14 minute read
Transporting New Zealand
Smaller businesses, including transport companies, rely on being paid for their services within a reasonable timeframe
Balance of power shifting in the economy
by Nick Leggett Chief Executive
La Ara Aotearoa Transporting New Zealand
FIRSTLY, LET ME SAY HOW EXCITED
I am by the rebranding of the Road Transport Forum into Ia Ara Aotearoa Transporting New Zealand.
Replacing the tired RTF brand with Ia Ara Aotearoa Transporting New Zealand is about conveying what the industry does for the public and business in NZ – transporting their goods, to their door, when they need them; or their food, medicines and other essentials to the stores they shop at, so it is always there when they want it.
You can read more about our new brand on Page 43 – as well as how it fits with where I see that the country needs to head to overcome this pandemic.
Taking a look at other recent events that will impact our industry, I am delighted with the recent passing of the Fair Trading Amendment Bill into law. A lot of hard work went into this behind the scenes, starting with former RTF CEO Ken Shirley, who successfully lobbied then Small Business Minister Stuart Nash to look into the practice of unilateral deferred payments that were becoming an issue for smaller operators in our industry.
Transporters working for big players in the primary sector were forced to accept 60-90-day payment terms. If they didn’t, they would lose the business – and that threatened their livelihoods. Terms such as these have a major impact on many small NZ businesses, including those that make up a chunk of road freight transport.
Typically, small businesses are not flush with cash and it is therefore critical that they are paid for their services within a reasonable timeframe. We lobbied for extending the provisions of the Fair Trading Act as a simple solution for dealing with this.
We had argued for a contract threshold of $500,000 because in our industry, despite being small businesses themselves, many operators take on large contracts. Unfortunately, we didn’t win that one, but we feel we have won the war.
The Bill targets the use of pressure tactics, deception, one-
sided contract terms and practices that exploit the vulnerabilities of a consumer or small business. It adds to the existing protections put in place under the Fair Trading Act 1986 by: • Prohibiting unconscionable conduct in trade. • Extending unfair contract term protections to include small trade contracts worth $250,000 a year or less. • Legally empowering consumers and businesses to demand uninvited sellers, such as door-to-door salespeople, to leave their property, including through the use of ‘do not knock’ stickers. • Businesses that are found to act unconscionably – using practices that go beyond what can be deemed commercially necessary – will face fines of up to $600,000.
Looking at the overall state of the economy at the moment, one of the biggest issues on the horizon is the growing rate of inflation and the associated increases in living costs. This is not good news, and many who weren’t around in the 1970s and 1980s, when inflation rates peaked above 12%, have no experience in dealing with this economic hit, particularly in an overheated property market.
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%, up from 1.5% 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, the return of lockdowns, our small size as an international market, and our distant location from any other market, NZ 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% in the first quarter of this year.
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 make sure your business practices and structures are 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, longterm relationships matter, and 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 release of the Commerce Commission’s draft report into competition in the retail grocery sector. It found that the duopoly of Woolworths NZ and Foodstuffs, without real competition, is able to exercise its buying power to push excess risks, costs and uncertainty onto suppliers. That can ruin small businesses. It’s the supermarkets’ way or the highway, and transport operators have been caught up in that.
I am hoping this report will lead to suppliers having more power, especially when you consider they’re the ones who have kept the country running smoothly over the period since COVID-19 first reared its head in NZ.
Some of the real heroes of the pandemic have been the farmers, growers, labourers, truck drivers, logistics workers etc, who ensured that the food, medicines and other essentials got to those who needed them. The supermarkets were praised for staying open and allowing everyone to buy the essentials, but in reality they were just the last piece in the puzzle, and often the ones who enforced harsh terms and conditions on their suppliers.
COVID-19 and the lockdowns are causing ongoing issues with limited supply of people and equipment, and I’ve heard that some established carriers can’t fulfil some of their longterm contracts. This presents the opportunity for operators to use their own networks and technology to 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 longterm, the rocky road ahead may, in fact, provide a better path to a sustainable business for many transport operators. T&D
The Commerce Commission found that Woolworths NZ and Foodstuffs use their buying power to unfairly disadvantage suppliers
“Fruit” by Like_the_Grand_Canyon is licensed under CC BY-NC 2.0
New brand and new future for our industry
“OUT WITH THE OLD AND IN WITH THE NEW,”
is how chief executive Nick Leggett describes the rebranding of the industry’s leading advocacy organsation – from the Road Transport Forum to Ia Ara Aotearoa Transporting New Zealand.
“In 2019, we did extensive research on what road freight transport means to NZers and how they view the service the industry provides, the vehicles we use and the people involved in freight and logistics,” says Leggett.
“Encouragingly, NZers have a generally favourable view of trucks and understand their critical role in the economy.
“We feel Transporting New Zealand far better reflects how people perceive our industry, the fact that road transport is a significant contributor to growth in the economy, and having the verb ‘transporting’ in the name shows the action and movement that are part of our 24/7 operations.”
The new logo has been designed so that the arrows represent the North Island and South Island and the vital road links within and between them.
Ia Ara Aotearoa can be translated as “each and every road of Aotearoa.” The word “Ia” is also translated as a vessel or vein – likening the vehicles used to transport the “goods” to the very important role of the veins of a human body.
“Ia” can also mean to flow, like the flow of movement of a river – again, similar to the flow of freight around the country.
As Leggett explains, Transporting New Zealand had hoped to show off the rebrand at a launch event organised at Parliament, but this was cancelled due to the latest COVID-19 lockdown.
“Unfortunately, COVID-19 has little respect for events and it was just too hard in such an uncertain climate to reschedule.
“Regardless, we know that Ia Ara Aotearoa Transporting New Zealand will be a brand that reflects a modern, forward-looking industry that is, every day, taking on its challenges; whether that be operating during lockdown, navigating our inadequate roading network, or consistently delivering the goods on time.”
Right now, says Leggett, it is hard to consider any future without COVID-19 as a major part of it. NZ, he adds, “must start building up our psychological, physical, social and economic resilience to live with it.
“COVID-19, whether it’s Delta or other future strains, is not going away. NZ may get back to a situation where we have no community cases but in the medium to long term, the world will never eliminate it and most other developed countries have accepted that.
“The slow nature of the vaccine rollout and the lack of planning and preparation in our health system has left us pretty badly exposed, hence Level 4. However, lockdowns are not a sustainable method of control. We must vaccinate, vaccinate, vaccinate – and look to provide boosters when we need to. We cannot as a country stay closed forever and we need to do a lot more to protect ourselves for when we do open up.
“A big thankyou to all the essential workers in our industry who have kept the freight moving over the last month or so. We all owe you a big pat on the back,” Leggett concludes.
Finally, there’s been another casualty of the current Delta incursion – The Road Ahead: Transporting New Zealand Conference.
Says Leggett: “With so much unpredicatability surrounding what the alert levels may be in different parts of the country the Transporting New Zealand board was forced to make a call in order to provide the industry, event hosts and event providers with some certainty. Registered delegates will be contacted by Transporting New Zealand.” T&D
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Cobham Drive and the ASB Sport Centre, just west of Wellington Airport
“2015_05_17_ewr-lax-akl-wlg_100” by dsearls is licensed under CC BY 2.0
Let’s Get Wellington Moving gets it
wrong…again!
THE ROAD FREIGHT INDUSTRY JOINS OTHER
key economic sectors in wanting to keep the country moving, and can’t see any justification for the Let’s Get Wellington Moving (LGWM) proposal for a pedestrian crossing on the State Highway 1 route to and from Wellington airport.
“Stopping traffic on such a vital route to make life easier for a handful of people who might want to cross this road where they don’t need to is a ludicrous idea,” says Transporting New Zealand chief executive Nick Leggett.
“This will significantly disadvantage the 35,000 vehicles, commuters, travellers and businesses that use this road every day”
“Cobham Drive is our main state highway and the only viable route to Wellington’s airport. We don’t want to see time added to that journey without strong evidence, which is currently missing in action.”
The proposal for the crossing – to access the ASB Sports Centre – has met with strong opposition from business and community groups. An independent poll of residents in Wellington’s eastern suburbs shows they overwhelmingly oppose the pedestrian crossing, with 83% believing the proposed crossing will make congestion worse.
“We have seen no cost-benefit analyses to underpin this crossing and it’s about time Let’s Get Wellington Moving started listening, because this will not only affect businesses, it will also affect thousands of local residents,” says Leggett.
“A controlled pedestrian crossing on an already-congested road will result in traffic being slowed to a stop when the lights are red, and to a crawl to get over the raised crossing.”
LGWM is a joint initiative between Wellington City Council, Greater Wellington Regional Council and Waka Kotahi to develop a better transport system for the capital. It has so far been an unmitigated failure, according to Leggett.
“I’ve said before, Let’s Get Wellington Moving is a misnomer and to get things moving, we’ve got to stop slowing things down.”
Traffic congestion in Wellington and Auckland is growing day by day, yet local and central government seem hellbent on slowing traffic through cities and pandering to minority fringe interests, says Leggett.
“Transporting New Zealand believes all road users need to operate in an environment where road safety, the impacts of transport on our environment and the transport of goods by road can co-exist.
“What is concerning is that LGWM talk but they don’t listen. They can’t produce sufficient evidence to substantiate significant changes to the roading network that favour cyclists and pedestrians over motorists, and yet spend vast amounts of ratepayer and taxpayer dollars doing so,” says Leggett.
“This kind of thinking is becoming commonplace, with the Government’s ‘bridge to nowhere’ cycleway in Auckland also shown
to be a costly folly.
“The whole country is struggling right now – the lockdown in August coming just as things appeared to be getting back to normal – and yet there are decisionmakers who think spending $785million on a vanity project like this is warranted.”
Leggett says solutions to the issues and opportunities that COVID19 has thrown up lie in the knowledge and expertise held by NZ’s businesses, rather than its bureaucracy.
“COVID-19 has highlighted a critical need for better understanding by Government and its officials about how the global supply chain works and how that flows through to moving goods into, out of, and around NZ.
“Our economy is driven by exports and imports – goods that need to get where they are going as efficiently and cost-effectively as possible, given how far away we are from the rest of the world.
“This is a well-oiled, logistics-driven machine, and Government could learn a lot from the businesses involved. They only have to open the door and ask.” T&D
Ia Ara Aotearoa – Transporting New Zealand was established in 1997 to represent the combined interests of all members as a single organisation at a national level. Members of Ia Ara Aotearoa – Transporting New Zealand’s regionally focused member associations are automatically affiliated to Transporting New Zealand.
Ia Ara Aotearoa – Transporting New Zealand PO Box 1778, Wellington 04 472 3877 forum@rtf.nz www.rtfnz.co.nz Nick Leggett, Chief Executive 04 472 3877 021 248 2175 nick@rtf.nz National Road Carriers (NRC) PO Box 12-100, Penrose, Auckland 0800 686 777 09 622 2529 (Fax) enquiries@natroad.nz www.natroad.co.nz James Smith, Chief Operating Officer 09 636 2951 021 667 131 james.smith@natroad.co.nz Paula Rogers, Commercial Transport Specialist 09 636 2957 021 771 951 paula.rogers@natroad.nz Jason Heather, Commercial Transport Specialist 09 636 2950 021 771 946 jason.heather@natroad.nz Steve Chapple, Commercial Transport Specialist – Lower NI. 027 244 9557 steve.chapple@natroad.nz Ian Roberts, Commercial Transport Specialist – Waikato/Bay of Plenty 021 193 3555 Ian.roberts@natroad.nz Road Transport Association of NZ (RTANZ) National Office, PO Box 7392, Christchurch 8240 03 366 9854 admin@rtanz.co.nz www.rtanz.co.nz Simon Carson, Chief Operating Officer 027 556 6099 scarson@rtanz.co.nz Northland/Auckland/Waikato/ Thames-Coromandel/Bay of Plenty/North Taupo/King Country Contact RTANZ Christchurch head office for assistance 03 3669854 South Taupo/Turangi/Gisborne/Taranaki/ Manawatu/Horowhenua/Wellington Sandy Walker, Senior Industry Advisor 027 485 6038 swalker@rtanz.co.nz Northern West Coast/Nelson/Marlborough/ North Canterbury/West Coast John Bond, Senior Industry Advisor 027 444 8136 jbond@rtanz.co.nz Otago Southland, South Canterbury , Mid Canterbury Contact RTANZ Christchurch head office for assistance 03 3669854 NZ Trucking Association (NZTA) PO Box 16905, Hornby, Christchurch 8441 0800 338 338 03 349 0135 (Fax) info@nztruckingassn.co.nz www.nztruckingassn.co.nz David Boyce, Chief Executive 03 344 6257 021 754 137 dave.boyce@nztruckingassn.co.nz Carol McGeady, Executive Officer 03 349 8070 021 252 7252 carol.mcgeady@nztruckingassn.co.nz
Women in Road Transport (WiRT) www.rtfnz.co.nz/womeninroadtransport wirtnz@gmail.com
