Logistics & Transport nz $15.00
THE OFFICIAL PUBLICATION OF CILT NEW ZEALAND
Volume 20 Issue 4 June 2022
New Zealand's first national freight and supply chain strategy Budget 2022: Money, money, money Embracing agile ecosystem through digital transformation
ON THE COVER
LOGISTICS & TRANSPORT NZ IS THE OFFICIAL JOURNAL OF THE CHARTERED INSTITUTE OF LOGISTICS & TRANSPORT NZ
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New Zealand’s largest port, Port of Tauranga, is preparing for the next stage of cargo growth with an extension of its container wharves by converting existing port land into an additional berth. Photo: Port of Tauranga
Contents Presentation of 2021 awards.............................................................................................................3 New Zealand‘s first national freight and supply chain strategy: a lot of work to do! ......5 Driving down emissions....................................................................................................................7 Embracing agile ecosystem through digital transformation.................................................... 9 Cartel activity is illegal.....................................................................................................................11 Budget 2022: Money, money, money............................................................................................ 12
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Independent review of Road to Zero road safety investment released.............................. 13 New Zealand’s port for the future................................................................................................ 14 Sustainable supply chains and the drive to implement a green last mile ..........................16 Buses are boring, but …................................................................................................................... 17 Eastland Port’s Wharf 7 rebuild ready to get underway..........................................................19 Auckland Transport’s advanced analytics to promote public safety.................................. 20 In the next edition
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The editorial team welcomes expressions of interest for submitting an article for the September 2022 edition of this journal, especially from young professionals (those under the age of 35). Contributors should in the first instance contact the editorial convenor, Murray King (email murray.king@xtra.co.nz) to discuss their article. Deadline for the September 2022 edition: August 3 2022.
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June 2022
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Former Port of Tauranga Chief Executive Mark Cairns (centre) has been honoured with the Sir Bob Owens Award for his outstanding contribution to the sector, pictured with Waikato and Bay of Plenty CILT Chair David Stewart (left) and and CILT National President Keith Robinson. Photo: Chris Parker
Presentation of 2021 awards PRESENTING the annual awards for 2021 has provided the Chartered Institute of Logistics and Transport with some complex challenges. Firstly, the annual dinner planned for October in Wellington and hosted by the Central Section had to be postponed, much to the regret of all of us, the Section team, and sponsor Ken Harris of ContainerCo. Then it became clear that the replacement dinner planned for March 2022 would also not go ahead, so the NZ Council decided that awards would be presented locally at Section meetings. But the continuing COVID19 restrictions delayed these events. I am delighted to report that four awards have now been presented to some very delighted and astonished recipients. The presentation for the MITO / CILT scholarship was first off the rank. Winner Kaine Sparham from C3 had no idea he had won this award, when invited to a meeting at C3 premises in Timaru. Awards convenor, Fiona Knight, was present by Zoom from Wellington to give to a rather puzzled Kaine the good news. When applying for the scholarship, Kaine advised that having completed the New Zealand Certificate in Port Operations (Cargo
Handling) in 2020, he was keen to undertake business and management training. The judges agreed such training would be an asset to someone who had two years working as on operations supervisor with a diverse group of staff and colleagues.
Sir Bob Owens Award Former Port of Tauranga Chief Executive Mark Cairns has been honoured with the Sir Bob Owens Award for his outstanding contribution to the sector. Mark retired from the Port in June 2021 after 16 years at its helm. Waikato and Bay of Plenty Chair David Stewart said the award criteria included a nominee’s altruistic qualities. “There is no question that Mark has made an outstanding contribution to the industry. He is widely recognised as an industry statesman who, despite considerable personal success, takes huge pride in his people,” said David. “As well as leading a financially sound business, it is the Port of Tauranga people that Mark has identified as making him most proud. Mark never missed an opportunity to recognise and credit his team.” During Mark’s tenure, Port of Tauranga’s total cargo volumes doubled, and container
BY FIONA KNIGHT AND ROCHELLE LOCKLEY numbers nearly trebled. Contributing to the significant growth was a six year capital expansion programme to grow the port into an international transhipment hub. He also instigated long-term relationships with large exporters including Oji Fibre Solutions, Kotahi and Zespri. Mark instilled a strong social responsibility within the port, and prioritised health and safety over profitability. David’s sentiments were echoed in the award nomination by Managing Director of Mainfreight, Don Braid: “He has helped to create a world-class port and transformed what was really just a regional port into New Zealand’s premier port.” Craigs Investment Partners Head of Private Wealth Mark Lister said: “Port of Tauranga is one of the highest quality businesses on the sharemarket.” Since departing Port of Tauranga, Mark has taken up a governance career and is the Chair of Freightways Express Limited as well as a Director of Meridian Energy, Auckland Airport and Sanford Limited.
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Ben Johnston, right, receives his award from Jan Augustyn, General Manager Business Performance Improvement at logistics company C3 on behalf of the CILT. Photo: KiwiRail
The Sir Bob Owens Award is the premier award of the Chartered Institute of Logistics and Transport and is named after Sir Bob, a shipping industry stalwart, former Tauranga mayor and respected businessman.
Rising Star The Rising Star award is designed for younger people still working their way into the management chain. Key attributes are demonstrating excellence on the job, ethics and values, mentoring peers and going that extra mile. The award is sponsored by DRD Consulting who commit to the encouragement and recognition of achievement in the next generation. The winner, Michaela McClintock of C3 in Picton, demonstrated all the knowledge and skills required in the awards criteria and more. The referees consistently spoke of her high level of knowledge, positive can-do attitude, excellent communications with a range of clients (also corroborated by clients) and colleagues at all levels, assisting and training staff, and colleagues, and leading by example in health and safety matters. Her former manager, Arthur Hackett, commented “people like Michaela do not come along every day”. With the covid restrictions, the presentation was restricted to a Zoom session, with the various referees for the nomination attending as well as Michael’s mother and partner, and Robin Dunlop the sponsor. Who would have thought a Zoom presentation of an award could be such fun? Robin “handed over” a copy of the certificate while Michaela “received” one, all online. All
Maureen McClenaghan of MITO presented Kaine Sparham his MITO / CILT scholarship.
attendees took the opportunity to speak and celebrate Michaela’s significant achievements.
Young Achiever Ben Johnston got quite a shock when he arrived for a catch-up meeting with colleagues at KiwiRail. He was presented with CILT NZ’s Young Achiever award for 2021 by Jan Augustyn of C3, representing the sponsor of the award as well as the judging panel. Ben did not even know he had been nominated by his mentor and manager, Helen Rogers, Group Manager Government Relations, Policy and Funding, or that the nomination was seconded by the colleagues he worked with on two major projects. Ben’s submission stood out to the judges due to his accomplishments in being a Programme and Project Lead in two of the largest KiwiRail projects – the Future of Rail Review and the Rail Network Investment Programme. Both are significant “once in a generation” initiatives that will make a significant difference in KiwiRail for the future. The judges noted Ben’s maturity and ability to work with people on all levels and over multiple industries to achieve project goals. The judges also noted that Ben was one of the founding members of KiwiRail’s internal young professional’s network. Readers may recall Ben contributed an article to our September 2021 issue. When presenting the award at KiwiRail, Jan explained how with such achievements: “it made sense for us judges to bestow on Ben the Young Achiever award for his demonstrated leadership and organisational skills. I am pleased to advise also that Ben is our youngest Young Achiever to date.”
Rising Star recipient Michaela McClintock.
To Ben’s delight, he not only received a certificate but also money towards further training and development. CILT NZ would like to acknowledge the generous sponsorship of C3 for this award. C3 forms a vital part of the NZ logistics and supply chain environment with logistics, stevedoring and marshalling services across the country in twelve different Ports. C3 offered to sponsor as they appreciate and would like to recognise individuals who are actively and successfully involved in the day-to-day operation and development of transport and/ or logistics within New Zealand. The venue for the Annual Awards Dinner 2022 has been confirmed for 14 October 2022, held at Te Pae Christchurch Convention Centre. For more information, visit https://bit. ly/3MAb8yI.
June 2022
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Te Manatu- Waka The Ministry of Transport knows that there are longer term supply chain issues which government has a role in addressing, and that is why the Ministry has been progressing a national freight and supply chain strategy. Photos: Stock images
New Zealand‘s first national freight and supply chain strategy: a lot of work to do! BY HARRIET SHELTON AND LIAM FECHNEY
IT FEELS SLIGHTLY LIKE déjà vu one year after my last article on supply chain congestion: ships are still queuing outside congested ports, container yards are at or over capacity, and transport and storage costs are still surging. While specific challenges are continually changing as congestion hotspots around the world pop up and down, I think a key difference from 2021 is a greater understanding of the global system’s vulnerabilities amongst freight and supply chain participants. Many of the companies we regularly talk to are reviewing their sourcing, shipping early in anticipation of delays, and holding higher inventory to deal with disruption. In last year’s article, this was exactly the sort of short- and medium-term planning that I said would, and should be, market led, and to date it largely has been. But we know that there are longer term issues which government has a role in addressing, and that is why the Te Manatu- Waka Ministry of Transport has been progressing a national freight and supply chain strategy. On April 20 this year, we released a paper presenting a view of supply chain issues and opportunities for public consultation. Over the next few months, we will continue to engage with stakeholders and our Treaty partners through focus groups and workshops to identify
ideas and options that will set the freight sector and supply chain up for success over a 30-year horizon. This work will culminate in a draft strategy, the first version of which will be ready for the Minister of Transport and Cabinet to consider around the end of this year. The feedback we have received so far has been generally positive. We are seeing a wide span of perspectives about how involved government should be in the supply chain system, ranging from laissez-faire (free market) to a more interventionist approach. Our view is that the Government’s role lies somewhere in between. We have a key role to play as a regulator, as an investor in infrastructure, and in representing the broader public interest. An important aim of the national freight and supply chain strategy is to produce a shared system-wide view and to introduce a wider context, within which individual companies will be able to continue making decisions that are good for them and also good for the country. Our four focus areas are reducing emissions, productivity, resilience, and equity and safety. Given that many of the issues we are examining through the strategy are of national and global importance, failing to take a whole-of-system approach would risk locking in suboptimal transport investment.
Even if the Government’s only role was to fund major infrastructure works, we would still need a nationwide strategy to tell us where they should be located to deliver benefits to the entire country, and to allow businesses to plan their own investment efficiently around the future transport network. One of the key challenges identified in the issues paper is how to lower emissions from the freight transport sector in order to avoid the worst impacts of climate change. The recently released SeaRise tool highlights the importance of shifting our transport sector to net zero emissions by 2050, with key transport infrastructure such as our ports facing acute effects of sea level rise in the not-too-distant future. Our engagement to date with stakeholders and the public through the strategy work and Emissions Reduction Plan (ERP) consultation has highlighted widespread ambition for more action and for urgent progress on decarbonising the transport sector including heavy freight. The change in the sector will have to be dramatic because the consequences of doing too little or nothing will be even more pronounced.
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Achieving the ERP target of reducing freight emissions by 35 per cent by 2035 will take a coordinated effort across the sector combining infrastructure provision, regulation, and driving operational change within the industry. Government action alone cannot achieve the emissions reductions necessary, but we are developing tools to help support freight sector businesses in the transition to net zero by 2050. We will keep working on the commercial availability of zero emission medium and heavy trucks, investment in restoring the national rail network, and investment in the coastal shipping sector. These are all opportunities to reduce the emissions intensity of our current transport network and we’re keen to work with industry to understand how the transport network could evolve to further reduce its emissions. As a small remote country at the very end of international supply chains, we know that New Zealand businesses need to be highly productive and innovative to compete on the international stage. However, as our issues paper outlines, our relatively low labour productivity and a lack of robust data collection and sharing across our supply chains can hamper the ability of many local companies to be internationally competitive. Skills and labour shortages, variable productivity and an ageing workforce are not unique to the freight industry, so these issues may need to be tackled in conjunction with other sectors. Automation brings opportunities, even alleviating some labour supply issues, but could also create a threat to existing workforces if not well managed. While choices about workforce composition, renumeration and development will always fall mostly to the market, government does need to ensure that our regulations and funding of work training programmes are fit for purpose in the context of a changing work environment. Improving data availability and consistency across our supply chains has real potential to reduce uncertainty, increase the flexibility to choose between different freight operators and modes, and simplify regulatory compliance. There is a role for government, in partnership with industry, to set data standards that allow different information systems to talk to each other seamlessly, which would facilitate the data availability that would otherwise take significant time to develop organically. Over the past few years, we have seen the impacts of a freight system with very little slack in the face of disruption. Very few people would have predicted a global pandemic three years ago, yet the consequences have been enormous and much more significant than anyone expected
at the outset. It highlights the importance of considering more than just the “expected and understood” events like natural disasters when we examine supply chain disruption. The national freight and supply chain strategy is deliberately taking a long-term systems view, rather than being a response to the pandemic specifically. It has been well-documented that the nature of very lean, “just-in-time” supply chains means they are more vulnerable to disruption. The public expectation is that critical goods, such as food and medicine, should always have reliable supply at a reasonable cost. We need to explore how this resilience can be built in, given that supply chains are not homogenous and there is no single silver bullet. There is a price to pay for resilience and response, whether that is the costs of disruption or the costs of building in greater resilience (through infrastructure, inventory, etc). We also want to work towards a system where every person in the transport sector, whether they are a stevedore, a truck driver, or a logistics manager, is safe at work and is part of a productive and valued workforce. We also need to ensure that every business and person can access the freight opportunities they need in order to thrive. As highlighted by recent events at the ports, and the Road to Zero work across transport agencies, New Zealand has a long way to go when it comes to minimising harm in the transport system. It needs to be a collective effort.
New Zealand’s first ever freight and supply chain strategy will be an opportunity to set ourselves up for the future so we are ready to capitalise on whatever changes are round the corner. We’re looking forward to working closely with industry, academics, logistics professionals, and the public as we develop the draft strategy throughout the rest of this year.
Harriet Shelton
Harriet has worked in transport planning and policy for over 20 years, mostly within local government, and recently made the move to central government. In her current role at the Ministry of Transport, Harriet leads a policy team focussing on strategic freight and supply chain issues including rail, ports, and shipping.
Accessing freight is also an important consideration. Many of our primary industries are located rurally, with limited access to different freight modes, routes and even operators. There may be opportunities to provide smarter options, especially in regions which have historically faced underinvestment in transport. We want to pay particular attention to regional economic development and to explore with our Treaty partners the ways in which the freight system can better support the Ma- ori economy to develop and flourish. The issues paper is very much a starting point for the work we are doing on the strategy; its aim is to provoke discussion. There are many complex issues to tackle, some of which might not be front of mind right now but will become more important in the future, and so we need to start preparing now. We believe there are many things we can do in the medium and longer term to ensure that New Zealand is better positioned for the future. Moving to a lower emissions freight sector will most likely make us more resilient and productive as well. Addressing safety could also improve productivity and efficiency.
Liam Fechney
After completing a Bachelor of Commerce in Management at the University of Canterbury, Liam briefly worked in supply chain management for an international SME before joining the supply chain team at the Ministry of Transport. He was involved in the transport COVID-19 response, monitoring and responding to supply chain congestion issues, and is currently working on the productivity workstream of the strategy.
June 2022
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Unsurprisingly, the Emissions Reduction Plan - released on May 16 - requires actions across every sector of the economy including transport, energy and industry, building and construction, agriculture, forestry, waste and fluorinated gases. Photo: Ministry for the Environment
Driving down emissions CLIMATE CHANGE INITIATIVES ANNOUNCED IN MAY ARE A CRITICAL PART OF THE EMISSIONS REDUCTION PLAN (ERP) THAT WILL PUT AOTEAROA ON THE PATH TO NET ZERO. BY JAMES PAUL RELEASED May 16, the ERP1 was dubbed by Finance Minister Hon Grant Robertson as the most the significant day in New Zealand’s journey to combat climate change. The Climate Change Minister, Hon James Shaw, said the plan “means our net-zero future is closer than ever before”. Titled Towards a productive, sustainable and inclusive economy, the ERP contains more than 300 actions to help New Zealand reduce its impact on the climate and enable the country to meet its first emissions budget. An emissions budget is a total quantity of emissions that is allowed to be released during an emissions budget period. These actions will be financed by the ERP’s creation of a $4.5 billion Climate Emergency Response Fund (CERF). The CERF will recycle revenues from the Emissions Trading Scheme 1
(ETS). Each emissions budget covers a period of five years (except the first emissions budget which covers the period 2022-2025), and will act as interim targets to reaching our 2050 emissions reduction targets. Cabinet agreed that the first three emissions budgets will be: • Emissions Budget 1 (2022–2025): 290 megatonnes of carbon dioxide equivalent greenhouse gasses (72.4 megatonnes per year); • Emissions Budget 2 (2026–2030): 305 megatones (averages 61 megatonnes per year) [in principle]; and • Emissions Budget 3 (2031–2035): 240 megatonnes (48 megatonnes per year) [in principle].
https://environment.govt.nz/assets/publications/Files/Aotearoa-New-Zealands-first-emissions-reduction-plan-Table-of-actions.pdf
The first emissions budget equates to two megatonnes per year less than the five-year average leading up to this point (2017-2021), and 3.1 megatonnes less than projected emissions for 2022 to 2025. New Zealand’s legislated 2050 emissions reduction targets are: net zero greenhouse gas emissions (except biogenic methane); and a 24-47 per cent reduction in biogenic methane. Unsurprisingly, the ERP requires actions across every sector of the economy including transport, energy and industry, building and construction, agriculture, forestry, waste and fluorinated gases. And one such area that is exposed to the risks of climate change is agriculture. Cont. on page 8
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Droughts and floods already pose a risk to this sector and will continue to be exposed at a greater rate thanks to climate change. Market pressures could also pose a risk to the sector but also an opportunity, the ERP states, to export low-emissions agricultural products. While the ERP acknowledges that many producers are already reducing their emissions, it has five focus areas to help guide agriculture to further mitigate emissions. Interestingly, the Government and industry will assist producers in a transition to a more circular and low-emissions economy, integrating the ki uta ki tai (from the mountains to the sea) principle into sustainable land management.
launch a circular economy hub, to support deployment of circular practices. “The private sector has a key role to play in unlocking the significant potential of the circular economy and bioeconomy. We need business to design out pollution, make better use of resources and innovate circular solutions,” the ERP states. Moving onto one of the country’s largest sources of greenhouse gas emissions, transport is responsible for 17 per cent of New Zealand’s gross emissions. Emissions from this sector are projected to reach 66.5 Mt CO2-e if ERP initiatives are not implemented. Conversely, the estimated emissions reduction from the initiatives in the ERP could be 1.7 to 1.9 Mt CO2-e.
Over the course of the first emissions budget, the Government will continue to fund initiatives that support a more sustainable, productive, and inclusive primary sector. To this end, the Government will also explore opportunities for the state-owned Landcorp Farming Limited (trading as Pa-mu) to lead in this area.
Among the several key actions to reach that goal is the work to decarbonise heavy transport and freight by providing funding to support the sector to purchase zero- and lowemissions trucks and supporting the uptake of low-carbon liquid fuels by implementing a sustainable aviation fuel mandate and a sustainable biofuels obligation.
It is envisaged that a circular economy that also has “a thriving bioeconomy that seizes the opportunities from global trends and shifting consumer preferences” will be delivered by 2050. A circular economy is important because it will support New Zealand’s economic and social wellbeing and essential to meeting our emissions budgets, the ERP states.
Four transport targets have been devised to help achieve these key actions, with target 3 being to reduce emissions from freight transport by 35 per cent by 2035. This target for freight transport includes emissions from trucks, rail, and ships.
A study2 commissioned by the Sustainable Business Network estimated that a more circular Auckland could reduce emissions by 2.7 Mt CO2-e and add $8.8 billion in additional economic activity by 2030. Scion estimates3 that the bioeconomy (parts of the economy that use renewable biological resources to produce food, products, and energy) could create an extra $30 billion for our economy and help reduce emissions by 12.5 Mt CO2-e by 2030. But it will require New Zealand to change the way we think about, and use, resources. So, before 2026, the Government will develop a strategy to deliver a circular economy and bioeconomy. This strategy will consider the skills, public and private investments, and innovation needed to achieve the new economy. Enabling infrastructure, such as resource recovery centres will be crucial for this to succeed. So too will the Government’s proposal to partner with key industry, Ma-ori, and local government stakeholders to 2 3
What will it take to reduce that number of emissions? One critical initiative is to develop a national freight and supply chain strategy with industry that will take a long-term, system-wide view to identify how to best decarbonise the freight transport system to be net zero by 2050, while improving the efficiency and competitiveness of the supply chain. Aviation isn’t exempt either; the ERP highlights implementing a sustainable aviation fuel mandate and the development of specific targets for decarbonising domestic aviation in line with 2050 targets. The establishment of a public-private leadership body will help with these actions, including operational efficiencies, infrastructure improvements and frameworks to encourage research, development, and innovation in sustainable aviation. Maritime is also in the gun for decarbonisation but has, at least, been trying to limit air pollutants since the Government acceded to Annex VI of the International Convention for the Prevention of Pollution from Ships in 2019. However, the ERP highlights that new maritime emissions targets will be set to include:
https://www.srgexpert.com/wp-content/uploads/2018/05/A-circular-economy-for-Auckland-9-May-2018.pdf https://www.scionresearch.com/__data/assets/pdf_file/0014/64310/Scion_strategy_4web.pdf
• Supporting the uptake of zero-emissions small passenger, coastal fishing, and recreational vessels; and • All new large passenger, cargo, and offshore fishing vessels to meet highest carbonintensity reduction, as set by the International Maritime Organization, by 2035. Additionally, the Government wishes to work with other like-minded countries to put in place the conditions to allow low- or zero-carbon shipping on key trade routes by 2035. Underpinning all of these initiatives is the ETS, an economy-wide tool that incorporates the costs or benefits of greenhouse gas emissions and removals into day-to-day economic activity – except for the agriculture sector and a portion of the waste sector. The New Zealand Emissions Trading Scheme helps reduce emissions by doing three main things: • Requiring businesses to measure and report on their greenhouse gas emissions; • Requiring businesses to surrender one ‘emissions unit’ (known as an NZU) to the Government for each one tonne of emissions they emit; and • Limiting the number of NZUs available to emitters (i.e., that are supplied into the scheme). Two years ago, an NZU was sitting around $25 (per tonne of CO2 equivalent) but has since reached over $75, and the Climate Change Commission (CCC) has suggested this price needs to double to meet our 2050 emissions reduction target. Consequently, the ERP highlights that the ETS settings need to align with the emissions budgets, among multiple other actions. And in order to do this, the CCC will provide advice on the unit limit and price control settings for 2023–27. Whatever you think of the plan, it is a massive undertaking. And one, Shaw admits, the Government cannot do alone. “The Emissions Reduction Plan is a plan for the whole of New Zealand. The Government will play a key role in getting the system settings right and accelerating the use of low-emissions practices and technologies. But we cannot do it alone. “Tackling climate change requires the combined effort of government, iwi / Ma-ori, unions, communities, local government, and business. This plan will guide the work we do together so that collectively we transition to a low carbon future in a way that benefits everyone.”
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Embracing agile ecosystem through digital transformation BY EIAS AI HUMDAN, DR YANGYAN SHI, AND MASUD BEHINA
FIRMS ARE CURRENTLY facing highly turbulent environments, with strong doses of dynamism, complexity, and uncertainty. Work has become knowlege intensive and geographically dispersed. In such a context, knowing the mechanisms that allow organisations to detect environmental changes and being able to adapt and offer the proper response to them becomes especially relevant. Therefore, we suggest the concept of agile ecosystem – a spontaneous sensing and responding network – as a key issue concerning organisational survival and success. Also, in order to boost agility in the ecosystem, we present a framework that depicts how companies reap the benefits of digital transformation, that knock down all walls between members and make the ecosystem fully transparent. The outcomes are velocity and visibility and thus more agility in the ecosystem. Over a number of years, we have been witnessing a steady growth of the concept "business ecosystem", which has been recognised in many firms, but they have not fully realised the importance of how to build and implement it. Business ecosystem is a business strategy of resource integrating actors connected by mutual value creation. Executives realise that many of the best skills and ideas in their industry do not reside within a single firm. Thus, more collaboration is seen to have a fundamentally different level of success. For business leaders to embrace the agile ecosystem, they need to undergo a profound change into their business processes and operations. In particular, adopting innovative advances in technology allow for rapid expansion and enormous flexibility. There is less need to invest in new assets because the real investment is in being attractive to a broad base of customers and suppliers. Innovation-oriented firms actively absorb knowledge and technology amongst all members, creating a rapid learning ability and thus, they anticipate and react to customers faster than their competitors. From Amazon’s drone delivery to Uber’s self-driving trucks, technological advancement can be seen to boost agility in the ecosystem. After decades of refinement, technological revolution – although progressing – seems to have settled down in literature and practice under digtital transformation.
Digital transformation, known as “Industry 4.0”, is a term associated with cross-sector technological change with a focus on industry that is being adopted by states and large firms to refer to the development of “smart factories”, involving greater flexibility, large-scale customisation, speed, and autonomy in production and collection of large amounts of data. Addiontally, it touches on the significant reduction in costs by increasing efficiency and reducing the duration of innovation cycles. Industry 4.0 refers to the the fourth industrial revolution, where the three previous industrial revolutions refer to the changes brought about by hydropower and steam power, electricity, and automation, respectively. It brings new level of organisation and control with new ranges of technologies, processes, and materials. While digital transformation is critical for embracing an agile ecosystem, possessing the needed transformative capabilities is essential to unlocking the full potential of digital technologies. That is, an agile ecosystem is not about adopting new systems; it is a collaborative endeavour and a change of mindset that resembles the value co-creation of sense and response networks. Figure 1 depicts these capabilities.
Network agility The agile ecosystem means creating networks everywhere, digitising the
supply chain and adopting the latest tools of industry 4.0. Digital transformation is crucial to maintaining trust amongst the network. This means continuously modernising the supply chain that involves more technologies than ever that integrate better methods of collaboration and trust. From AI-guided picking and packing wearables to blockchain-designed customer order ledgers, and machines on the floor connected to the Internet of Things – organisations have a list of the dynamic yet complex infrastructure to integrate into their ecosystem and maintain agility. Such technological innovation can predict or notify stakeholders of any changes or possible disruptions. Blockchain enables firms to store information on an online decentralised ledger where terms and conditions cannot be changed that provides better transparency in transactions among members, bringing a much higher degree of trust. It enables trading partners to share documents and transaction data with faster speed, accuracy, and reliability and thus reducing humdreds of communications required to ship a single container from Africa to Europe. As a result, blockchain will contribute in making the ecosystem agile by reducing manufacturing lead times, improving frequency of new product development, providing reliable and resilient tracking of information, and increasing delivery capabilities. Cont. on page 10
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Network visibity In light of COVID-19, pressure on product supply has never been higher and knowing where your product is at all times is one of the first steps in improving flexibility and network resilience. There is no room in today’s market for decision-makers to be only reactive. Proactive thinking can often be the difference in success or failure which can be maintained through cloud computing. Cloud computing is the delivery of computing services – including servers, storage, databases, networking, software, analytics, and intelligence – over the internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. It enables organisations to respond quickly to changing business conditions, use data more effectively, and achieve exponential productivity gains across the ecoystem. Embracing the cloud today will be key to remaining competitive tomorrow. The concept of resource sharing to attain unity and coherence, while avoiding the creation and maintenance of IT infrastructure is very convenient for a variety of users across the ecosystem with its variety and diversity of services and functions. Such network visibility and traceability provides managers with alerts and insights on potential setbacks.
Insights generation Rapid generation of insights is another needed capability for business leaders to build an agile ecosystem that can be boosted by digital transformation. Continuous changes in technology, markets, and customer
Eias AI Humdan Eias is a researcher and lecturer in management sciences, has been teaching management-related subjects in many international institutions. He graduated from Exeter University in 2005 with MSc in International Business, then was a full-time academic manager for many academic institutions. Scored the top grade in MRes in Management in 2017 after achieving a Ph.D. in operations management, both at Macquarie University – Sydney Australia.
preferences may render existing products and services obsolete, thus requiring changes in a firm’s offerings. Signalling user needs by intensively interacting with clients is the most critical capability of innovation that will help in continually providing new offerings and experience, especially in highly unpredictable and heterogeneous sectors. Innovative products that are dynamic and highly profitable with high demand unpredictability and short life cycles work well with an agile ecosystem. High-performing firms across industries are creating dedicated data groups, under senior executive leadership, to consolidate and analyse data and distribute it throughout the organisation and other members in the ecosystem. AI is seen as a proper investment for rapid insights generation. AI is concerned with building smart machines capable of performing tasks that typically require human intelligence and thus mimics the cognitive functions of humans and their interaction with the environment. Learning and problem solving are major functions of AI. This technology has huge potential in the multiple tiers of suppliers – it can reshape business processes and ecosystems, creating new areas of production and new types of clients.
Empowered teams Finally, and more importantly, top executive support is vital to drive the agility philosophy and the digital transformation. It is strongly related to all efforts of renewing the organisational routines, procedures, mechanisms, systems, models and the
Peter Shi Dr Yangyan (Peter) Shi has received his PhD from the University of Auckland, and is a senior lecturer in Operations and Supply Chain Management at Macquarie Graduate School of Management (MGSM), Faculty of Business and Economics, Macquarie University, NSW, Australia. Also, he is a member of the Centre for Supply Chain Management at the University of Auckland Business School.
like to promote decentralised teamwork, information sharing, coordination, collaboration, and learning which are key strategic enablers of an agile ecosystem. Even adopting the required technology in processes requires a changing mindset; a holistic and integrated approach to adaptation by top executives and most importantly having a vision of how digital applications can streamline cross-functional processes and services. So, learning about digital tranformation should not be limited to people with a technical background. This kind of shift requires a real culture change, where innovation and continuous learning are actively embraced by all. We presented the concept of agile ecosystem that has become a necessity as a response to the ever-increasing global market requirements. Associated with rapid sense and respond pillars, an agile ecosyetm helps business leaders handle complex market changes and delivers customised products because it allows them to think from a system perspective where all actors contribute to the value propositions. We also indicated that managers who seek to adopt an agile ecosystem are informed to invest more in building relational assets through digitised capabilities. Digitisation can improve the operations of companies, strengthen distant links of their supply chain and can very well interconnect companies and their customers that can significantly improve the agility of the ecosystem. Market pressures to modernise to an agile ecosystem through digitisation comes with a big payoff.
Masud Behina Masud Behnia received his B.S., M.S., and Ph.D. degrees from Purdue University, Washington DC, USA. He has extensive experience in the power industry, and has worked in experimental and numerical fluid mechanics and heat transfer for more than 25 years. He has been working as a Professor in Operations Management, Sydney, Australia. He has had publications in journals and conferences, including more than 500 refereed papers.
ecessary for the purpose of the collaborative activity.
tion for cartel provisions that constitute a restraint of trade
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he cartel prohibition does not apply to a cartel provision that constitutes a restraint of trade if:
Cartel activity is illegal
34.1 the parties were involved in a collaborative activity that has ended;
34.2 the cartel provision constitutes a restraint of trade and was reasonably necessary to achieve
aims of the collaborative activity; and THE CONSEQUENCES of a conversation over agreeing cover pricing – an illegal practice coffee or a beer can be serious if you’re meeting with a competitor to discuss prices, tenders, markets, or services. This could be cartel activity and individuals who take part can face jail time.
where bidders agree the price each party will bid. In 2019, Ronovation Limited, a property investment membership business, was fined $400,000 after admitting to price fixing in Auckland’s residential real estate market by developing a set of rules to ensure members were not competing against each other for investment properties.
competition and can damage the welfare of New Zealanders generally by raising prices, and also by negatively affecting other factors such as choice, innovation, quality and investment.
34.3 the agreement did not end because the lessening of competition between two or more par
became its dominant purpose.
Cartel conduct harms consumers through
his provision is potentially a collaborative is higherin prices or reduced quality, and activity it harms What is cartel activity? relevant when a franchisor that is involved other businesses that are trying to compete You may have heard the term cartel before, o enforce a restraint of trade clause in a franchise agreement that comes to an end. fairly. but perhaps not in this context. A cartel is where two or more businesses agree not to compete with each other. It can take many forms, including price fixing, rigging bids, sharing markets, or restricting services. Cartel activity can take place in any business setting – including in the transport and logistics sector.
Market sharing is when businesses agree to carve up markets and not compete for the same customers. This could be in relation to the sale of a specific product, a geographic area or a particular type of customer. For example, if two competing transport businesses agree to divide an area so each only accepts business in an agreed region, that could be market sharing. Similarly, market sharing agreements can be customer specific.
agreed formula. It’s important to maintain
they are selling. In the transport and logistics
How to report cartel activity
Bid rigging happens when there is an agreement between bidders about who should win a tender. This may involve potential bidders not bidding for a tender to support the proposed winner, or bidders
the potential consequences of taking part.
more about cartel activity and how to report it on the Commerce Commission’s website at https://comcom.govt.nz/business/ avoiding-anti-competitive-behaviour/whatis-a-cartel/reporting-cartel-conduct.
Example
What are the penalties? The penalties for taking part in cartel activity are significant – individuals can be fined up to $500,000 and companies can be fined up to $10 million, three times the commercial gain, or ten percent of turnover per year per breach. Since April 2021, businesses and individuals can also be liable for criminal conviction and individuals convicted of engaging in cartel conduct could face imprisonment
ta Cleaning operates a nationwide domestic cleaning franchise. Its standard franchise Price fixingServices is when businesses agree on what prices they will charge to avoid having to reement includes a clause restricting the franchisee from owning or operating a competing busin compete which each other. It includes Restricting services happen when competitors competitors agreeing tofor fix anyapart of thin five kilometres period of 3 months after the franchise agreement comes to an end. agree to prevent, restrict, or limit the services a price, or to set prices according to an
e collaborative activity apply after thecould franchise agreement comes to an end if the sector, restricting services include independent pricing decisions.exception Agreeing with will Businesses or individuals can report cartel agreeing with competing freight services to competitors to pass on additional fees or activity by contacting the Commerce To test straintsurcharges, of trade was reasonably for the purposes of establishing the franchise. limit the number of weekly services to an for example fuel surcharges, are necessary Commission. The Commission can grant area. examples of price fixing. In 2021, the High leniency the first member a cartel is more s, we would, for example, ask Rata Cleaning Services to explain why thetorestraint ofoftrade Court imposed penalties on Specialised The Commerce Commission is reminding to approach it, provided they meet the Container Services and its director for directors,We business owners, also managers and to consider an simply desirable, easier or preferable. would need the restraint is requirementswhether for leniency. Businesses and attempted price fixing of vehicle booking employees in the transport and logistics individuals can also use the Commission’s fees charged to transport operators. asonable at common law. sector of what constitutes cartel conduct and anonymous whistle-blower tool. You can read Why is cartel activity illegal? Cartel activity can harm consumers and businesses. It prevents open and effective
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Budget 2022: Money, money, money IT WAS DURING record low unemployment figures, a gross domestic product above prepandemic levels, and rising wages that the Government delivered its fourth budget. That was the domestic parameters in which Finance Minister Hon Grant Robertson delivered Budget 2022. Interestingly, this budget was released six days before the International Monetary Fund (IMF) gave New Zealand’s economy a decent thumbs up. IMF staff holds bilateral discussions with members, usually every year, and collects economic and financial information, and discusses with officials the country’s economic developments and policies. Its latest report1 on New Zealand states that we “managed the transition to living with COVID well. Strong health and economic policies supported quick recovery from lockdowns in 2021”. However, its views on the country’s infrastructure leaves a lot to be desired: “Infrastructure spending should aim at reducing the infrastructure gap and supporting the transition to a net zero carbon growth path”. “Complementary policies to address gross emissions, including investment in green technologies and infrastructure, supporting innovation, and regulatory actions to accelerate the uptake of low- and zero-emissions technologies may thus be needed, along with the use of [Emissions Trading Scheme] proceeds to compensate those adversely affected by carbon price increases, particularly vulnerable groups.” And this was the international framework within which the Government announced its spending going forward. One such initiative is the $18 million for the development of a comprehensive energy strategy, a hydrogen roadmap. This work sets the foundations for future decarbonisation and high value economic opportunities, a very fine opportunity for companies already working in this field. Further, the Government says that by creating a clear regulatory environment, this will support new investment, regional development and highly skilled jobs, while providing more renewable energy options to support our transition to a low emissions economy. “Hydrogen as a fuel could enable the decarbonisation of hard to electrify sectors such as heavy freight and steel – the roadmap will provide the nascent green hydrogen sector with further clarity on how the government will support a pathway to an economically 1
sustainable market for hydrogen,” the budget states. Transport mode shift and reducing emissions from transportation are also big-ticket items, with a price tag of $375 million. As a step towards reducing vehicles on urban roads, this will help spur investment in “making walking, cycling and public transport more attractive options” to help make our cities more liveable. Additionally, it is envisaged that this will help local councils transition toward lowemissions urban environments. A $41 million investment has been tagged to support Public Transport Authorities to deploy low- and zero-emissions buses, an initiative already underway around the country. Interestingly, there is $20 million of funding allocated to support innovations in the decarbonisation of freight through co-funding for projects demonstrating low emission freight technologies, fuels, services, infrastructure, innovations and business models. By and far the largest investment belongs to our country’s infrastructure over the next five years with a $61.9 billion investment. The Government knows that “this alone is not enough”, as the infrastructure gap is estimated to be between $17-$104 billion. “We need to be smarter about the way we plan, deliver and use our infrastructure. This will mean getting more from the infrastructure we do build, reducing costs and prioritising for the greatest impact,” Robertson said. “Te Waihanga’s [New Zealand Infrastructure Commission] strategy will be a key enabler of many of our Government’s priorities; tackling the housing crisis, responding to climate change, and building a more secure economy.” That infrastructure investment will be spent across housing, transport, health, education, and other areas. The specific Budget 2022 projects include: • $349 million of capital funding to replace and modernise our rail assets; • $1.3 billion of capital funding for upgrading our health infrastructure to support current and future demand, including priority capital projects such as Whanga-rei Hospital and starting the redevelopment of Nelson Hospital;
• $385 million of capital and $50 million operating funding for building and refurbishing new classrooms; and • Further funding to progress the delivery of the Auckland Light Rail project There is also $36 million set aside to support Ma-ori economic development with the Te Ringa Ha-pai Whenua Infrastructure Fund ($10 million total operating) and the Progressive Procurement project ($26 million total operating). These will enable owners to undertake economic, cultural, social and environmental projects on their whenua and will help to build capability for Ma-ori businesses to effectively participate in public sector procurement processes and increase supplier diversity. For New Zealand’s small to medium sized enterprises (SMEs), a new fund will be available to improve access to finance is included to drive economic security, innovation, and lowemissions growth. The Business Growth Fund has set aside $100 million over the coming year for Crown investment as a minority shareholder in a Business Growth Fund, alongside private banks. “It is intended the Fund will help fill a gap in the capital market for SMEs that require growth capital not available through current market providers. The Fund is an investment model already established in the UK, Ireland, Canada, and Australia,” Economic and Regional Development, Tourism, and Small Business Minister Hon Stuart Nash said. “SMEs are a core part of our economy, contributing about 30 percent to New Zealand’s GDP. Many are poised to grow if given the opportunity and can play a key role in our economic security and transition to a low emissions economy.” The tourism industry wasn’t forgotten; a $54.2 million is available through the Innovation Programme for Tourism Recovery. While the new programme is subject to further detailed design work, it will prioritise innovation and low-emissions projects, and support tourism recovery. “We will work alongside tourism businesses to develop new innovative ideas that improve sustainability and productivity of eligible businesses. The Government has agreed to reallocate funds from previous tourism support programmes that were not drawn down by eligible businesses,” Nash said.
https://www.imf.org/en/Publications/CR/Issues/2022/05/13/New-Zealand-2022-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-517848
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Independent review of Road to Zero road safety investment released A REVIEW FOUND that there has been good progress made across the Road Safety Partnership, but there are opportunities to further enhance the delivery of investments and activity. Road to Zero sets out an overarching vision of a New Zealand where no one is killed or seriously injured in road crashes, with a target of 40 per cent reduction in deaths and serious injuries by 2030. Martin Jenkins was commissioned by the Ministry of Transport (MOT) to gain a detailed understanding of how road policing activities and safety infrastructure investments are prioritised, delivered and monitored. This independent review highlights what is working well and any areas for improvement to support Waka Kotahi NZ Transport Agency (Waka Kotahi) and New Zealand Police, as the lead delivery agencies. One of the report’s key findings identified an alignment between the Government’s strategic direction and the strategic focus for road safety outcomes in both NZ Police and Waka Kotahi. Additionally, there has been a recent resetting of previous arrangements in both Waka Kotahi and Police to achieve safety outcomes. However, there is more work to be done to deliver safety outcomes consistently within both organisations at operational levels through ensuring decisions at District and regional levels appropriately prioritise and allocate resource to road safety activity, and through an increased focus on working together at regional and District levels to achieve road safety outcomes. “Both Waka Kotahi and NZ Police are aware of the work to be done and are actively putting in place governance, management and delivery mechanisms to address this,” the review states. “The Road Safety Partnership Programme is still bedding down as an initiative where all three partner agencies work in equal partnership (Te Manatu- Waka, Waka Kotahi and NZ Police), with recently strengthened arrangements for governance and oversight across the portfolio. “Historically other priorities have crowded out the allocation of road policing resources, with recent steps being taken to address
this issue. There is a lack of performance data and evaluation across the system at a granular level, including financial measures, and this presents a challenge for assessing performance efficiency and effectiveness for making investment decisions.” MOT, Waka Kotahi, and Police welcomed the review and accepted the findings and recommendations set out in the review. MOT Chief Executive and Secretary for Transport, Peter Mersi, said the review found that there has been good progress made across the Road Safety Partnership, but there are opportunities to further enhance the delivery of investments and activity through better reporting, greater accountability, and stronger governance. “To achieve our vision, we need to make sure we are taking the right actions, investing in the right areas, and have clear line of sight on the positive outcomes we’re working towards. Alongside our road safety partners Waka Kotahi and Police, we have agreed specific actions to respond to the findings. I look forward to working with my colleagues on making progress on these.” Waka Kotahi Chief Executive Nicole Rosie says her organisation is committed to the actions identified, many of which are already underway in close partnership with Te ManatuWaka and Police. Police Commissioner Andrew Coster recognises where they need to make changes and adjust their systems so Police officers can most effectively play their part in saving lives
and preventing injury on the road. “Our new Safe Roads Control Strategy ensures our prevention and enforcement activity is focused on what will have the most impact in reducing harm on the road. That means you can expect to see us anywhere, at any time, making sure people are driving safely on the road.” Road policing and infrastructure improvements are key parts of the overall approach to improving safety. This also includes tackling unsafe speeds, lifting the safety of our vehicle fleet and the behaviour of road users, including drunk driving, wearing seatbelts and avoiding distractions. “Road to Zero is a large, ambitious plan. It’s critical that we get this right, for the families and communities impacted by road trauma, and for all road users who expect to feel safe and be safe on our roads,” Mr Mersi says. MOT has established the Road to Zero Ministerial Group to provide strengthened oversight and leadership over the delivery of Road to Zero. This Group includes the Minister of Transport (including in his capacity as Minister for Workplace Relations and Safety), the Minister of Police and the Minister for ACC. The Ministerial Group will meet quarterly, with the first meeting held in early 2022. In addition, the Road to Zero Chief Executives Group has been established. This Group will monitor the response to the Review, meet quarterly and will provide progress reports to the Ministerial Group.
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Port of Tauranga handles nearly a third of all New Zealand cargo by volume, 36 per cent of New Zealand exports and 42 per cent of all shipping containers in New Zealand. It is connected by road and rail to the Waikato, Auckland, and central North Island regions. Photos: Port of Tauranga
New Zealand’s port for the future NEW ZEALAND’S LARGEST and most efficient port is preparing for the next stage of cargo growth. Port of Tauranga handles nearly a third of all New Zealand cargo by volume, 36 per cent of New Zealand exports and 42 per cent of all shipping containers in New Zealand. The port handles around 70 per cent of New Zealand’s dairy trade, around 60 per cent of its meat exports, 30 per cent of log exports and almost all kiwifruit exports. Port of Tauranga is connected by road and rail to the Waikato, Auckland, and central North Island regions and has half shares in Northport at Whangarei and PrimePort Timaru. It operates inland ports in Auckland, Christchurch, and soon Hamilton. Its extensive national network gives importers and exporters efficient access to markets globally and puts them in reach of the “big ship” services that can only call at Tauranga. These larger vessels are faster and more efficient, and have fewer carbon emissions than smaller ships. In the six years to 2016, Port of Tauranga invested heavily in capacity expansion to accommodate larger vessels, including deepening and widening shipping channels and expanding cargo storage and handling facilities.
The next stage of investment is about to begin. Port of Tauranga intends to extend its container wharves by converting existing port land into an additional berth. The port will also introduce automated electric stacking cranes to increase the number of containers that can be stored and handled on site. The investments will allow the port to almost double its container handling capacity to around 2.8 million TEUs (twenty foot equivalent units) annually. This will give Port of Tauranga an estimated 35 years’ capacity headroom. The berth development, which is within the existing port footprint, has been in the planning for the last 30 years. The resource consent application for the project is expected to be heard in the Environment Court in July 2022. Port of Tauranga Chief Executive, Leonard Sampson, says the development is becoming increasingly urgent as supply chain disruption continues around the world.
left, time is of the essence for this critical piece of New Zealand infrastructure. It will protect New Zealand’s exporting ability for the next three decades.” Port of Tauranga is also developing a new inland port in a 50/50 partnership with Tainui Group Holdings (TGH). The rail-connected 30 hectare inland port is part of TGH’s Ruakura Superhub freight and logistics complex being built on the outskirts of Hamilton. The first stage of the inland port is due to open later this year. Mr Sampson says the Ruakura Inland Port will unlock significant environmental and economic benefits for importers and exporters. Port of Tauranga is the only New Zealand port able to handle larger container vessels and give shippers access to their greater fuel efficiency and lower emissions.
“We need to be able to accommodate larger and more frequent vessels, especially as kiwifruit export volumes are predicted to grow up to 40 per cent in volume in the next five years,” he says.
By far the largest proportion of carbon emissions in New Zealand’s container supply chain relates to the “blue water” or oceangoing component of the cargo journey. Landside emissions from road or rail transport contribute only a small percentage of the total carbon emissions related to container imports and exports.
“With a two-year construction period and an estimated two and a half years of capacity
Port of Tauranga regularly receives visits from vessels with capacity of around 9,500 TEUs.
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The carbon footprint for a 20 foot, 16 tonne dry container from Shanghai to Port of Tauranga on a ship of that size is more than 20 per cent smaller than the same box shipped on a 4,500 TEU vessel. Port of Tauranga’s planned automated electric stacking cranes also offer up to 75 per cent carbon emission savings over a traditional diesel straddle operation. Mr Sampson says Port of Tauranga’s investments will have wide-reaching benefits for the local, regional and national economies. Although the company directly employs around 270 people, more than 6,000 regularly work at the port. Thousands more work in associated businesses. “The port has a major influence on regional employment and economic prosperity,” says Mr Sampson. Amidst ongoing discussions about the future of Ports of Auckland, Port of Tauranga is advocating an integrated Upper North Island supply chain that makes the most of existing rail and road networks, inland ports and sea ports. “Port of Tauranga and Northport have the space, locations, and networks to manage bulk imports and exports, while Ports of Auckland could reduce its footprint and efficiently handle containerised imports for Auckland and some specialised services such as cruise. Tauranga’s ability to host larger container vessels enables it to continue to be the main gateway for containerised exports,” says Mr Sampson. Port of Tauranga is New Zealand’s largest user of rail. Around 92 trains per week transfer containers between Tauranga and Auckland, and the port is also connected by rail to key bulk cargo sources in Waikato and the central North Island. Much of the 38 per cent increase in cargo volumes over the past decade has been able to be absorbed without adding significant truck movements on local highways, due to the use of rail and the growth in transhipment (where containers are transferred between ships at Tauranga). In Auckland, Port of Tauranga’s inland port MetroPort is operated in partnership with KiwiRail. On its own, MetroPort is the country’s fourth largest container terminal. It has capacity for around 2,880 TEU. In Tauranga, Port of Tauranga owns about 190 hectares on both sides of Te Awanui Tauranga Harbour. It has 2.8 kilometres of berth length, with 15 berths. Tauranga Container Terminal has more than 6,200 TEU ground slots, with more than 3,400 dedicated reefer connections. It is served by nine Liebherr container cranes and 53 straddle carriers.
In the six years to 2016, Port of Tauranga invested heavily in capacity expansion to accommodate larger vessels, including deepening and widening shipping channels and expanding cargo storage and handling facilities.
Port of Tauranga is majority-owned by the region’s ratepayers. Bay of Plenty Regional Council’s investment arm, Quayside Holdings, owns just over 54 per cent of the shares in the NZX-listed company. Through dividends to Quayside Holdings, the Port has returned more than $724 million to ratepayers in the past 10 years. Quayside’s flow-on contribution to the council’s income currently saves ratepayers $347 on their annual household rates bill. Quayside has used its shareholding in Port of Tauranga to establish a $200 million infrastructure fund to help pay for regional assets and infrastructure, such as a tertiary education hub in Tauranga. Mr Sampson says the port is determined to protect and enhance the natural environment in which it operates. “We occupy a very special piece of real estate and it’s important to us that we look after the environment and the community in which we are lucky enough to operate.” Port of Tauranga directly supports a number of community-based projects and events across the arts, sport, education, environment, and business sectors. Port of Tauranga has invested heavily in air and stormwater quality, as well as carbon emission reduction. The Port has purchased more energy efficient vehicles including hybrid straddle carriers and electric light vehicles. Unfortunately, last year’s congestion at the container terminal had a negative impact on
carbon emissions through increased diesel use. However, this was offset by savings in other areas, including further reductions in waste removed to landfill. Waste volumes, primarily wharf sweepings, now sit at about 27 per cent of the volume sent to landfill two years ago. The COVID-19 pandemic has caused significant challenges for the port, which has felt the consequences of volatile cargo volumes, scarce shipping availability, delays at other ports, and labour shortages due to isolation requirements. Congestion due to worldwide supply chain disruption is likely to continue for some time yet, with only around 40 per cent of shipping services currently meeting their pro forma berth windows. Port of Tauranga’s container terminal yard storage intensity is still running about 40 per cent higher than the same time last year, although productivity is slowly improving. Mr Sampson took over the helm as Chief Executive at Port of Tauranga in July 2021, succeeding Mark Cairns who had led the company for 16 years. This year, longstanding Chair, David Pilkington, will also retire from the Board and will be replaced by experienced Director and Chair Julia Hoare. Mr Sampson says: “We have an important role to play in the Bay of Plenty’s economic recovery from the COVID-19 pandemic and its ongoing prosperity. Our strong relationships with our service providers, employees, customers and community underpin our future success and the ongoing benefits for the region and New Zealand.”
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Sustainable supply chains and the drive to implement a green last mile INCORPORATING a sustainability focus into freight and logistics is on the rise as businesses seek to demonstrate leadership and embed social responsibility goals within their operations. There is increasing awareness across the fast-moving consumer goods sector that sustainable supply chains are not just for corporate governance and a driver of operational savings; they are also a tool to attract or retain environmentally conscious customers who are choosing businesses based on their green credentials. According to a report by Australia Post, the key concerns for online shoppers are sustainable packaging and delivery, returns policies and processes and additional costs such as shipping, taxes, and duties. We can expect New Zealand customers undoubtedly hold similar concerns to our Australian counterparts. Almost half of the respondents want recyclable packaging, and nearly 30 per cent prefer carbon-neutral delivery. Some 28 per cent are willing to wait longer for delivery to reduce environmental impact. Clearly, there has been a marked shift in the consumer expectations around sustainability and businesses environmental initiatives are now under examination. This push for sustainability has coincided with an e-commerce boom, with customers driven online and the rise of next day delivery changing the way businesses interact with them. It has also changed consumers’ buying experiences, shifting the retail landscape. As retailers benefit from strong consumer demand and a colossal increase in e-commerce orders, the focus for some is now on controlling emissions within the supply chain. The uptake of green warehousing has been rapid, with many businesses installing solar panels and water recycling plants within warehouses to up their sustainability credentials. Industrial occupiers across New Zealand have been incorporating sustainable practices in their facilities for a while now, which is driving green initiatives in the industrial property market. Many have been investing in solar panels and water recycling plants among other environmental-friendly initiatives in industrial property, ultimately reducing carbon emissions. The final piece in the puzzle of sustainable supply chains – the ‘last mile’ – is now under
Companies need to find ways to become more efficient and ultimately more sustainable. Another option is to look at the current delivery vehicle fleet and considering whether electric vehicles can be adopted. NZ Post’s work in electrifying their vans is a prime example. Photo: NZ Post
the spotlight, with businesses ramping up their efforts to ‘green’ their operations from warehouse dispatch to delivery on the doorstep. Reviewing the configuration of your network design to ensure that the distribution centres and fulfilment centres are configured in a way which reduces travel is a good starting point. Going a step further and developing a comprehensive network strategy which outlines current and future infrastructure and transport routes, location of physical stores, fulfilment centres and dark sites plus identifying where customer demand is coming from is even better, and should be a priority for businesses serious about making their supply chains more sustainable. It’s unlikely that the explosion in online shopping is going away any time soon and companies need to find ways to become more efficient and ultimately more sustainable. Part of this equation is understanding the cost to service or their logistics profile by expanding from a large warehouse into multiple smaller ones in order to deliver on time, like Amazon in the US has done. Another option is to look at the current delivery vehicle fleet and considering whether electric vehicles can be adopted. NZ Post’s work in electrifying their fleet is a prime example, 100 per cent of their delivery buggies, designed for neighbourhood deliveries, are electric. Finally, who you choose as your freight and logistics provider can make all the difference in achieving a greener ‘last mile’. Using the procurement process to identify providers
who have a focus on sustainability and who demonstrate their green credentials, making sustainability a key objective of procurement contracts can also ensure your last mile is as green as it can be. Making tangible efforts to implement a more sustainable supply chain should be a focus for businesses, especially those in the B2C market, with customer expectations around sustainability only likely to grow. Focusing sustainability efforts on greening the last mile is where the biggest gains in reducing emissions can be made and as business shift away from sustainability initiatives within physical infrastructure ‘greening’ the last mile should be next on the to do list.
Caleb Nicolson, General Manager, TMX New Zealands
Caleb leads the TMX New Zealand office delivering a world class supply chain, industrial project delivery and property offer in the New Zealand market.
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Modern buses, such as Auckland Transport's hydrogen bus manufactured by New Zealand company Global Bus Ventures, are comfortable, smooth and a far cry from what we remember from our school-bus days. Photo: Global Bus Ventures
Buses are boring, but … BY DAVID GREIG
LIGHT RAIL (trams), traditional “heavy” rail, cycling, walking, and cars are the main focus of current New Zealand debates about urban transport. But our main form of public transport is buses. They tend to be taken for granted or even looked down on (“loser cruisers”), but they have more going for them than is commonly thought. They should not be forgotten when considering how to improve the ways people can move around our cities.
Attributes of modern bus systems Modern buses, such as those on Auckland’s Northern Busway and Wellington’s electric buses, are comfortable, smooth and a far cry from what we remember from our school-bus days. They have inherited advantages that, if well exploited, translate into low costs and quick, reliable, flexible services: • Buses are relatively cheap, tending these days to be a small add-on to large production runs in China. • They are easy to install – the road is
already there. Upgrades to create bus lanes, or separate busways with their own rights of way, can be done in stages. • They are flexible to operate – they can peel off from a central corridor onto feeder routes, can readily divert around obstacles such as crashes and can readily adapt to one-off events. • They are also flexible in the longer term. They can adapt to new urban developments or can be installed just in time to help make a new development possible. • They suit New Zealand’s low-density suburbs, yet their frequency can readily be ramped up if the density is increased. • They are resilient – a route can immediately be changed if there is a problem caused by an earthquake, flood, burst pipes etc. • They now have low emissions – older buses are being replaced with electric ones.
Low-cost improvements can be made But we are not making the best of what we have. There are opportunities to improve bus services at relatively low cost: • Greater use of traffic light timing to give buses priority or to delay them when they are running ahead of schedule. This provides a way of reducing “bunching” of buses – the first bus can be allowed through an intersection more quickly and the next one held back, so both end up on schedule. A late bus means a wait (not always well sheltered from the weather) and not arriving at the destination when expected. An early bus is similar to a cancelled bus – the bus is not there when the passengers expect it. Reliability helps attract patronage. Cont. on page 18
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• Likewise, the use of traffic light timing can improve connections – for example holding a bus back a minute if that makes it possible for passengers on a related service to make the connection, they were expecting to instead of having to wait for the next one. • More generally, greater use of “big data” IT allows simultaneous management of bus fleets, road traffic and real-time passenger information. Buses, trucks, and cars (through mobile phones) constantly transmit information on their speed and location, so a traffic planner or algorithm can adjust flows by changing traffic light settings. But such improvements need to be actually implemented, not just installed but left turned off. • Improved intersections to favour buses. Examples are slip lanes that allow buses to jump ahead of traffic queued at intersections, the easing of tight turns and the widening of choke points. The changes can be modest and the cost low: – Moving a bus stop – up to $20k (excluding kerb work), with kerb and shelter work, up to $50k. – Installing a pedestrian crossing (zebra) – $250-$750k. – Installing a signalised crossing – $500$1.5m. • Improved roads to favour buses, with more and wider bus lanes. An example was Fanshawe Street that leads from the Auckland CBD to the Harbour Bridge – it was readily widened to make room for bus lanes by making better use of available road space and buying slivers of land from adjacent properties. An example of an improvement that is waiting to happen: buses are tangled up in morning traffic at Birdwood Street in Karori, Wellington yet there is room there to build a slip lane. • Construction of busways – they are wider than on-road bus lanes and provide bus-only routes that are not impacted by traffic, such as the Auckland’s Northern Busway and the new busway from Botany to Auckland Airport. Unlike rail solutions, which are much more expensive, they can be done incrementally – the bus can operate on the new section and then divert onto the normal road. In due course, the busway can be converted to light rail if that is favoured. • Improved bus stops with entry and exit tapers so it is easier for buses to get in and out, and easier for buses to overtake each other. Reduced road cambers or higher footpaths so buses do not
have to lose time “kneeling” to the right level. These changes help reduce “dwell time” (the time taken to load and unload passengers). • Improved bus shelters that do actually provide shelter, so passengers coming to get the bus or transferring between buses are really protected from wind and rain. • Electronic passenger information panels and apps that tell the truth. Often a bus is said to be due several minutes before it actually arrives. Part of the reason is insufficient sensors along the bus’s route – management is not sure where the buses really are so the information has conservative margin for error. • More imaginative design and location of bus terminals. One opportunity is the nearempty site next to the Auckland Ferry Terminal and across the road from Britomart Railway Station. It is much bigger than the bus terminal that works effectively near Wellington Railway Station. • Building overhead structures (much cheaper than tunnels) in areas where there is bus-on-bus congestion, often confined to particular intersections or short stretches of road. These modest changes would improve average bus speeds and reliability, without which potential passengers are deterred. Speed and reliability would attract more patronage, in turn justifying greater bus frequencies. That in turn would encourage a further increase in patronage, and a reduction in car use and emissions.
Other potential improvements include: • Longer double-articulated buses, or more double decker buses, for the busier routes. • In the longer term, new bus stations and bus designs that allow buses to load and unload on both sides.
Buses and congestion pricing Buses will be particularly useful if, as seems likely, New Zealand’s main cities adopt congestion pricing – that is, charging for cars’ use of busy roads in peak periods, so some users move to off-peak periods or to other modes such as public transport and cycling. It has been successful in Singapore, Sweden and to some extent London. Charging would operate through automatic number plate recognition, as already done for Tauranga’s toll roads and overseas. A strong case for congestion pricing has been made from overseas experience and several New Zealand studies1. As some of the motorists who face congestion prices would choose to switch to public transport, more public transport would be needed. The easiest way is with buses, because of their inherent flexibility and low costs. It is not clear in advance how many buses would be needed, but their number can be quickly adjusted in the light of experience. For example, when London introduced congestion pricing, 300 more buses were added but with hindsight only 150 were needed; the surplus buses were readily redeployed elsewhere.
Buses and light rail Improving bus services will get greater attention as we come to grips with the extreme cost of new light rail services, up to $15 billion for just one corridor in Auckland. That would divert resources, management time and political attention from other more modest and better-value transport improvements, including relatively cheap bus investments. A 2019 Wellington study estimated $90-143 million to fix the worst bus problems, reducing typical morning peak journeys by three to nine minutes2. A diversion from worthwhile bus projects would leave most parts of our cities (including low-income areas) to get by with little in the way of public transport improvement.
David Greig
David is an economist (Victoria, Canterbury and Harvard Universities) who has worked on transport policy in the New Zealand and Victorian (Melbourne) Treasury Departments, the Australian consulting firms Travers Morgan/Booz Allen and ACIL Allen and the Ministry of Transport. His Treasury work included bus deregulation. His Melbourne experience included the privatisation of urban train, tram, and bus services.
1 Ministry of Transport: https://www.parliament.nz/resource/en-NZ/53SCTI_ADV_109499_TI1368/cab7f2c16f823871ce272018802a8a52e5706696 2 Greater Wellington Regional Council and Wellington City Council, December 2019, Bus Priority Action Plan.
June 2022
19
Wharf 7 lies in between the Waimata tugboat (left) and the logging ship (right). Photo: Eastland Port
Eastland Port’s Wharf 7 rebuild ready to get underway AFTER YEARS IN THE PLANNING, work will begin soon on one of the most significant parts of Eastland Port’s Twin Berth project. Eastland Port is located in Gisborne, Tairawhiti. The rebuild of Wharf 7 was granted resource consent in December 2020. It’s due to start late March 2022 and will take around 18 months to complete. The cost is an estimated $60 million. “This is a major milestone for the port and the region,” said Eastland Group Chief Operating Officer Regional Infrastructure, Andrew Gaddum. “The original wharf was built in the 1960s and needs replacing. By September 2023, we will have demolished and rebuilt Wharf 7 to create a vital and resilient lifeline asset that will support Taira-whiti’s growing exports. It will be strong enough to accommodate the three new mobile harbour cranes that arrived recently, and will be capable of withstanding a one-in-2500-year earthquake event, providing significant regional resilience in the event of a natural disaster.” Following a competitive tender process, infrastructure construction specialists McConnell Dowell were awarded the contract for Wharf 7. They have more than six decades’ experience on marine and other projects across New Zealand, Australasia and
Asia, and recently completed an upgrade of the Ports of Auckland as part of the Wynyard Edge Alliance.
underway in late March as they begin preparing the site. All COVID-19 health and safety protocols will be followed.
Marty Bayley, Eastland Port’s Infrastructure Manager, is overseeing the project. He said the wharf design had been significantly refined.
“This is a significant logistical exercise for us,” added Mr Bayley.
“We’ve taken the time to work closely with McConnell Dowell to refine and modify our original concepts, and come up with some innovative solutions. The enhanced deckon-pile design will further increase seismic resilience, improve operational longevity, reduce steel use by 70 percent and minimise the environmental impact of the structure. “Following a significant value engineering process collaborating with McConnell Dowell’s engineering team, the refined wharf design only needs 50 percent of the piles compared to the initial design. No hardfill is required anymore. This leaves the seabed below as it is today, without interrupting the rua ko-ura (juvenile crayfish) and local ecology. It also results in 3,300 fewer truck movements through the city. “The piles will now also be drilled prior to driving, so considerably less noise will be generated from the project.” McConnell Dowell will get the project
“We’ll be undertaking the work while continuing to keep the port operational. Throughout the build process we are being mindful of our neighbours, everyone who uses the harbour, the wider community and our customers. We’ll be keeping everyone informed via regular meetings and discussions with key stakeholders, newsletters, updates in the media and online. “We’ve formalised consultative partnerships with the hapru- of Tu-ranganui-a-Kiwa, to ensure cultural values and relationships are considered and recognised. Each of the hapuwere provided all of the project management plans for review and feedback, prior to their approval and construction.” The Wharf 7 rebuild, along with upgrading the slipway, is Stage 1 of the Twin Berth project. The port team continues to develop plans for Stage 2, which would allow two handymax vessels (one 200m and one 185m long) to be able to berth on Wharves 7 and 8 at once. Resource consent applications for Stage 2 will be submitted in the next few months.
20 Logistics & Transport NZ
Auckland Transport expanded its network of video cameras and updated its data platform to better monitor vehicles and serve people in the city. Photo: Hewlett Packard Enterprise
Auckland Transport’s advanced analytics to promote public safety AUCKLAND TRANSPORT (AT) has selected Hewlett Packard Enterprise’s (HPE) GreenLake edge-to-cloud platform to deliver an AI-enhanced video feed to optimise transport routes, promote public transportation, and support decision-making for law enforcement.
injuries. “We use the data to convert people to public transport. We know how long it takes to get from point A to point B by car and we let people know that they can get there twice as fast on the bus,” said Roger Jones, Executive General Manager, Business Technology for AT.
AT is responsible for the region’s transport services including roads, footpaths, public transport, and parking. Its day-to-day activities keep Auckland’s transport systems moving and works to address traffic congestion, encourage more people to use public transportation, and keep citizens safe on roads and in public spaces.
Unfortunately, AT’s former CCTV technology overwrote camera footage after time, while data grows with increased use and more cameras throughout the city. This was problematic for AT with limited scalability of its video management system (VMS) which creates a petabyte of data per week. The agency is also required to save the footage for seven years in case of public safety incidents.
Previously, AT used 2,500 cameras to monitor the city for safety issues creating an everincreasing amount of data. AT was using aging technology, and the ongoing costs of maintenance and outsourced management of the platform were significant. The expansive system was complex, difficult to upgrade, and nearing its end of life. AT needed a cost-effective solution that would enhance productivity and automation as well as encourage more people to use public transport which had been significantly disrupted with the COVID-19 pandemic. It is also one of their goals as a supporter of the Auckland Transport Alignment Project – a multi-agency effort that encourages public transportation use to reduce congestion, environmental impact, and road death and
Their server was unable to support these growing demands and their desire for more sophisticated analytics. If a server went down, AT’s data would be lost. There was also increasing time, labour, and costs incurred to maintain an aging system. Their vision involved bigger plans than the original VMS could support. Therefore, AT transitioned its VMS to a new data platform on one of HPE's servers. This resulted in a 41 per cent rack space reduction – from 68 rack units spread across three racks, to 40 rack units in two racks. With a VMS two-thirds of the size of the original footprint, AT has achieved a 37 per cent decrease in energy consumption and
reduced power and cooling costs, without compromising the system’s capacity to handle unstructured data in the exabyte realm. The modern solution allows AT to avoid upfront IT costs and enables customers to pay only for what is used, while a dashboard reports in real time transport flow, consumption and congestion rate, and compute and storage trends. This data is vital for forecasting and planning to enable people to move seamlessly and safely around Auckland city. In addition, the new solution allows AT to increase its camera usage, supporting 60 per cent more cameras and scaling from 2,500 to 4,000, making parking officers’ jobs more effective and efficient. The reliable file system can handle unstructured data in the exabyte range while also reducing AT’s data centre footprint by 41 per cent and decreasing energy consumption by 37 per cent. “We’re excited to work with AT and deliver a unified, cost-effective solution that uses AI to keep people safe and support their mobility,” said Colin Henderson, Managing Director, Hewlett Packard Enterprise NZ. This is an example of the combined power of HPE Solutions and Qumulo (an American data storage company based in Seattle, USA), delivering unstructured file data at massive scale and performance thanks to select configurations.
