Op-Ed: Transport policy: Greens' new freight policy does not add up
Originally published by the National Business Review, Friday 27 May, 2016
The Green Party wants to double to 50% the share of freight to be transported by rail and sea by 2027. That means moving about one-quarter of total domestic freight off 90,000km of roads on to 3800km of rail and the 16 coastal shipping services.
This combined target of 50% of freight measured by tonnes per kilometre to move by coastal ship or train is a big ask because it is for all freight, not just long distance freight or bulk commodities.
Right now, 14% of all domestic freight is moved by coastal ship when measured by tonnes per kilometre. There are a mere 16 ships travelling the coasts, including the Cook Strait ferries.
More than half (58%) of this coastal freight is petroleum products from the single oil refinery shipped to the rest of the country. Another 26% of coastal freight is cement and fertiliser. The rest is retail and manufacturing goods. Much of that is likely to be cars on the Cook Strait ferries.
Those ferries aside, only two coastal shipping services are more frequent than once a week – the service from Wellington to Lyttelton. Coastal shipping literally misses the boat in timeliness.
Little wonder the Productivity Commission concluded in 2011 that road, rail and coastal shipping were pretty much separate domestic freight markets. They do not compete much at all with each other. Road freight minimises double handling and is as frequent as you are willing to pay for.
One of the few things rail freight is good at is under-cutting much cheaper coastal shipping such as between Auckland and Christchurch with a much higher frequency of service. Most rail freight is to and from industrial plants, mines and ports, often for export.
The Productivity Commission also concluded a good majority of road freight is not contestable at all by rail. The rail network has limited access, it barely exists in the South Island, cannot compete for time-sensitive freight, and is simply not in the game for short-haul freight.
Not surprisingly, the market share of road freight is 90% plus for most types of freight that is not a bulk commodity.
Greens transport spokeswoman Julie Anne Genter claims that “National has neglected rail and shipping.”
In fact, the government has thrown $3.4 billion in good money after bad at KiwiRail with no end in sight. Not only is KiwiRail unable to break even, the government has also given up on its turnaround plan and appears to accept that this is a black hole for taxpayers’ money.
We are on the cusp of driverless truck technology that will revolutionise the logistics and transport industries. Despite that, the Greens would have billions more poured into a 19th century technology.
I’m just a simple country boy who grew up in the back blocks of Tasmania. Like many from the country, I am dumbfounded by the fascination many city folk have with buses, trains and, in particular, light rail.
You city slickers seem to suspend all disbelief about the practicalities of these celebrity technologies. Celebrities are famous because they are famous. Rail seems to have its one-eyed supporters just because trains were exciting parts of their childhoods.
On those long trips up to the big smoke as children, we country folk learned to want to get there quickly and cheaply. Why shouldn’t you?