This document summarizes a presentation by Hon Ken Shirley on the role of road transport in meeting future freight demands in the Upper North Island of New Zealand. Some key points from the presentation include: investments are needed to improve and expand the road network; allowing higher productivity trucks would improve access to the network; and improved connectivity between transport modes like truck, train, and ship is important. Market forces, not political intervention, should determine the most efficient mode choice for freight transportation.

1. TAURANGA TRANSPORT & LOGISTICS FORUM
“Unlocking the North Island freight
network for growth”
Bay of Plenty Polytechnic Friday 16 November 2012
Address by:
Hon Ken Shirley
CEO Road Transport Forum NZ
“The likely role of Road Transport in the
Upper North Island Future Freight Task”
Slide 1

2. TOPICS
 Improving and expanding the road network
in the Upper North Island – investment in
roads and funding
 Improving access to the network for more
productive trucks
 Improved connectivity between transport
modes
Slide 2

3. INVESTMENT IN ROADS AND FUNDING
 Decades of under-investment
 RTF supports the overall policy direction
 Emphasis on:
– Economic growth and productivity
– Value for money
– Road safety
Slide 3

4. Investment in Roads & Funding(Cont’d)
 2012-15 National Land Transport Programme
FUNDING $ SPENDING $
Local Body Rates $2,607m Road Policing & Safety $1,026m
promotion
Fuel Excise Duty $4,900m Public Transport $1,736m
(Petrol)
RUC $3,700m Road maintenance and $4,826m
renewal
Motor Vehicle $570m New road infrastructure $4,449m
Registration
Property sales & $270m Systems management $166m
leases
Other: Miscellaneous & debt $77m
Canterbury $155m reduction
earthquake $23m
Super gold card $115m
Debt funding
TOTAL $12.28b TOTAL $12.28b
Slide 4

5. Investment in Roads & Funding(Cont’d)
 2012-15 National Land Transport Programme
Road maintenance and renewal $4,826m
New road infrastructure $4,449m
TOTAL $9,275m
Northland $225m
Auckland Western Ring Route $1,150m
Auckland maintenance and renewal $865m
Waikato (including $590m Waikato Expressway) $1,300m
Bay of Plenty (including $300m Tauranga Eastern $800m
Link)
TOTAL $4,370m
47% to be spent in
Upper North Island
Slide 5

6. Investment in Roads & Funding(Cont’d)
 Some current and future issues:
1. The interaction between
Northport - Whangarei
Ports of Auckland - Auckland CBD
Ports of Tauranga - Tauranga
2. Freight hubs and intermodal connectivity
3. The role of rail and coastal shipping
Slide 6

7. Investment in Roads & Funding(Cont’d)
4. New projects
- Kaimai road tunnel
5. Expanded funding options and mechanisms:
- Distance + mass
distance, mass, time and location
- Tolling
- Reduced dependency on PAYGO
Slide 7

8. HPMV
 The 2010 High Productivity Motor Vehicle
(HPMV’s) amendment to the Vehicle
Dimensions and Mass Rule (VDAM) enables
heavy vehicles to operate under permit at
weights above the standard legal maximum
(typically 44 tonnes) on specified routes
where the bridges are capable of coping with
the additional load
Slide 8

9. (Importance of improving . . . Cont’d)
 Road transport costs in NZ much higher than
other developed countries
 Road taxes in NZ 180-200% higher than
Australia, USA and Canada
 Heavy vehicle road taxes as a percentage of
road expenditure:
NZ - 48%
Australia - 23%
USA - 35%
Canada - 25%
Slide 9

10. (Importance of an efficient . . cont'd)
 Comparison findings:
– NZ comparable freight costs are 25% to 30% higher
than Australia
– NZ B-train freight costs are 90% to 100% higher than
Australia (62 tonne versus 44 tonne)
– NZ higher costs are due to RUC levels and gross
weight limits in NZ
– Australia can afford to pay drivers 30% more
Slide 10

11. COMPARISONS OF ROAD TAXES BETWEEN
AUSTRALIA & NEW ZEALAND
COMBINATION TYPE NEW ZEALAND AUSTRALIA % DIFF
COST** COST**
5 AXLE B TRAIN and 6x4 TRACTOR $34,230 $28,542*** 20 %
6 AXLE B TRAIN and 6x4 TRACTOR $31,570 $30,764 2.6 %
8x4 TRUCK and 3 (or more) axle trailer $34,230 $16,917 102 %
QUAD-AXLE SEMI TRAILER and 8x4 TRACTOR $34,230 $20,914 64 %
TRI- AXLE SEMI and 6x4 TRACTOR $35,280 $20,588 71%
** based on 70,000 km annual travel distance
*** 7 axle B Double- 4 axle B train and 6x4 tractor unit. This was the
closest Australian configuration that could be used as a comparison to
the NZ 5 axle B Train. The 6 axle Australian B Double costs compared
to the NZ 5 axle B Train highlight the cost inequities between AUS and
NZ.
Slide 11

12. HPMV (Cont’d)
Slide 12

13. HPMV (Cont’d)
Slide 13

14. HPMV (Cont’d)
14
Slide 14

15. HPMV (Cont’d)
200 Tonne
Slide 15

16. HPMV (Cont’d)
Increased length
 22m log-truck
 Longer
= Lower
= Safer
Slide 16

17. HPMV (Cont’d)
Slide 17

18. Local Implications of HPMV
 One forest owner alone transports into or
through Rotorua
 @ 44 tonne = 400 loads per week of standard loads
 @ 53 tonne = 300 loads per week of HPMV trucks
 ie. 20 less loaded trucks “per day”
= 40 less truck movements per day on Sala St
Slide 18

19. High Productivity Logtruck
55.8 tonnes – 23.3m – able to cart 3 x 6.1m
Slide 19

20. LOWER BOUND HPMV
 Proposal to refine the HPMV Rule to create a
LB HPMV permit that would enable vehicles
configurations of up to 50 tonnes operate
across all routes accessible to class 1
vehicles (up to 44 tonnes) which do not
require a permit
Slide 20

21. IMPROVED CONNECTIVITY
BETWEEN TRANSPORT MODES
Truck, Train or Ship
Slide 21

22. (Improved connectivity… Cont’d)
FREIGHT MODAL SPLIT IN THE EU27:
MEASURED BY TONNES-LIFTED AND TONNE-KM
100.0%
% OF FREIGHT MARKET
90.0%
80.0%
70.0%
60.0%
tonnes-lifted
50.0%
tonne-km
40.0%
30.0%
20.0%
10.0%
0.0%
ROAD RAIL INLAND
WATERWAY
TRANSPORT SERVICE
Source: Eurostat-2009
Slide 22

23. (Improved connectivity… Cont’d)
 Futility of modal competition debate:
– Political Posturing v Economic Reasoning
 All transport modes need to expand to meet
the projected freight task
Slide 23

24. (Improved connectivity … Cont’d)
Why most freight is moved by truck
1. Geographic flexibility:
– country wide point to point pick-up and delivery
– 93,000 km roads v 4,000 km railway
2. Time flexibility:
– responsive to “just in time” requirements of
customers
– not constrained by railway timetable or shipping
schedule
2. Responsive to unforeseen changes in:
– volume, type, origin and destination
4. Avoidance of transhipping:
– quicker, safer, cheaper
4. Readily adaptable to specialist and unusual
consignments
Slide 24

25. (Improved connectivity … Cont’d)
Trucks are the only way to reach most factories,
stores, restaurants or homes.
“Only 3-7% of the road freight task is contestable by
rail”
Conversely:
“Most of the freight currently travelling by rail is contestable by
road – with the notable exception of coal transport over the
Southern Alps.”
Source: Mackie, Baas and MANZ (2006)
Slide 25

26. MARKET LED MODE CHOICE
 Complex logistics require a market led
response
 Rigid prescriptive planning and misguided
political intervention will result in:
– Massive mis-investment
– An inefficient transport sector
– Bad economic outcomes
Slide 26

27. (Market led mode choice… Cont’d)
 Markets need information:
– Transparency of true and full costs
Choice based on efficient pricing
– No distorting subsidies
– Removal of stifling regulation
Slide 27