13 minute read
Trucking Industry Summit
Trucking Industry Summit 2022
Michael Wood
Minister of Transport, Immigration, Workplace Relations and Safety
“You are the people who day in and day out do the work to get the goods moving around our country, which is so important for our economy and for our communities,” was how Minister Wood kicked off his address.
He expressed his enjoyment in working with a sector with a practical and direct approach, saying that although the industry and the government might not always see eye to eye, understanding each other made working together easier.
Covid-19 was cited as the reason the government’s focus had largely been week to week/day to day for the past couple of years. But Minister Wood said it could now refocus and consider the strategic challenges existing in the freight sector, noting that the weekend of the summit (30/31 July) was when the country’s borders were again open.
He said the government’s commitment lay in a safer, cleaner, more efficient and resilient transport sector. The pandemic, the global fuel crisis, the decarbonisation of the economy and the transport sector itself were huge challenges, and the key to overcoming them lay in working together.
Fuel
Minister Wood said supply-chain constraints and the war in Ukraine were the roots of the fuel-pricing issues. “That’s why in March this year, we did move decisively to do what we could as government through the 36% reduction across all legislated rates of road-user charges.”
He acknowledged that the government didn’t remove all of the impacts, but it did help, saying concessions would remain until 31 January.
He said pressures were persisting longer than the government had hoped and, to date, the cost of the concession to the government was $1 billion. He stressed the National Land Transport Fund (NLTF) budgets had not been impacted and that the government had underwritten the shortfall.
Resilience
Minister Wood said that although the transport sector was adaptable and pragmatic, Covid-19 had demonstrated there was work to do in terms of resilience, with the flow of freight at times “dicey” during the height of the crisis.
The Ministry of Transport has been leading work on addressing that, he said, and it was important there was a coherent strategy across all modes, linked by clear workforce, infrastructure and decarbonisation strategies. He pointed out that if the government and industry worked together, the government, local authority, and the private sector could be guided on investment as we move forward.
Issues
He said the next stage would be analysing and developing a draft supply-chain strategy for release later this year, intending to finalise in early 2023.
The key issues are: • Need to develop a resilient workforce • Need to decarbonise • Need to make sure the supply chain is well integrated.
Minister Wood acknowledged road freight would continue to carry the lion’s share of the freight task, but the supply chain would be more robust if all modes were optimised. Recent investments in shipping and hubs such as Ruakura and Bunnythorpe were all about allowing modes to better integrate. “We see an important role for government in getting that co-ordination working well.
“The government recognises that one of the biggest strategic – and I would say moral – challenges we face is the need to take action on climate change. This isn’t a future problem,” he said, citing unprecedented, repeated, extreme weather events both here and overseas. “Our heavy-vehicle fleet does have an important role to play here, making up about 3.5% of our total transport fleet. But it currently contributes about 25% of total road transport emissions, and that percentage is forecast to increase as the light-vehicle fleet electrifies in the coming years.”
He continued that although roads carried 92.8% of freight volumes,
Michael Wood.
there were real opportunities – cleaner air, reduced reliance on foreign fuel and improved efficiency. He congratulated the sector on its proactive stance during the consultation phase of the ERP (Emissions Reduction Plan) in May 2022, voluntarily increasing the freight emissions reduction target from 30% by 2035 to 35%. “I encourage everyone to be thinking creatively; to be getting on board.
“Government has a role to play as well. In Budget 2022, recognising the challenge in freight decarbonisation, we allocated $20 million from the climate emergency response fund to set up and accelerate responses to the challenges and opportunities in freight transport.” He said the money would go to set up a dedicated unit to address the freight decarbonising issues, and to funding via EECA (Energy, Efficiency and Conservation Authority) for specific lowemissions projects.
Minister Wood acknowledged the sector’s interest in pursuing Euro-6 emissions and said he was working with officials on that, as well as an appropriate incentive regime for low-emissions heavy vehicles.
Infrastructure and maintenance
He continued, saying that no one could be satisfied with current road toll and injury statistics, and safe roads were a key part of Road to Zero, which also included provision for safer speeds and drivers. He said the government was investing $10 billion in the next decade through Road to Zero to ensure progress in the key areas, including investment in safe roads and road maintenance. He said there were 24,000 lane kilometres in the state highway network, up by 10% since 2009/10.
“Our government is committed to investing in high-quality and wellthought-through roading projects that increase resilience and safety across network,” he said, citing Penlink, Takatimu North Link, Manawatu/Tararua and the Mt Messenger bypass as examples, as well as the $1.5 billion invested in the Otaki to North of Levin project.
He did recognise maintenance was an important subject for the sector. On current and impending improvements and maintenance, he cited SH5 Rotorua, SH2 Waihi to Omokoroa, and the Omokoroa Interchange projects, as well as continued targeting of additional median barriers, passing lanes and corner correction across the network. He blamed the previous government for contributing to the current infrastructure and maintenance deficit, saying project completion and looking after the network was essential to meet safety outcomes and the needs of future population growth.
He said the government had increased spending on road maintenance by 46% since coming to office, and the inherited $4.8 billion GPS (Government Policy Statement) on land transport over three years had been increased to $7 billion over the current threeyear period.
He acknowledged there was more to do and said the cost of maintaining a kilometre of state highway had increased by 30% in the past three to four years.
Over the next three months, we will summarise the key addresses from the Trucking Industry Summit 2022 – so if you weren’t there, don’t worry. This month, we focus on the two leading political parties.
Careers
The minister said the government recognised a driver’s licence was a basic requirement for New Zealanders to access work and get into the sector. Currently, many young New Zealanders, especially Maori, Pacifica and those in remote rural locations, had trouble accessing a driver’s licence. He said in Budget 2022, the government allocated $80 million to get an additional 64,000 into the driver’s licencing system via clinics and testing programmes in schools, marae and mobile units in the communities.
He said he wanted to see a clearer pipeline of people into the industry, working with the industry on targeted measures that promoted road transport as a good career option, one that was safe, well remunerated, and attractive.
He noted that immigration had a role but effort had to go into the domestic labour force. New immigration settings would ensure appropriate pathways for criticalneed skillets such as mechanics and auto electricians – two roles the sector indicated were vital. These appeared on the new green list, which is a fast track to residency.
National’s Transport Spokesperson
“Thank you for the role you have played in keeping New Zealand moving in the past two years during the Covid-19 pandemic. Thank you for keeping our goods moving, our supply chains operating, and making sure we have had food on our shelves, and the pharmaceuticals in our pharmacies, and for making sure that those people, particularly in Auckland where I’m from, have been able to stay connected despite having one of the longest lock-downs in the entire world.”
That was National’s transport spokesperson Simeon Brown’s salutation to the summit.
He also acknowledged the cost pressures the industry was under, saying National supported the government’s reduction in roaduser charges. He said that while it had positively impacted cost pressures, it did not address the underlying issues.
Cost pressures and inflation
“The government needs to tackle the underlying causes of domestic inflation and not continue to pour fuel on the fire with its wasteful spending and budget giveaway,” he said. “The government needs to stop adding costs to businesses – they need to remove bottlenecks in the economy and get government spending back under control. They need to ensure there is tax relief for hard-working Kiwis, and they need to ensure the Reserve Bank has a sole focus on inflation. And also, they need to make sure we have an immigration policy and organisation that actually supports businesses rather than putting red tape in the way.”
Brown said that under Michael Wood, Waka Kotahi NZTA has spent $25 million on an office refurbishment during a cost-ofliving crisis, and that sent all the wrong messages. Continuing to spend thousands of dollars on the giant red zeros campaign was a waste of money, he said. Michael Wood and the government needed to take control of the agency, refocusing on core purposes rather than an ever-growing remit of things.
He said the country needed its potholes fixed and for the government to stop wasting our petrol taxes and road user charges. In Labour’s time in office, Brown said the Waka Kotahi NZTA had taken on 1000 additional staff and a growing backroom bureaucracy.
Simeon Brown.
Perception and actuality
“The trucking industry is often criticised for many things – whether it’s people who think there are too many trucks on the road, or the people who say they simply want everything to go on the trains. However, the reality is, 93% of freight in New Zealand is moved by trucks on the road, and that statistic is not going to change any time soon, regardless of how much money the government decides to spend on railways.”
He said trucks were the lifeblood of logistics in New Zealand – and National understood that. “We will be 100% focused on supporting your industry and helping it tackle the challenges ahead,” he said, acknowledging there were big challenges that wouldn’t be solved by spending millions on cancelled cycle bridges, or a $29 billion lightrail system in Auckland that might never get built. Brown emphasised the challenges would be solved by infrastructure that made a difference, citing Transmission Gully and the Waikato Expressway, roads he attributed to the National governments of the past, as examples. National would get back to building infrastructure that made a difference, he said.
“National is listening, engaging, and preparing policy for the 2023 election.
We want to make sure our policies have a vision of taking New Zealand forward, growing our economy and finding practical solutions to the problems we are facing as a country.”
He said he was engaging with councils, representative bodies, and operators to understand what was important. Although not in a position to state particular policies at present, he highlighted three key areas.
The National Land Transport Fund should focus on the best and most efficient infrastructure rather than meeting political goals, and ensure roading receives due maintenance.
Brown said while rail was important, it was not the purpose of the NLTF. It should be funded appropriately via a system that delivered high-quality rail projects, rather than rail receiving a $150 million cheque from the Waka Kotahi NZTA each year. He added that to date, rail had contributed only $7.2 million in track-user charges – the system established late last year.
He said the sector needed to ensure the focus was on the delivery of maintenance and renewals, not just funding, adding Minister Wood had admitted maintenance spend with reduced outcomes.
Resilient regional connections. Brown said the following RNS (Roads of National Significance) projects had been cancelled under Labour; Whangarei to Port Marsden, Mill Road in South Auckland, the East-West Link in Auckland, Tauranga Northern Link, Otaki to Levin, and Christchurch to Ashburton. “What Labour did was not only short-sighted, but they’ve left a massive infrastructure hole for New Zealand.”
He said lockdowns, ballooning
construction costs, and shortages as skilled labour left the country meant Labour’s “Backfill”, New Zealand upgrade programme was also falling significantly short on promised outcomes.
Brown emphasised the importance of the sector in moving freight around the country and to ports, adding that congestion and inefficiency had a direct impact on economic productivity, also implicating the government’s speed reduction programme. “We will have an ambitious policy focused on improving New Zealand’s productivity creating better regional connections with a particular focus on improving regional freight connections around our country.
He said National and Labour both agreed on reducing emissions and the net-zero 2050 target. But National’s pathway there was significantly different, relying less on ideology and more on practicality. Brown said Labour’s emissions reduction plan required a 20% reduction in kilometres travelled by 2035, and that it would soon be sending bureaucrats out to the regions to establish regional plans. “While we have to reduce emissions, that is primarily driven by the industry and technology, rather than simply by driving less.
He said Labour’s ERP contained higher thresholds for new roading infrastructure, requiring them to be consistent with emissions-reduction objectives. “The minister himself has said New Zealanders can expect fewer new roads to be built under this plan.
Brown said policies must incentivise without making it difficult to continue in business.
In his closing comments, he said: “We are working with the transport sector to ensure we are finding the solutions we need for our country to move forward, to have a worldclass transport connection, and to ensure we have a funding model that supports it.”
TM
