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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