Comment: Freight facts show folly of Government policy

By: Nick Leggett, Road Transport CEO


Freight facts from a recent study makes the Government’s decision to rob the National Land Transport Fund to artificially support rail projects seem short-sighted

October saw the release of a new National Freight Demand Study. This is the first such study in five years and it’s a significant reminder of just how important road transport is to the New Zealand economy.

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The first thing that strikes you is the increase in the overall freight task, which has expanded by around 18% in six years from 236 million to 278.7 million tonnes per year. That’s substantial and illustrates the growth within the New Zealand economy during this time.

What’s really interesting from my perspective, though, is what has happened to the proportional split across transport modes. In 2012, road transport was responsible for 215.6 million tonnes or 91% of freight movements and 70% of tonnes transported per kilometre.

Yet, despite a concerted anti-road campaign and a government elected in 2017 on an anti-road agenda, road freight’s proportion has actually increased in the recent study to nearly 93% of the freight task and 75% when it comes to tonnes per kilometre.

Rail, on the other hand, has retreated from seven to six percent of freight movements and on a tonnes-per-kilometre basis, from 16% down to 12%. Now some of this is down to the Kaikoura earthquake, which knocked rail out in the upper South Island for such a long time, but it also reflects a reduction in rail-suitable commodities such as coal.

The improvement of truck payload efficiency can’t be overstated either. Over the past six years, efficiency gains through the uptake of HPMV and 50 MAX have been realised in dairy, logs, livestock, aggregates, and petroleum distribution.

More than anything else, though, the numbers speak volumes for the ongoing practicality of road over rail. This is not only true in New Zealand but is also the case right around the world.

Even where extensive rail systems exist and less challenging geography than New Zealand, the fact is that road freight transport totally dominates rail. Europe is a prime example of this with countries such as Germany having an even higher proportion of their freight carried by road than we do.

All this makes the Government’s decisions to rob the National Land Transport Fund by using RUCs and fuel excise to artificially support rail projects seem extremely short-sighted. This attempt at forced re-engineering of our transport system to satisfy an ideological whim is not only costly but also flies in the face of economic reality.

It’s even more short-sighted to turn the tap off on new roads critical to the national freight task such as the East–West Link in order to put money into rail projects of dubious economic benefit.

Being based in Porirua, just north of Wellington, I am particularly annoyed at the Government’s downgrade of the State Highway One project from Otaki to Levin. It has been revealed that this is to go ahead as a two-lane road, not the four-lane highway that would have future-proofed it for decades to come.

This is another ideological decision by a Government that seems to have no idea of the correlation between good-quality roads and economic growth.

While the Government would have people believe that fewer trucks on the road is a good thing, it’s not.

It means fewer jobs, less economic activity, and less money in the pockets of farmers, exporters, and other hardworking New Zealanders.

The National Freight Demand Study proves that people and businesses choose the transport mode that best suits their requirements and in the 21st century economy where timeliness and responsiveness is everything, and more often than not, that is the road. The 2017/18 National Freight Demand Study is available at transport.govt.nz.

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