorists operate under a user-pays system, including trucks and private vehicles, contributing about $1.75 billion in road user charges to the National Land Transport Programme (NLTP). That used to go to roads. It has been expanded to fund others who don’t pay into it, including rail, walking and cycling. So, there is less money for roads.

That became a stark reality for many when the Government announced it would put up $780 million for a walking and cycling bridge across Auckland’s harbour.

We support user pays and we support congestion charging. But we want the user to get what they are paying for, not to have substandard roads while a few Auckland cyclists get a premium bridge.

The road freight industry is concerned about the unsafe state many roads are in. We have seen a lot of local government councils in the media recently saying cuts by Waka Kotahi NZ Transport Agency to funding its share of the local road maintenance programme is creating serious risks up and down the country.

Congestion charging has the potential to reduce traffic on Auckland motorways during the twice-a-day peaks. This would help the flow of freight as the cost of congestion and disruption to the supply chain as a result of congestion are serious issues. But the design of such systems is critical to their success and back-room costs can be alarmingly high. Their purpose should not be viewed as a means to reduce roading investment in critical network solutions.

A growing population, more freight, and sustained economic growth have significantly increased the demand for high capacity and quality roading. Our roading assets have been “sweated” more and are noticeably deteriorating in the eyes of most New Zealanders.

Increased demand of course means increased costs, but in the absence of a fair pricing mechanism, capital requirements for building, maintenance, and use will only continue to increase, without moderating demand.

We must be able to fairly and accurately price road use – and possibly other infrastructure – to both allocate costs and manage demand. Such an approach can be used to moderate private vehicle use, optimise efficient movement of freight, and increase public transport use and more physical travel such as cycling and walking. This will be an important tool in the fight to lower our nation’s carbon emissions.

The Transportation Research Board (TRB), part of the National Academies of Sciences, Engineering and Medicine in the United States, has stated the real opportunity to take action on climate change is to focus on the transport infrastructure. TRB recently warned that the USA’s crumbling transportation infrastructure must be rebuilt and modernised. More resilient infrastructure would lift recovery, create jobs, strengthen the economy, and fight climate change.

New Zealand needs to take note.

– Nick Leggett, CEO, Road Transport Forum

On your bike

On your bike, says this Government to New Zealanders.

Whether it’s the billion-dollar bike bridge across the harbour in Auckland (let’s face it, it will be over budget, or more likely, never delivered) announced last week, or the Climate Change Commission’s (CCC) roadmap released this week, the message from the State is clear: you will get out of your car and walk, bike, or use public transport.

Let’s start with the Boomer e-bike bridge to Birkenhead. Against a $6 billion cost blow-out – apparently as a result of Covid-19 – the Government announced it had to axe some of the NZ Upgrade Programme road projects. All of those projects are critical to the movement of freight, as well as road safety.

“Recognising the need to decarbonise our transport system, we’re rebalancing the package to increase investment in rail, public transport, walking and cycling,” said Transport Minister Michael Wood at the time.

It appears the Government did not read the room in making the decision to cater to a handful of cyclists with a fancy new bridge over, well, the rest of New Zealand with what New Zealanders who wouldn’t use the bike bridge believed were more worthy investments.

Ashburton Bridge had been closed that same week, cutting the eastern side of the South Island in half. Many other roads impacted by severe flooding in Canterbury cut off rural communities from lifeline supplies. Ashburton badly needs a replacement bridge, which would come in far cheaper than the Auckland cycle bridge.

Nurses were about to go on strike to try and get the government to acknowledge that they worked through the past year and a half in the most challenging circumstances of many people’s lifetimes so far, a global pandemic that has cut New Zealand off from the rest of the world.

Social media was flooded with criticism, some even from the cycle fraternity. And Mayors around the country expressed dismay as they watched their critical road projects put on hold, again.

What started in April 2017 as a $34 million cycle and walkway attached to the existing Auckland Harbour Bridge has become a $780 million, built from the ground up, dedicated walking and cycling bridge only, for an estimate of 5,000 users a day. International comparisons of cycle way use on similar bridges suggests this is an optimistic estimate.

I’m actually in favour of more cycling investment, however I don’t believe it should be prioritised over vehicles. If there is going to be a new Auckland Harbour Bridge, at such an eye-watering cost, let’s get one where buses and trucks are prioritised and a part of the existing bridge can be used for cycling and walking. 

It seems a folly to talk about the bike bridge as a tourist attraction when there is no indication of what year New Zealand will open its border. Even so, how would such an edifice set us apart internationally and draw tourists to our shores?

People are still digesting the Climate Change Commission’s roadmap but the message is clear – massive behaviour change will be mandated. Some of it reads like a work of fiction, anticipating a world dreamed up by people wishing to justify their own ideological agenda. 

Public transport will have lower fares, will be more frequent and reliable. Public transport has never been these things in New Zealand. Is some new player going to enter the market, wave a magic wand and miracle this up in the next nine years?

If you must use a car, it will be electric, and you should share it with strangers, or your fellow workers – your workplace should put on ride-share electric vehicle schemes. But really, you should be walking, cycling, or using public transport.

We strongly support decarbonisation, but our industry will be caught between a rock and a hard place with the rapid pace of change the commission is demanding. For heavy trucks, the diesel alternative vehicles are unproven, untested, and don’t exist at scale. It’s too early to box ourselves in with one solution. 

A few trucking companies are testing new technologies, but it is costing them money and it is smaller trucks, not the big trucks that actually are better for the environment because they can move more goods in one trip.

We can’t be forced into one undeveloped technology with no refueling infrastructure in New Zealand, which has such a range of terrain. It is good to see the CCC have moved away from suggesting all electrification of trucks and suggesting other fuel sources could be options.

Like many others, we are worried about a move to have New Zealand totally reliant on electricity when, like its public transport, the electricity network has capacity and reliability issues.

We would be happy with less cars on the road and less congestion because road freight transport is vital to New Zealand’s economy, moving 93 percent of goods. Without trucks, food supply, industry, and commerce in New Zealand would cease to be possible in today’s form.

The road ahead must be guided by evidence. We want everyone to keep an open mind about what might be possible, rather than try and force the freight industry down a set path that may not be the best one. Change this far out should be based on principle, not prescription.

– Nick Leggett, chief executive, Road Transport Forum

Disaster shows the value of trucks and roads

Once again, this week we saw the lengths truck drivers will go to, to get essential goods where they need to go.

Canterbury got to be the region of two halves when flooding compromised the Ashburton River-Hakatere Bridge, closing off State Highway 1 at Ashburton on Tuesday. The route was opened partially on Wednesday and mostly on Thursday, with restrictions. Overweight permitted trucks were not allowed on the bridge on Thursday.

The bridge was closed due to a slump at one pier and it is likely heavy vehicles will be impacted for at least a week while a repair strategy is developed.

RNZ spoke to truck driver who had taken the very long route from Dunedin to Christchurch via the mountainous Haast Pass and West Coast, on Tuesday night, and typically humble he said: “well we just have to get the job done”.

Truck drivers get a lot of grief from people who don’t understand their vital contribution to our quality of life and the New Zealand economy, but they are the first people to line up to help when there is a disaster.

They are problem solvers and just quietly deliver what needs to be delivered, door-to-door.

The Road Transport Forum’s role in an adverse event like this is to support the three associations working locally – Road Transport Association New Zealand, National Road Carriers, and NZ Trucking – to remove unnecessary barriers and co-ordinate media and requests for help.

It is not a simple case for heavy vehicles of driving an alternative route. They need to have the right permits and the road needs to be suitable. I know RTANZ did a lot of work with Waka Kotahi NZ Transport agency on suitable alternative routes for heavy transport and I’d like to thank all the associations for their work for their members.

The roads have fared badly, but so has rail, and with the lines washed out of commission for some time, road freight is even more essential.

The Government needs to look long and hard at New Zealand’s road infrastructure and understand its value to the economy and to ensuring every day life goes on for all New Zealanders. Unfortunately, it takes a disaster for the lights to go on in that regard. We have seen with the Covid-19 pandemic a whole new understanding of where things come from, via the supply chain, and who delivers them.

This morning the Government has made announcements on the fate of the transport projects in the New Zealand Upgrade Programme, impacted by Covid-19 apparently. The 24-kilometre highway from Ōtaki to north of Levin, costing more than $817 million, will be built as planned. Wellington’s Melling Interchange will go ahead at a higher cost, it is now estimated to cost $420 million, having been costed at $258 million a year ago.

This is great news, but unfortunately the Mill Road highway project in Auckland will not go ahead.

Using a 2040 projection of carbon emissions based on current CO2 emissions to justify killing Mill Road is disingenuous and suggests the Government has no confidence in decarbonising the private vehicle fleet. This will reduce public confidence in the Government’s stated aims in vehicle decarbonising.

Road and public transport should be equal priorities; not one over another.

And we were disappointed to see $685 million tagged for a new Auckland Harbour Bridge that will be for walking and cycling only. We are keen to see the cost-benefit analysis of this spend. It will clearly cost more than this and we think such a huge spend should go towards a new harbour crossing that is for all forms of transport, including the vital freight trucks.

Today’s announcement chucks some crumbs towards the future in terms of a Waitematā Harbour crossing (possibly a tunnel) for vehicles. It is good to hear public transport mentioned, as it will take vehicles off the road. However, we needed stronger long-term assurances and a real plan for freight movement in New Zealand into the future.

The announcement on a walking and cycling Auckland Harbour Bridge is really putting the cart before the horse. Mass transit and freight should be the priority for transport investment, not bikes and walking which could be accommodated by smart use of existing infrastructure. 

New Zealand’s road network is in serious decline. Go to any region and people will tell you how bad the roads are and that maintenance has been ignored for years. As the bills ramp up to try and keep the roads we have got, there also needs to be money for new and better roads. This is why we cannot understand money being taken from road funding and given to rail.

There will now be a massive bill in Canterbury to repair the network of roads washed out and severely damaged in this weather event. That work has to be done to ensure the flow of primary products off our farms and to our export markets, as well as to cost effectively move all the goods for the domestic market.

Instead of running down the value of roads in New Zealand, we would like to see the Government recognise their importance to any modern economy, most particularly one that relies heavily on trade.

– Nick Leggett, chief executive, Road Transport Forum

Road safety left behind in Budget rail spend

In last week’s Budget 2021, the Government delivered $1.3 billion to rail, to build trains and boost freight capacity.

I always like to take a bit of time to digest the annual Budget and have a good look at where the money is going. It takes time to get past the headlines – in 2020 the $12 billion for infrastructure projects was announced, with $5.3 billion for roads. But 2020 was also the first year of Covid – with a few more to follow it seems – where nothing much at all got done. Truck drivers and operators tell us the roads are still in a pretty dire state.

It is the Road Transport Forum’s view that any rail spend should go into the area where there is some impact, passenger rail in our major cities. This could ease congestion at peak times by taking cars off the roads.

There is a case for some spend to move freight between the Auckland and Tauranga ports by rail, particularly given the supply chain issues we’ve seen in the past year, which look set to continue for some years yet.

But we also believe money should not be wasted on trying to revive rail freight in areas where it didn’t work before, and won’t work again. As the world tries to recover from the impacts of Covid-19 for years to come, we should be looking forward, not to some “good old days” in Dunedin’s history where they built trains at the Hillside Workshops. Or, on the Wairoa to Napier line where there have been derailments that leave the line unusable for days and trucks have to be brought in to move the freight.

It is particularly disappointing to see in the Budget “new” money, more going to the Prime Minister and Cabinet’s department ($40.215 million) than the New Zealand Police ($33.463 million). Outside of Wellington, most New Zealanders have probably never heard of the Department of Prime Minister and Cabinet. It used to be a small group of experts advising, as the title suggests, the Prime Minister and their Cabinet. Now, with every issue requiring a massive amount of outside consultation from highly paid private sector experts, including the Covid-19 vaccine rollout and border management, many dollars are being spent. The Government has a whole public service to seek advice from. But in addition to the tens of thousands of public servants, they are now paying for more advice.

This is at the expense of things we think are pretty important, like road safety, which has had a $63 million cut in funds, RNZ reported this week.

From where we are sitting, the roads are getting less safe because less money is being spent on the actual engineering and surface of them. They are less safe, and there will be less policing. This feels a bit like Napier MP Stuart Nash saying unless you’re a gang member you have no reason to feel unsafe in Hawke’s Bay because the public are not the gang’s targets, while National MP Simeon Brown is allegedly receiving death threats from those same gang members.

The reality is, no amount of spending on rail will reverse international trends away from rail freight to road, or budge the 93 percent of freight moved by road in New Zealand. Trucks will still be needed to deliver goods to and from trains, and to unload them when they derail, or get stuck in tunnels.

Customers through the supply chain want their goods delivered door-to-door, as fast as possible and those demands are only increasing.

We want to see some of that spending on roads happen. We pay for the roads we use and they need to be safe and suitable for the tasks they are used for.

The Government’s solution of propping up rail at the expense of roads and slowing down road speeds in the name of safety because the roads themselves are actually unsafe, will not see any economic, or environmental, gains for New Zealand.

– Nick Leggett, chief executive, Road Transport Forum

A clear view of the road ahead

If you are not reading the tea leaves the Government are steeping then let me be clear, employers are facing some big challenges and our industry is going to have to make some changes.

Government policies are focused on training New Zealanders for employment before migrants, vastly restricting the number and “skills” of migrants, and ensuring higher pay and better conditions for employees. That’s before we even get to the environmental imperatives.

The employment landscape has also changed. It seems everyone wants to start as the boss, on the boss’s salary. With low unemployment and greater expectations, young people in the workforce are shopping around for the best deals and future prospects. They want work-life balance, qualifications, and recognition for doing well.

This groundswell is gathering momentum and if employers in road freight transport turn their backs on it, they will struggle to survive.

The average age of a truck driver today is 54. We need to be thinking about bringing through our future workforce, and the workforce behind that, and so on. We can’t do that if we just truck on the way we always have.

The Road Transport Forum (RTF) has been preparing for the changing landscape and last month, we formally launched the industry’s training programme, Te ara ki tua Road to success. We have worked with a number of government agencies to get this off the ground and got endorsement at the launch event from two Cabinet Ministers – Social Development and Employment Minister Carmel Sepuloni and Transport and Workplace Relations and Safety Minister Michael Wood.

Government wants to see industries sorting their own issues, but they are also supportive of such moves.

I guess it’s just the New Zealand tall poppy syndrome, but it is disappointing when every positive step is met with derision by some in the industry. Road to success pays people while they train and earn recognised qualifications, and we opted to better the minimum wage with a liveable wage. Some people in the industry object to paying $21.50 an hour to secure their future workforce. The optics of that are not good.

The vitriol on social media platforms about truck driver wages and working conditions should be sounding warning bells and certainly don’t help to promote truck driving as a career choice for a new young and diverse cohort – at least only older people use Facebook.

The race to the bottom just makes the RTF’s role advocating for the best possible conditions for the road freight transport industry more difficult. But we operate on support from a coalition of the willing. Those who can see what’s ahead, rather than what’s in the rearview mirror, understand we need to show the Government and prospective employees a willingness to change.

We know we need to focus on more than just training. We need a safe and compliant industry focused on the future and ready for changes and challenges, the greatest of which will probably centre around carbon neutral goals. We think industry should work on solving its own issues rather than waiting for the big hand of government to direct terms and conditions.

That is why the RTF is working on developing a way the industry could be covered by an accord that meets the government’s requirements and makes the industry safe, compliant and attractive now, and into the future, for those young people looking for their next career move.

Let’s look forward as we consolidate our great industry transporting all the goods New Zealanders need.

– Nick Leggett, CEO, Road Transport Forum