Change and uncertainty the only constants

New Zealand’s logistics and freight sector is currently in “a little bit of a wait-and-see mode” thanks to the advent of the Coalition government, says sector specialist Chris Dann.

The Anthony Harper partner, who just last week was recognised with a Leading Individual Award from Legal 500 Asia Pacific, points out that with the appointment of Labour’s Phil Twyford as transport minister, along with the Greens’ Julie Anne Genter and NZ First’s Shane Jones as associate ministers, “you’ve got all three coalition partners sitting there with obviously slightly different policy priorities.”

On the plus side, though, “both the incoming government and the industry itself are talking about the same thing” – namely, “the resilience of the network as a key policy concern, in light of the Christchurch and Kaikoura earthquakes in particular, the Auckland pipeline outage and the increasingly higher utilisation of the network in general.”

Thus far, a “mode neutral” approach that seeks the best transport solutions across the modes of land, rail, sea and air, with seamless connections between them, appears to be a coalition preference.

Here again, government and industry appear to be on more-or-less the same page – Mr Dann notes that even the Road Transport Forum (the clue to what it lobbies for is in its name) agrees there’s a need to make road and rail better integrated, to make more efficient use of freight hubs and inland ports.

Then again, even the pre-election draft transport government policy statement put out by then-Transport Minister Simon Bridges – who, along with his colleagues, the new regime likes to tar with an obsession with tarmac – had a “one transport system approach” focus.

“So there’s a lot of resonance in what the new government is talking about, versus what the ministry was already working on,” Mr Dann says.

The question is, of course, how that will manifest in practice.

Some clarity, coming soon
What does seem clear thus far, though, is there’ll be ‘a much greater government focus on coastal shipping and rail.”

Plus, “they’re also talking about a national port strategy, encouraging collaboration and complementary operation between ports,” Mr Dann says.

“That might suggest – which would be consistent with a more left-leaning government – more active involvement from central government, with more of a national planning kind of approach,” although he quickly adds that it “won’t harken back to pre-corporatisation days, I’m sure.”

Still, there is the small matter of the various ports having “a specific statutory objective to be a successful business – and, of course, most of them are owned by local bodies as well.”

So while Mr Dann concedes that “an ‘NZ Inc-ish’ kind of approach has some attraction on an academic level – due to a natural degree of parochialism on the part of councils wanting to protect their respective patches – how it is achieved is a really big question to be answered.”

As such, Mr Dann harbours a strong suspicion the government will have “quite significant challenges” in implementing such a strategy.

The industry should receive at least some of the guidance it’s looking for when the draft transport policy statement – currently under review – is put out by Mr Twyford in the first few months of next year.

It’s unlikely, however, to provide much clarity as far as such technological advances as “digital transformation, AI, automation generally” fit into the equation.

“It’s a massive challenge for the transport sector,” Mr Dann says – not to mention legislative bodies.

With driverless trucks being tested in the United States right now, for example, and some governments already having committed to banning combustion engines within the next 12 years or so, “you can see the government coming under increasing pressure here in New Zealand.”

Yes, “technology can be a real enabler,” Mr Dann says, “and the ministry appreciates that. It’s an obvious route to creating the kind of connectedness that delivers the resilience that’s required.

“So there’s a solution there – but quite what it looks like from a policy and a regulatory perspective we don’t yet know.”

The imperative of trade-focused reform
Although New Zealand should be proud of continued high ranking in the World Bank’s Ease of Doing Business Index, why it is on the slide when it comes to trading across borders, Victoria University’s Business in Asia chairman Siah Hwee Ang observed in a recent article.

“It costs New Zealanders three times as much to import, and more than twice as much to export, as the average in OECD high-income countries,” he wrote.

“And that does not factor in the time required to comply with customs and other red tape, which is far, far higher than the average in OECD high-income countries.”

Government-led reform that reduces “the cost, time and procedures required to import and export … is imperative for a country with both a small market and that is geographically distant from the rest of the world.”

(This story is part of a special advertising feature on logistics and freight)

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