OUTSTANDING ACHIEVEMENTSCILT NZ 2014 Awards recognise excellence in transport and logistics

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Volume 13 Issue 2 DECEMBER 2014

nzLogistics & TransportTHE OFFICIAL PUBLICATION OF CILT NEW ZEALAND

Funding for Auckland transport – is user pay the answer?

How leading transport companies are saving fuel and improving safety

Live lobsters fly to export success

$7.50

Volume 13 Issue 2 DECEMBER 2014

nzLogistics & TransportTHE OFFICIAL PUBLICATION OF CILT NEW ZEALAND

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A licensed café allows you to completely relax on board, and panoramic sky-view windows and open air viewing platforms ensure there is nothing between you and the very best of New Zealand.

Book your journey today at

kiwirailscenic.co.nzKiwiRail are proud supporters of CILTNZ

1991 TRS Welcome to NZ-FP_FAlb.indd 1 3/11/2014 12:22:58 p.m.

CHRISTCHURCH – ARTHURS PASS – GREYMOUTH

WELLINGTON – NATIONAL PARK – AUCKLAND

CHRISTCHURCH – KAIKOURA – PICTON – WELLINGTON

See the best of New Zealand by train

Our three iconic train journeys take you through breathtaking landscapes that can only be seen by rail. Roll past majestic volcanoes, encounter the rugged Pacific coastline, traverse the pristine Southern Alps, and do it all from the air-conditioned comfort of our world class carriages.

A licensed café allows you to completely relax on board, and panoramic sky-view windows and open air viewing platforms ensure there is nothing between you and the very best of New Zealand.

Book your journey today at

kiwirailscenic.co.nzKiwiRail are proud supporters of CILTNZ

1991 TRS Welcome to NZ-FP_FAlb.indd 1 3/11/2014 12:22:58 p.m.

Contents

14

13

10

Guest editorial: Diane Edwards 2

CILT NZ Awards 2014 3

Transport Research and Educational Trust Awards 2014 9

Funding for Auckland transport – is user pay the answer? 10

Motorway user charge the best way 12

How leading transport companies are saving fuel and improving safety 13

The role of government in transport fuels 14

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Live lobsters fly to export success 16

In the next edition

The editorial team welcomes expressions of interest for submitting an article for the March 2015 edition of this journal. Contributors should in the first instance contact the editorial convenor, Murray King (email murray.king@xtra.co.nz) to discuss their article.

Deadline for the March 2015 edition: 27 February 2015

ON THE COVERMorris McFall, recipient of the Sir

Bob Owens Award for Outstanding Contribution to the Logistics, Supply

Chain Sector and Community, addresses dinner guests at the annual

CILT NZ awards

LOGISTICS & TRANSPORT NZ IS THE OFFICIAL JOURNAL OF THE CHARTERED INSTITUTE OF LOGISTICS & TRANSPORT NZ

Photo by Jasmyne Chung

3

Published under contract by:

Aston Publishing Ltd PO Box 340173, Birkenhead, Auckland 0746, New Zealand

Fax: 09 480 4768Email: lrichardson@astonpublishing.co.nz

Advertising Contact:CILT national office Tel: 09 368 4970, Email: info@cilt.co.nz

Editorial Contact: Lynne Richardson, Aston Publishing Ltd Tel: 09 481 3005, Email: lrichardson@astonpublishing.co.nz

CILT NZ National Office: PO Box 1281, Shortland Street, Auckland

Tel: 09 368 4970, Fax: 09 368 4971

Disclaimer: This publication is the official magazine of the Chartered Institute of Logistics and Transport New Zealand Inc (CILT NZ). It is published quarterly. All material appearing in this publication is copyright and may not be reproduced without the permission of CILT NZ. The views expressed in this publication are not those of the editorial committee, CILT NZ, its council, officers or Aston Publishing Ltd, unless expressly stated as such.

SPREAD THE WORD ABOUT CILT … If you enjoy reading this magazine and think others would too, please share it with others – leave it on the coffee table at work, or out at reception

Contents

14

13

10

Guest editorial: Diane Edwards 2

CILT NZ Awards 2014 3

Transport Research and Educational Trust Awards 2014 9

Funding for Auckland transport – is user pay the answer? 10

Motorway user charge the best way 12

How leading transport companies are saving fuel and improving safety 13

The role of government in transport fuels 14

The New Zealand vehicle fleet: fact, fiction and fuel efficiency 15

Live lobsters fly to export success 16

In the next edition

The editorial team welcomes expressions of interest for submitting an article for the March 2015 edition of this journal. Contributors should in the first instance contact the editorial convenor, Murray King (email murray.king@xtra.co.nz) to discuss their article.

Deadline for the March 2015 edition: 27 February 2015

ON THE COVERMorris McFall, recipient of the

Sir Bob Owens Award for Outstanding Contribution to the

Logistics, Supply Chain Sector and Community, addresses dinner guests

at the annual CILT NZ Awards

LOGISTICS & TRANSPORT NZ IS THE OFFICIAL JOURNAL OF THE CHARTERED INSTITUTE OF LOGISTICS & TRANSPORT NZ

Photo by Jasmyne Chung

3

Published under contract by:

Aston Publishing Ltd PO Box 340173, Birkenhead, Auckland 0746, New Zealand

Fax: 09 480 4768Email: lrichardson@astonpublishing.co.nz

Advertising Contact:CILT national office Tel: 09 368 4970, Email: info@cilt.co.nz

Editorial Contact: Lynne Richardson, Aston Publishing Ltd Tel: 09 481 3005, Email: lrichardson@astonpublishing.co.nz

CILT NZ National Office: PO Box 1281, Shortland Street, Auckland

Tel: 09 368 4970, Fax: 09 368 4971

Disclaimer: This publication is the official magazine of the Chartered Institute of Logistics and Transport New Zealand Inc (CILT NZ). It is published quarterly. All material appearing in this publication is copyright and may not be reproduced without the permission of CILT NZ. The views expressed in this publication are not those of the editorial committee, CILT NZ, its council, officers or Aston Publishing Ltd, unless expressly stated as such.

SPREAD THE WORD ABOUT CILT … If you enjoy reading this magazine and think others would too, please share it with others – leave it on the coffee table at work, or out at reception

XXXXXXXXXXXXXXXXXXXXXXXXXXX

Xxxxxxxxxxxxxxxxxxxxx by Xxxxxx Xxxxxx

I would like to start by thanking CILT for inviting me to speak at its recent forum in Wellington. My focus then was on the importance of gender diversity for the Ports of Auckland change journey. Continu-ing on this theme I would again like to send a strong message about diversity. Diversity is a buzz word for our industry at present, but I am afraid that for many, there is little more than lip service being paid to such an important subject. Until we wake up and realise the significant contribution diversity can have to business success, it may never really be taken seriously.

Diversity is about more than just recruit-ing and/or promoting more women. It is about embracing different perspectives, challenging old ways of thinking, and accepting that what might have brought success in the past may not be relevant to our industry’s future.

Divergent thinking may come from a number of sources. Gender is just one source of diversity, but there are others that are equally important. For example, there are huge benefits in leveraging gen-erational differences, cultural diversity and even diversity of experience.

Past experience, new challengesExperience is perhaps one of the most overlooked aspects of diversity. How often, when we recruit, do we seek out those who already have experience in our industry, or

those who have done the same or a similar job before? Research consistently shows that past performance is not a predictor of future success unless what is required in the future is what has been done in the past.

We live in a changing world and what we need are people who can change and adapt to the new challenges ahead. Often these are people who can bring past experience in a different environment and use the les-sons learned to inform the new situation in which they find themselves.

Of course, with industry experience comes strong institutional knowledge and invaluable wisdom. I would argue that this is something that is vitally important to the success of any company. For us, an in-depth understanding of logistics, transport, ship-ping and related aspects of our industry is essential. Yet I would also argue that pairing this wealth with different experi-ence and perspectives is what may elevate a company from good to great.

The left-field thinking this can bring will stimulate innovation and business creativ-

ity, and build the strength and resilience to face chal-lenges that may arise from

changing business models, new regulation, evolutionary technologies, increasing customer expectations, and other drivers of change.

Leveraging differenceThe strength of diversity lies in being open to the ideas of others, even when they dif-fer from your own. It is in recognising that challenges can be addressed from a range of different angles, that there may be more than one way to achieve a goal, and that different people bring different strengths which can be synergistic in nature.

So diversity is about leveraging differ-ence. It is not a numbers game. Reports on the number or percentage of women, ethnic makeup and age ranges in your com-pany may be helpful to track progress, but only if the practices underpinning move-ment in the figures are sound. Tokenism, quotas and condescension, whether overt, unspoken or unconscious, will not bring the benefits sought from diversity.

I would like to advocate that as our industry enters an unprecedented period of change, diversity is not a fad or a ‘nice to have’. It is the key to competitive advan-tage. Ignore it at your peril.

Embracing divErsity

Guest editorial – Diane Edwards

Logistics and Transport New Zealand wishes to formally acknowledge the following organisations for their national sponsorship of CILT NZ. It is because of this support that this forum for transport and logistics professionals is possible.

Diane Edwards is the general manager, people and processes, at Ports of Auckland where she is responsible for leadership development, change management, process improvement, Lean Six Sigma and project sponsorship, and as well as overseeing the HR and administration function

2 Logistics & Transport NZ

Ports of Auckland is on a journey of change where diversity is being celebrated

Awards for academic and research studiesFrom the institute’s inception in 1919, its role worldwide has been a simple one – education. This set of awards acknowledges that role, with awards to a number of students who achieved excellence at their chosen levels.

Award for the best undergraduate level project on a logistics and transport topic submitted for academic credit in an accredited tertiary academic institution in New Zealand, or supervised by a registered member of CILT NZ teaching in an accredited foreign academic programme involved with logistics and transportSponsored by CILT NZ, represented by Chris KisslingRecipient: SARA SADIQ AL NAJJARDr John Webb (a NZ registered member of CILT), head of the School of Logistics and Maritime Studies at Bahrain Polytechnic in the Kingdom of Bahrain, nominated Sara, whose project topic was titled ‘Assessing the Effectiveness of Internal Communication in the Road Network Department of DHL Bahrain’.

The judges considered the topic was well conceived, grounded in the literature, structured using appropriate methodologies, and well executed in terms of analysis, within the bounds of acknowl-edged limitations on data collection. They said, “The student shows promise and should be encouraged by her supervisors to consider reading for a master’s degree.”

Zahra Khalil Mayoof received a commendation from the judges;

Zahra was also nominated by Dr John Webb and is also studying at Bahrain Polytechnic.

Award for the Logistics Training Group’s top graduate in the CILT-UK Professional Diploma in Logistics & TransportSponsored by the Logistics Training Group, represented by Walter GlassRecipient: ANNIE (THUY) PHAM

“Annie Pham was an outstanding student who completed her CILT-UK Professional Diploma in Logistics & Transport extremely quickly, producing work of a consistently high standard across all subject areas of her studies,” says Walter Glass. “Annie emerged as the top graduate for 2014 after close evaluation of work from three excellent candidates. She has demonstrated her diligence in both her studies and in her workplace activities, completing an in-house project as part of her qualification that will potentially bring year-on-year savings to her company. While her main role is in procure-ment, she has extended her skills across several logistics activities, undertaking other logistics functions as required.”Annie was also the recipient of the Award for overall outstanding achievement in a CILT qualification completed in the previous academic year in New Zealand, or elsewhere if the nominee is a student taught by New Zealand registered members of CILT. This award was sponsored by Dexion New Zealand, represented by Richard Smart.

OUtstanding acHiEvEmEnts

CILT NZ Awards 2014The annual CILT NZ Awards recognise outstanding achievements within the transport, logistics and supply chain sectors, and are made for the 12 months ending 30 June each year.

Chris Kissling with Sara Sadiq Al Najjar (centre), winner of the award for the best undergraduate level project, and Zahra Khalil Mayoof, the runner-up

Richard Smart, of Dexion NZ, with Annie Pham, winner of the award for the top graduate in the CILT-UK Professional Diploma in Logistics & Transport and the award for overall outstanding achievement in a CILT qualification, with LTG director Walter Glass

Photography by Jasmyne Chung

December 2014 3

This year’s awards were held at the Intercontinental Hotel in Wellington and were hosted by the Central Section. CILT NZ president, Chin Abeywickrama, welcomed everyone to the evening and introduced the MC for the night, Geraldine Brophy, an award-winning actor with numerous television and film roles within New Zealand.

The awards are divided into three sections. The first section is for academic and research achievements; the second for commu-nications and industry achievement; and the third for excellence.

CILT NZ acknowledges the time and effort of Professor Chris Kissling as the awards convenor, and the other awards judges: Leslie Brown and Dr Jean-Paul Thull for the academic awards; Brian Stocking, Dave Corlett and Steve Bateman for the industry awards; and Chin Abeywickrama and Russell Kilvington for the excellence awards.

Geography. His thesis was titled ‘Using a Natural Experiment to Assess the Effect of Spatial Barriers on Health Service Utilisation’.

The closure of the Manawatu Gorge in August 2011 caused a change in the travel time for patients living in the eastern area of the Mid Central Health District to health services located in Palm-erston North. This presented an opportunity to study the effect a change in travel time and spatial access had on a population before and after such an event.

The judges said the study used a retrospective cohort design using routinely collected data from general practice, emergency department, hospital admissions and outpatient services. The investigation was completed using novel geospatial information systems methods to produce high-fidelity data for analysis with free and open source software by developing and validating two new methods of improved geocoding data quality and a new travel time prediction model. In recognition of its quality and strengths, the work received an A grade.

Awards for communications and industry achievementThese awards acknowledge specific achievements within the trans-port and logistics industries.

Award for the Most Meritorious Published Article in a New Zealand PublicationSponsored by CILT NZ, represented by Chin AbeywickramaRecipient: NIGEL PARRYThis award is for the best article, or series of articles, on an aspect of supply chain management, logistics or transport. The three arti-cles identified as the basis for this nomination were all published in FTD magazine (in July and October 2013 and June 2014). FTD editor

Award for overall outstanding achievement in programmes with a focus on transport and logistics taught in New Zealand leading to a postgraduate level certificate or diploma or degreeSponsored by CILT NZ, represented by Chris KisslingJoint recipients: FORTUNE TLAPI and ROWAN DUNNThis year’s nominations are all in connection with postgraduate diploma studies, and the joint winners are both Massey University graduates nominated by Paul Childerhouse who did not attempt to rank them.

The judges emphasised that the critical aspect of this award is the attainment of high overall academic grades in the course as a whole, with a research project only one element in that total pic-ture. “Fortune obtained the highest GPA (grade-point average) last year in the programme and graduated with distinction whilst hold-ing down a job,” the judges said. “Rowan scored best in the course on integrated logistics and, in the opinion of Paul Childerhouse, submitted an outstanding research proposal. There are differences in writing style, but it will be their masters’ theses in the future that will possibly split them on academic merit.”

The Ministry of Transport Award for outstanding achievement at master’s level, in a dissertation or thesis with a focus on transport planning and policy, or transport and the economy, or supply chains and logistics, or transport and environmental issues, or some combination of these broad areasSponsored by the Ministry of Transport, represented by Martin MatthewsRecipient: JAYDEN MACRAEJayden was supervised by his nominator, Professor Simon Kingham, and studied at the University of Canterbury’s Department of

Chris Kissling presents Fortune Tlapi (centre) and Paul Childerhouse (who collected the award on behalf of Rowan Dunn) with the award for overall outstanding achievement at a postgraduate level

Martin Matthews, CEO of the Ministry of Transport, with Jayden MacRae, winner of the award for outstanding achievement at a master’s level

4 Logistics & Transport NZ

Lawrence Wong (left) of Auckland Transport, and Peter Quigg of MIT (right), winners of the Award for Public Transport Innovation, with Chin Abeywickrama

Nigel Parry, winner of the Award for the Most Meritorious Published Article in a New Zealand Publication

Matthew Foster, of Synlait Milk, winner of the Award for the Most Meritorious Presentation, with Chin Abeywickrama

Lynne Richardson nominated Nigel, saying, “The articles are writ-ten in a clear manner, backed by research-based facts, on topics relating to fatigue, the impact of droughts, and promoting from within an organisation. All are of real relevance and interest to our industry. Authors like Nigel make an important contribution to the dissemination of knowledge both within and beyond the industry.”

Award for the Most Meritorious PresentationSponsored by Kissling Consulting, represented by Chris KisslingRecipient: MATTHEW FOSTERThis award is for the most meritorious presentation to a New Zea-land supply chain, logistics or transport forum, or a CILT meeting. Matthew, of Synlait Milk, held a 30-plus audience’s attention that included members and guests spilling out into the foyer of the venue. It generated a flood of questions and discussion. It was backed by the use of excellent graphics, including videos, and fronted by Matthew who clearly knew the business he is in, its his-torical progress and its vision for the future. The judges said, “Such presentations educate all the stakeholders, and promote coordina-tion and cooperation along supply chains.”

Philip King, from the Tauranga City Council, and John McCarthy, from the NZ Transport Agency, were also recognised for their joint talk on the regional Smart Growth Strategy. “Mentioning a second place is indicative of how this award was closely run,” said the judges.

Award for Implementation and PracticeThis is awarded to the organisation or team that has demonstrated sustained excellence in supply chain management, logistics, trans-port implementation and/or practice, including transport planning,

with special emphasis on building relationships and developing strategic partnerships.

No nominations were received for this award for 2014. The judges said, “There are organisations that do show sustained excel-lence that would qualify for this award. Building relationships and strategic partnerships should make gathering testimonials easy. There will be some who might well say, ‘Why didn’t we put in for that?’ Well you still can – next year, after adding another year to your amazing record.”

December 2014 5

Richard Smart (left), of Dexion NZ, with Mark Rogers (centre) and Paul Harper of Netlogix, winner of the Award for Supply Chain Innovation

Award for Public Transport InnovationSponsored by CILT NZ, represented by Chin AbeywickramaRecipient: AUCKLAND TRANSPORT and MANUKAU INSTITUTE OF TECHNOLOGY, represented by Lawrence Wong and Peter QuiggThe award recognises notable innovation in any aspect of public transport in the New Zealand transport sector. The judges said, “The nomination for the Manukau Transport Interchange and the MIT Learning Facility captures positive interaction, engagement and change. The location is in the heart of a most culturally diverse region and the design encourages a sense of connection, comfort and ownership across all groups. Connecting transport with educa-tion helps engage successive generations to think about transport hubs that work. This smart building also acts as a catalyst for asso-ciated developments in Manukau.”

Award for Supply Chain InnovationSponsored by Dexion NZ, represented by Richard SmartRecipient: NETLOGIX, represented by Mark Rogers and Paul HarperThis award recognises notable innovation in systems and technol-ogy in the New Zealand supply chain sector. Netlogix is an information and knowledge-based logistics solutions provider. The introduction of state-of-the-art technology platforms supported by depth of experience within a specialised team has brought about a step change in the national distribution of Carter Holt Harvey products. The judges said, “Netlogix’s innovative supply chain solution enabled CHH to access the small carrier segment which makes up more than 90% of the New Zealand carrier market. Those carriers can also access CHH’s ERP systems. The outcome is a real cost and service value proposition for customers and asset utilisation value propositions for carriers, coupled with wider environmental and socio-economic benefits such as reduction in carbon footprints.”

Award for Safety, Security and Environmental InnovationSponsored by CentrePort, represented by Steve HarrisRecipient: WASTE MANAGEMENT – Health, Safety & Training Team, represented by Guy SmithThis award recognises the best safety, security or environmental innovation in supply chain management, logistics and/or transport. This nomination acknowledges issues associated with driver behav-iour and the need for ways to improve it. Waste Management’s process involved psychometric profile testing, analysing results, and deploying targeted training and performance management and recruitment methods. Pre-employment driver checks are now mandatory as is enforcement of driver conduct. Training included a well-attended awareness road show explaining the campaign. The judges said, “The outcomes include a reduction of monthly spend on insurance claims by 84% and the actual number of claims by 52% in the year ending June 2013. Code of conduct awareness has brought about positive changes to the business culture.”

The Energy Efficiency and Conservation Authority (EECA) was awarded second place for its heavy vehicle fuel efficiency pro-gramme. “Again, a mark of the quality of nominations was our call to indicate a second place,” the judges said.

Steve Harris of CentrePort (left), with Guy Smith of Waste Management, winner of the Award for Safety, Security and Environmental Innovation

6 Logistics & Transport NZ

Before taking up his position with CIAL, Nick worked for Lyttelton Port of Christchurch (LPC) and was involved in the programme management office, coordinating projects and programmes to handle the growth in cargo while operating with reduced capacity across infrastructure due to earthquake damage. He has recently completed a master’s degree in logistics and supply chain management involving a dissertation focused on container port productivity and the use of inland hubs.

The judges concluded that Nick has a significant number of sepa-rately and individually worthy achievements and, furthermore, achievements across different transport modes. “He has packed much into his young career so far and can rightly be proud of the commendations received,” they said. Nick is an active member of CILT and a member of the Southern Section committee.

The Norman Spencer Memorial Medal for Contribution to Transport and the InstitutePresented by Chin Abeywickrama, CILT NZ presidentRecipient: DR MURRAY KINGThis award is a memorial to Norman Spencer, the first chairman of the New Zealand division of the Chartered Institute of Transport, 1959–1962, and recognises a person of the highest calibre from

Nick Flack, CILT NZ Young Achiever of the Year 2014

Young Achiever of the Year Sponsored by Port of Tauranga, presented by Chin Abeywickrama, CILT NZ presidentRecipient: NICK FLACKThe purpose of this award is to provide an incentive for and recog-nition of individuals who are actively involved in the day-to-day operation and development of transport and/or logistics in New Zealand. It is open to anyone under the age of 35 years as at 1 Janu-ary following the year of nomination. Nominees are based on a number of criteria, including personal achievement, the impact of their contributions to the transport and logistics industry, creative-ness and professionalism. They must have demonstrated leadership and/or organisational skills, and have proven project or programme implementation skills.

Nick was nominated by his employer, Christchurch International Airport (CIAL). In support of his nomination, Rhys Boswell, general manager – strategy and sustainability, at CIAL, says, “Over the past 12 months, Nick has successfully led large infrastructure develop-ments with high public visibility, showing maturity in communica-tion and leadership across a diverse range of stakeholders. Nick has also made significant contributions to the commercial, operational and planning facets of Christchurch Airport.”

Dr Murray King, recipient of the Norman Spencer Memorial Medal for Contribution to Transport and the Institute, with Chin Abeywickrama

Awards for excellenceThe following awards are only made to those individuals of the very highest calibre.

December 2014 7

person of the highest calibre is recognised. The person is to have made an outstanding contribution to the supply chain/logistics sector, as well as contributing to the community and other organi-sations.

Morris is a fellow and life member of CILT NZ. He prospered as a passionate businessman, becoming well known and esteemed in services to farming, logistics and supply chains, promoting col-laboration and productivity improvements, including reduction in waste. He is considered an industry statesman.

His community service has previously been recognised within Rotary. He established a ‘blokes’ shed’ where he could indulge his passion for collecting and restoring vintage tractors, cars and stationary engines, and was not the only ‘bloke’ who enjoyed it. So closely is he involved in the industry that it is said he must have diesel coursing through his veins which reflects his career in the fuel and lubrication industry.

Some of his many philanthropic activities include being a current active supporter and sponsor of Waipuna Hospice and the Heli-

within the transport and logistics sectors. The person is to have made an outstanding contribution over time to the sector, as well as contributing in a meaningful way to the activities of the institute.

Murray has worked for many years at the highest level in a major New Zealand transport and logistics organisation and was part of several major transformations of ownership, organisation and operation. More recently, he has had an equally distinguished record as a transport consultant, including several projects of national significance.

He has devoted considerable time over a long period to CILT in numerous capacities. He has held leadership positions at council level from before the merger between the CIT and the institute took place in 2002, and is a past president of CILT. He has applied his broad and specialist academic skills and business acumen for the good of the profession. He has held a variety of managerial positions, been appointed as a transport expert on local govern-ment committees, and has acted as a director in the communica-tions sector and as a company secretary responsible for all legal work (contracted to a major law firm), safety secretariat and policy, property, corporate communications, security, environmental policy, and business planning. Industry and government agencies have called upon him as a consultant.

He has helped promote research through the institute’s trust. He has contributed to advancement of students in the field of transport and logistics by helping develop course materials for academic degree-level qualifications. He is still a guardian of standards and ethics within the institute, and is a fellow of several institutions. “Murray is truly a multidisciplinary person and friend to many, who meets all the criteria for this excellence award,” the judges said.

The Sir Bob Owens Award for Outstanding Contribution to the Logistics, Supply Chain Sector and CommunityPresented by Chin Abeywickrama, CILT NZ presidentRecipient: MORRIS MCFALLThis award is a memorial to the late Sir Bob Owens, one of the industry’s most respected leaders. The award is only made when a

Graduates of the Leaders for the Future programme (L–R): John Humphrey, Adam Harvey, Greg Pert, Jonathan Hulme, course director Jo Brosnahan, programme leader Vicky Pond Dunlop, Richard Mears and Kiri McRae

8 Logistics & Transport NZ

Morris McFall, recipient of the Sir Bob Owens Award for Outstanding Contribution to the Logistics, Supply Chain Sector and Community, with Chin Abeywickrama

The CharTered Institute of Logistics and Transport is associ-ated with a trust, the Transport Research and Educational Trust, which is a registered charity and makes grants to individuals and organisations involving or relating to transport, including logistics.

The trust awards two different types of grant in alternate years, either a number of small grants for personal development in trans-port and logistics, or a larger grant for a research project. The total value of the grants depends on funding. This year the awards will be for personal development, and the trust is likely to make three awards of about $3000 each.

The trust’s aims are to promote, encourage and coordinate the study and advancement of transport within New Zealand. Provided these aims are met, and the grants are within the educational and charitable purpose of the trust, there is no limit on the nature of the grant, or the industry branch or discipline the applicant is involved with.

Awards are available to people of all ages and all levels of experience in logistics and transport. For example, the trust can make grants towards the cost of mentoring or the leadership course that CILT has recently introduced, or other educational or training courses, and purchase of books or other educational materials. Funding may be available for other opportunities, so

applications need not be restricted by this list.Further details on the personal development grants are in the

‘Inspire’ brochure on the institute’s website at www.cilt.co.nz Applications are now open, and will close on 8 December 2014.

Application forms are available from the CILT NZ national office.The trustees are Murray King (the acting chair), John Anderson,

Jon Butler, Sharyn Forsyth, Tony Gollin, Jon Kelly and Cormac McBride.

Transport Research and Educational Trust Awards 2014

Vacancy for a trustee The Transport Research and Educational Trust may have a vacancy for a trustee in the near future. People interested should contact the acting chair, Murray King, at murray.king@xtra.co.nz.

Trustees must be members of CILT NZ and meet the require-ments for officer certification under the Charities Act 2005 (see www.charities.govt.nz for information).

copter Trust. He has in the past supported and sponsored the Outward Bound programme. He is a JP, and a life member of the NZ Contractors’ Federation, and has served as a regional councillor and chairman of regional land transport, public transport and road safety committees.

“A mark of this man is seen in his dedication to family when at age 79, he and his wife embarked on a world tour with their wheel-chair-bound tetraplegic son. That was some logistics undertaking!” the judges said. “His collective sponsors regard him as a ‘good bugger’ of undoubted eminence in our industry and very worthy to receive this particular excellence award.”

Recognition of othersCarol Hullah and Ying Xie were the successful protégés who applied for the CILT NZ mentoring programme, sponsored by

Pacifica Shipping and Ports of Auckland. They now have the opportunity to liaise with an assigned mentor over a period of time, which will provide them with access to new perspectives and strategies, thus increasing their potential to fast-track their careers.

David Kriel and Cormac McBride, both from the Central Section, were also recognised for their work in developing the new CILT NZ website.

Leaders for the FutureGraduands from the inaugural Leaders for the Future programme were introduced to the dinner attendees and were presented with their graduation certificates. Course participant Adam Harvey gave a collective speech on behalf of the graduands, and programme leader Vicky Pond Dunlop (also a professional singer) wrapped up the evening with a song.

December 2014 9

Carol Hullah (left) and Ying Xie (right), recipients of the mentoring sponsor-ship from Ports of Auckland and Pacifica Shipping, with Dr Jean-Paul Thull

David Kriel (left) and Cormac McBride were recognised for their work in developing the new CILT NZ website

10 Logistics & Transport NZ

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by Xxxxxx Xxxxxx

In April 2014, the Auckland Council set up an Independent Advisory Body (IAB) to investigate alternative funding sources for trans-port (roads, rail, public transport and active modes of cycling and walking). The IAB consisted of 13 people from across Auckland, including businesses, unions, environmental, infrastructure, public transport, road carrier, walk, cycle, land care and low socio- economic interests. The IAB’s report ‘Two Pathways’ was released on 29 October. It can be viewed in full at www.shapeauckland.co.nz/longtermplan

The IAB was asked by the council to pick up the work that was done by the Consensus Building Group in 2012/13 and take it a stage further to come back with specific, researched and costed proposals for two funding pathways for the council to consider for inclusion in the its 10-year Long Term Plan (LTP).

The LTP is due to be released in January 2015 for consultation across Auckland, with a decision on the chosen pathway in June 2015. There are two key questions: whether Aucklanders are pre-pared to pay more for transport improvements, and – if so – which pathway they favour.

Recommended pathwaysThe IAB’s task included re-examining the funding gap and investi-gating the existing methods and the road charging pathways in sufficient detail to be able to identify two preferred pathways and their implications. With help from Peter Winder and the project team, as well as Deloittes, Gravitas and ME Consultants, this was achieved.

The two pathways recommended to the council are ‘rates and fuel tax’ and a ‘motorway user charge’. The IAB’s conclusions are the result of extensive work to determine what increases and/or new charges would be required to meet the funding gap.

Having examined the population growth that Auckland is facing (see Figure 1) and seen the models of the impacts on the transport system, the IAB was unanimous in its agreement that Auckland needs a better transport system. To achieve that, Aucklanders will need to commit to a higher level of investment because without that, the gap between the revenue coming in from rates and fuel tax falls way behind the cost of the projects which are in the 30-year Auckland Plan.

Mayor Len Brown has announced his proposal for two levels of investment: a ‘basic’ transport programme, which existing funding can afford, or the fully integrated transport system outlined in the Auckland Plan. The IAB is very clear that the basic transport net-work, which would not require alternative funding, is unacceptable. To achieve the Auckland Plan transport network, the IAB estimates that the quantum of additional funding required is around $300 million per annum in current dollars (see diagram). Adjusted for inflation, that will provide for the $12 billion funding gap over the time of the 30-year Auckland Plan.

Pathways explainedThe ‘rates and fuel tax’ pathway, which has been recommended for

inclusion in the LTP, includes fuel tax, road user charges, tolls on new roads, property rates, the development charge and public transport revenues. The calculations undertaken show that there would need to be an additional 1 cent per litre increase per annum in the fuel tax and a further 1% increase per annum in proposed property rates over and above what has already been signalled by the government and council – all of which would need to be dedicated solely to transport.

The ‘motorway user charge’ pathway, which the IAB has recom-mended, is a charge for the use of the motorway. Consideration was also given to a single cordon around the CBD, a single cordon around the isthmus, and a motorway charge based on the distance travelled. These were all rejected on the grounds of community impacts, complexity and unfairness.

The motorway charge has two optional approaches: either a flat rate of around $2 per entry from 6am to 7pm or a peak demand rate, being higher in the 7am–9am and 4pm–6pm peaks ($2.80), with a lesser charge on the shoulders of the peaks ($2) and a lower $1.30 charge between 10am and 3pm (see table). There would be no charge for night use under either of these options and the week-end day charge would be at the lower level.

Funding for Auckland transport – is user pay the answer? By Stewart Milne

dElivEring aUckland’s fUtUrE

Aucklanders will have to decide whether they are prepared to pay more towards their future transport system, either through increased rates and fuel taxes or a motorway user charge

10 Logistics & Transport NZ

December 2014 11

Either the ‘rates and fuel tax’ pathway or the ‘motorway user charge’ would build up to raise the required additional funding of $300 million per annum.

Impact on householdsThe IAB sought and received extensive advice on the impacts on households of these proposed charges. The impact on the average household under both pathways is similar – around $350 per annum. But averages can be misleading – impacts vary considerably.

The ‘rates and fuel tax’ pathway would have less variation from the average because the rates portion would be spread across all households and the fuel tax across all vehicle users. However, in terms of fairness, there would be some people paying increased rates who do not even own a vehicle or use public transport.

Frequent motorway users account for 6–8% of Auckland’s house-holds and would be contributing around 28% of the required addi-tional revenue under the ‘motorway user charge’. However, they would be the main beneficiaries of travel-time savings.

Economic benefitsThe economic analysis undertaken for the IAB showed that the Auckland Plan transport network provides strong positive economic benefits compared to the basic transport network. With benefits exceeding costs, there is a sound economic justification for the higher level of investment.

A high level of investment is required to address current issues and respond to future growth. However, analysis indicates that, even with the additional funding, maintaining the current performance of the transport system is unlikely. Be that as it may, the situation that will develop without additional funding will be dire.

If Aucklanders commit to the higher level of transport investment which is required to implement the Auckland Plan, the report pre-sents two achievable pathways. The ‘rates and fuel tax’ pathway is simpler to introduce. It can be achieved at low cost with little or no legislative change, and it spreads the financial burden broadly across Aucklanders. The revenue it raises is predictable, at least in the short term, and it provides small but useful benefits to the transport system.

A ‘motorway user charge’ is more complex to introduce, expensive to implement and requires legislative change. However, it delivers a comparatively better transport system performance, and aligns the costs with those who use it and delivers them the benefits in return.

Under either pathway, a small number of Auckland’s most vulner-able households would face greater financial hardship. The report points out that the most effective ways to mitigate against the severity of either pathway are to keep new charges low and afford-able, and to ensure provision of reliable safe and cost-effective alternatives, such as improved public transport and walking and cycle lanes.

The IAB pointed out that the ‘rates and fuel tax’ pathway is the more regressive approach as it takes a proportionally greater amount from those on low incomes. On the other hand, it is simpler to intro-duce and administer. A ‘motorway user charge’ provides a long-term

funding solution and has secondary congestion benefits, although it is significantly more complex and costly to implement.

The way forwardThe primary purpose of the IAB’s work was to identify two pathways that could raise sufficient revenue. They were not asked to come up with a pathway that influences road use, but a pathway that achieves both clearly has merit.

In presenting the report, the chairman pointed out that in the past, Auckland has lacked (and has suffered from the lack of) an Auckland consensus on a way forward for addressing transport funding issues. However, the report – which has been agreed by IAB members who have been drawn from a wide sector of inter-ests – should now provide a way forward for the council to consult with Aucklanders through the LTP process to get agreement on the preferred pathway to achieve the funding that is required to keep Auckland moving.

The Auckland Council now has the task of deciding whether to make any adjustments to these pathways before including them in the LTP. The LTP will then be released for consultation to allow Aucklanders to decide whether they are prepared to pay more towards their transport system and, if so, whether that money

should come out of increased rates and fuel taxes or a motorway user charge.

December 2014 11

Stewart Milne chaired the Independent Advisory Body and the Consensus Building Group; he has been a Ministry of Transport Secretary and an international president of the Chartered Institute of Transport

LTG contact: Tessa PO Box 1401, Palmerston North 4440

email: info@LTG.co.nz phone: 06 351 4406

www.LTG.co.nz

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Logistics and Transport NZ is the official quarterly publication of the Chartered Institute of Logistics & Transport New Zealand, and is widely read by decision-makers within the logistics and transport sectors.

Stephen Selwood is the chief executive of the NZ Council for Infrastructure Development (NZCID)

The IndependenT Advisory Body (IAB) report to Auckland Council on future trans-port funding options for Auckland identifies two possible pathways. A variable motorway user charge of around $2, higher at peak and lower off-peak, is the best way to fund and manage Auckland’s transport system.

Managed correctly, variable charging will enable motorways to run much more smoothly, like they do in the school holi-days. People will choose to travel at differ-ent times, go another way, ride-share, walk, cycle or take public transport. That means those who pay the toll will benefit through a faster trip on the motorway, meaning better productivity for businesses and less time wasted in log-jammed motorways for commuters.

The money raised will support new investment in motorways, local roads, walkways and cycleways, and public trans-port services that would not otherwise be possible. The more people who choose alternatives to motorway travel because of the tolls, the better it will be for motorway users who choose to pay a toll.

Serious congestionFrom a New Zealand perspective, the most important thing to note is that the eco-nomic benefits of motorway user charges are more than three times greater than the rates and fuel tax pathway. That’s because direct charging changes behaviour more significantly than increases in general taxes.

Doing nothing or deferring a decision would be unwise. The work of the IAB clearly shows that failure to raise the extra $300 million per annum needed to invest in the future transport system will lead to serious congestion across Auckland, much worse than today. While investment and

charges will not ‘solve’ congestion in a growing city, they will enable us to manage growth far more effectively. The longer we take to decide, the bigger the problem in the future will be.

The IAB did not specifically recommend either of two funding pathways – rates and petrol taxes, or a motorway user charge – but it clearly sees merit in the motorway user charge because it will both raise the money needed and help reduce congestion on the motorway system.

There will be a need to add capacity to some arterial roads to handle additional traffic, but the transport modelling shows that traffic diversion onto arterial roads is manageable.

The system will use number plate recog-nition technology identical to that already in use on the Northern Gateway toll road.

Cordon schemes like London and Stock-holm were discounted because, unlike motorway charges, there would be no option to go another way, the camera gan-tries would have high visual impact in local communities, and cordons would seriously distort travel behaviour inside and outside of the ring.

Support for tollsBacking motorway charges over rates and petrol tax increases is consistent with a Horizon market research poll commissioned by the NZCID in 2012 which clearly showed that Aucklanders will support low-level vari-able tolls on Auckland’s motorways, if this reduces congestion and helps fund major transport projects.

The survey of 1016 Aucklanders analysed the impact of congestion on people’s lives and probed into how much they might be prepared to pay to address the prob-

lem. Tolls were the only funding method surveyed which attracted majority support, both in principle and for different prices charged for peak, inter-peak and off-peak travel. Across the whole group, 63% sup-ported tolls in principle and 36% were opposed.

The survey also found that congestion is already having a big toll on people and businesses. Large numbers of respondents believed traffic congestion is getting worse (57.3%) and even more (70.9%) believed it will get worse in the future.

The greatest adverse impacts listed by respondents were increasing fuel costs (70.9%), longer commuting times (67.6%), reducing time for other activities (61%), causing stress (60.8%) and stopping respond-ents and members of their households from travelling at certain times (50.4%).

The survey showed that people support the need to invest in Auckland’s transport system and that they understand that pric-ing the motorways at different amounts by time of day will positively influence when and how people travel. In that sense, direct user-pay tolls look to have a much more positive reaction than simply increasing rates and petrol taxes and putting tolls on new roads.

We encourage Aucklanders to provide feedback to Auckland Council when it con-sults on which of the two funding pathways

it is considering.

12 Logistics & Transport NZ

fUnding aUckland’s transpOrt systEm

Motorway user charge the best way By Stephen Selwood

by Xxxx Xxxxx

December 2014 13

impact on business performance. The safety benefits were appealing to the

HW Richardson Group (HWR). Based in Southland, HWR runs over 800 trucks in 30 fleets nationwide and consumes over 19 million litres of fuel per year. An early trial of the programme with HWR subsidi-ary Southern Trucking identified an overall 7% fuel saving and a 48% reduction in gear changes, which flow through to a signifi-cant reduction in both fuel and mainte-nance costs.

Prior to training, drivers believed that fuel-efficient driving would mean a trip would take much longer – but a post- training review based on 21 trips showed that there was in fact a seven-minute reduction in time.

Based on these results, HWR decided to roll EECA’s programme out company-wide. HWR’s managing director Scott O’Donnell says that it was important to the company that the programme’s focus was not solely on fuel efficiency gains. For Scott, getting their people home safe every night and ensuring that they do not put the public at risk from their operations is key to HWR.

Scott and the HWR team are continually looking for ways to improve performance, and the investment in the fuel efficiency programme will assist them in achieving this.

Other business goalsThe health and safety benefits of fuel- efficient driver training

If There is one thing a business owner or manager hates, it’s uncertainty. How can you manage your budget going forward if one of your major inputs – transport fuel – is so hard to predict?

Fuel prices have varied considerably in New Zealand and internationally in recent years. For many transport operators, fuel is their second biggest expense after salaries, and in the future it may become the single biggest cost.

Faced with that risk, the logical response is to look at ways to cut costs, but increas-ing numbers of transport operators are taking a different approach. EECA’s heavy vehicle fuel efficiency programme helps heavy vehicle fleets to develop systems and disciplines around the management of fuel use.

The programme guides fleets through a review to identify fuel savings opportuni-ties, which include fuel data management, leadership and communication, driver training practices, vehicle maintenance and selection, and a number of other areas, as well as helping to implement initiatives and monitor resulting changes to ensure the savings are sustained over the long term.

Starting in late 2012, the programme has reviewed fleets consuming a total of 153 million litres of fuel. Early reviews of these fleets have identified savings of 10%, with 2 million litres per annum in actual savings to date. This figure will continue to increase as those fleets implement their fuel savings programme.

Improvements in safetyBut the programme delivers more than fuel savings. A number of companies have found that fuel-efficient driver training delivers an improvement in safety – with no adverse

are supported by international studies, and they apply to both heavy and light vehi-cles. And, as many firms are now finding, addressing health and safety can actually contribute to other business goals as well, such as controlling fuel costs and happier staff.

Instead of writing fuel off as a fixed cost, as many transport companies do, opera-tors in our heavy vehicle fuel efficiency programme have turned the problem into a solution that delivers better driver safety, motivates staff, and takes control of a major input.

Internationally, fuel-efficient driving is increasingly being recognised as an effec-tive way of limiting the impacts of fuel price rises, and it’s not just for heavy vehi-cles. FedEx Japan adopted a fuel-efficient or ‘eco-driving’ programme to help combat fuel shortages after the 2011 tsunami. The initiative proved so successful that FedEx Express has since rolled it out worldwide. Last March, the company announced it had surpassed its goal to increase the fuel effi-ciency of its vehicle fleet by 20% and has now set a new target of 30% by 2020.

Achieving business outcomesIf you are in charge of a business that relies heavily on a transport fleet, light or heavy, you might want to think again about how fuel efficiency can work as an effective tool to achieve business outcomes such as con-trolling costs, reducing risk and improving profitability, while having a positive impact on the workforce.

fUEl EfficiEncy

How leading transport companies are saving fuel and improving safetyEECA’s heavy vehicle fuel efficiency programme helps heavy vehicle fleets to develop systems and disciplines around the management of fuel use

By Stu Ross

Stu Ross is the programme manager, transport, for the Energy Efficiency and Conservation Authority (EECA); for further information on the heavy vehicle fuel efficiency programme, visit www.eecabusiness.govt.nz

aT ITs heart, New Zealand has a market-based approach that aims to deliver the lowest-cost fuel to consumers. This core policy has existed since the industry was deregulated in 1988 and it has served New Zealand well.

Where the government does intervene is in ensuring that the infrastructure that sup-ports the distribution and sale of transport fuels, as well as the transport fuel itself, meets certain minimum health and safety standards. The government also promotes energy efficiency, funds research and devel-opment, and levies to pay for the externali-ties of fuel use (most notably to fund the maintenance of the country’s roads).

The three primary pieces of legislation that govern health and safety in the transport fuels sector are: the Health and Safety in Employment Act 1992, which is the primary legislation governing health and safety; the Hazardous Substances and New Organisms Act 1996, which governs the importation, manufacture, classifica-tion and setting of basic controls around transport fuels; and the Energy (Fuels, Levies and References) Act 1989, which makes provision for regulations in relation to fuel quality and related matters such as specifications for refuelling equipment and vehicle refuelling inlets, and provision of information for consumers.

Significant reforms are being undertaken to the health and safety legislation. The most significant change as it affects the transport fuels sector relates to major haz-ard facilities. New regulations are currently being developed to cover major hazard facilities, which include the refinery and some major storage terminals.

Competition and consumer protectionThe government maintains overall oversight of market developments to ensure that the market is competitive, consumers are getting a fair deal, and to be able to respond in the case of emergencies. It does this through the weekly publication of petrol and diesel margins, periodic reviews into the state of the market, and backstop legislation.

The core pieces of backstop legislation as it relates to competition and consumer protection, each of which is administered by the Commerce Commission, are: the Com-merce Act 1986, the Consumer Guarantees Act 1993, and the Fair Trading Act 1987.

in various forms. Approximately 45% of the petrol price paid at the pump is comprised of various taxes (see diagram), which include excise rates, an ACC levy, the petroleum and engine fuel monitoring levy, a local authorities fuel tax, and GST. Diesel vehicles do not pay excise rates, but are subject to road user charges.

Coordination and leadershipThe range of government departments and agencies involved in various aspects of the transport fuels market may raise questions about coordination and leadership. In gen-eral, the Ministry of Business, Innovation & Employment (MBIE) has overall policy lead-ership for all aspects relating to competi-tion, health and safety, fuel quality, energy efficiency and energy security. Meanwhile, the Ministry of Transport and the Treasury are the primary government departments responsible for excise rates and road user charges.

From a consumer perspective, much of what has been described remains hidden from view. The transport fuels sector is market driven and has served New Zealand well. Like all well-functioning markets, however, the government sets certain key parameters in which the market oper-ates to ensure workers and consumers are protected and that the market operates efficiently.

The core pieces of backstop legislation as it relates to responding to emergencies are: the International Energy Agreement Act 1976, which requires New Zealand to maintain 90 days of net import stockhold-ings; the Civil Defence Emergency Manage-ment Act 2002; and the Petroleum Demand Restraint Act 1981.

Energy efficiencyEnergy efficiency and research and devel-opment can further enhance security of supply by reducing the country’s depend-ence on imports. The Energy Efficiency and Conservation Authority (EECA) undertakes a range of initiatives, including vehicle fuel economy labelling, heavy vehicle fuel efficiency and fuel-efficient tyres. The NZ Transport Agency’s work on deliver-ing the ‘roads of national significance’ will, alongside reduced crashes, travel time and improved journey reliability, help reduce fuel consumption.

Both the Treasury and the Ministry of Transport are also involved from time to time in major government investment decisions that have a significant energy efficiency component. The decision by the government to invest over $1 billion in KiwiRail since 2010 was driven in part by a desire to alleviate congestion on roads.

Another example is the work done inves-tigating moving the ferry terminal from Picton to Clifford Bay. As part of the overall cost-benefit analysis, the Ministry of Transport and the Treasury examined the transport efficiency gains to be achieved from moving the ferry terminal closer to Christchurch.

Finally, one of the most obvious ways the government intervenes in the transport fuels market is via the imposition of taxes

The role of government in transport fuelstranspOrt fUEls in nEw ZEaland

14 Logistics & Transport NZ

By David BuckrellQuarterly Comparision of Premium Unleaded Petrol Prices

and Taxes in OECD Countries

David Buckrell is the principal policy advisor, resource markets policy, for the Ministry of Business, Innovation & Employment

vEHiclE makEUp and fUEl UsE

According to the Ministry of Transport’s annual fleet statistics, Kiwis own around 2.5 million light petrol vehicles and half a million light diesel vehicles, of which most are commercial vehicles (vans, utes and light trucks). We also have about 120,000 heavy diesel trucks and buses. Although these make up only 4% of the fleet, they are estimated to use more than 20% of the fuel, which is why organisations such as the Energy Efficiency and Conser-vation Authority (EECA) are putting large efforts into reducing fuel use in the heavy vehicle sector.

Last year, 2013, was an unusual year for the fleet. Despite having the highest numbers of both new and used vehicles entering since the mid-2000s, the numbers being scrapped were at a record low. This caused the fleet size, per capita owner-ship, and total travel for the fleet to grow for the first time since 2007. The increased fleet size is likely to be due to high levels of immigration in 2013, although there has not been a clear link in the past.

It is interesting though, that although total ownership levels crept up, the average amount of travel per year by each vehicle continued to fall to just under 12,000 km, down from a peak of 13,500 km a year in 2000.

An ageing fleetAnother trend of note in 2013 was that the average age of the light vehicle fleet reached a whisker over 14 years (14.08). Although many vehicle fleets around the world, such as in Japan and the United States, are also increasing in age – largely as a result of improved mechanical reliability and better rust prevention – there are some factors that make New Zealand unique.

The most important of these factors is the very large number of used Japa-nese vehicles imported in the early to

for large petrol vehicles has declined in recent years, it has been offset by increased sales of large diesel utes and 4WDs, which can use almost as much fuel.

We also know that older vehicles travel less. Brand new vehicles are usually bought by companies, and can travel up to half their lifetime distance in the first five years. Because of this trend, as the fleet average age has increased, per-vehicle travel has actually decreased.

On-road fuel useIn another important trend, while vehicle manufacturers have focused on making vehicles that appear efficient when tested with the standard fuel economy testing procedure, this isn’t necessarily reflected on-road. A 2013 European study estimated that actual on-road fuel use and modelled fuel efficiency had diverged by more than 20% since 2000. Interestingly, this is about the size of the reported improvement in economy of vehicles entering the New Zealand fleet since 2006.

Japanese research shows a similar trend, although other factors may at least par-tially account for the difference between modelled and on-road fuel efficiency (for example, levels of congestion may have got worse over this time).

This all suggests that age alone is not a good proxy for fuel efficiency. It also sug-gests that if we replaced an older vehicle with a newer one, the replacement would probably have a larger engine and, possibly more importantly, would on average travel further.

If increasing fuel efficiency is your aim, reducing the age of the vehicle fleet alone may not be a desirable outcome!

mid-2000s. This created a spike in the 1995–1997 age range. As the vehicles in the spike get older, so too does the average age which will continue until the spike leaves the fleet.

Clearly, the fleet is ageing, but how important is age? We know newer cars have much higher levels of safety technology like airbags and electronic stability control. Emissions standards have also reduced pol-lution from newer vehicles, so a younger fleet should rate better on these measures.

The weakest linkHowever, is there any connection between age and fuel use? Many appear to think so, and Google reveals hundreds of hits saying New Zealand has “an old and inefficient fleet”. The truth is, the link between age and fuel efficiency is actually very weak.

For example, if we look at fuel sales and compare this to the size of the vehicle fleet since 1988 (when reliable vehicle data began) there is an almost linear relation-ship (R2 0.94). This suggests little change to fuel use from outside variables, including age or improving efficiency – or, if we look at on-road fuel use (fuel sales divided by total travel), this has also varied little since 2000, despite the increase in average age. This also suggests that the entry of newer vehicles is not having a noticeable effect on fuel economy.

One reason for the lack of relationship is that the average engine size of vehicles entering the fleet has increased steadily

over the past 20 years. This appears to have offset any technical gains over the time. Although the fashion

December 2014 15

Iain McGlinchy is a principal adviser in the technology and transport systems team at the Ministry of Transport; this article is a summary of material he presented at the NZ Transport Fuels Summit in Auckland in October 2014

The New Zealand vehicle fleet: fact, fiction and fuel efficiency By Iain McGlinchy

The New Zealand fleet is ageing, but how important is age?

16 Logistics & Transport NZ

an InCreasIng volume of valuable export earnings are being generated by the Fiordland Lobster Company (FLC), following its successful pioneering of the live lobster export industry over the past 25 years.

Now exporting over 800 tonnes of the Kiwi Lobster-branded product (officially known as Jasus edwardsii lobster) each year, the firm’s achievements have been founded on efficient air freight and a well-oiled logistics operation, says David Prender-gast, FLC group general manager sales and marketing.

“This lobster is considered the sweetest tasting and most succulent variety available and is highly sought after in Asia, where it is the lobster of choice,” he says. “This is particularly so at the Chinese dinner table, where our air freight connections and logistics processes are ensuring a premium product is being delivered within only four to five days of being fished from local waters.

“Christchurch and Auckland international airports obviously do tremendous work to make sure everything goes like clockwork with the airlines. They are unsung heroes to our industry,” he adds. “Those two airports are our main hubs for exports, but we do ship large quantities of cargo via Dunedin, Christchurch and Wellington airports to Auckland for international connections.

“We don’t have too many hiccups in logistics, where Mainfreight International’s perishables division has been our partner

for 25 years. They are our go-to guys for organising all domestic and international freight.”

High-value exports New Zealand Airports Association chief executive Kevin Ward notes that air freight is the only transport option from this coun-try for perishable, high-value exports such as lobsters. “Some 20% by value of New Zealand exports go by air, even though they comprise only 1% of the total weight,” he says. “Most air freight travels in the hold of wide-bodied passenger jets, so the growth of air connections and tourism to Asia and other growing economies is also a great opportunity for New Zealand exporters.”

Established by a small group of fishermen in Fiordland in 1989, FLC has now devel-oped into a significant nationwide opera-tion, employing about 40 staff and 20 full-time-equivalents. “We operate export facilities in Te Anau, Dunedin, Christchurch, Wellington and Mt Maunganui and depots for landing lobster from fishermen dotted around the North and South Island,” Mr Prendergast says.

“Fishermen fish for Fiordland rock lobster in traditionally plentiful areas such as Milford Sound, Jacksons Bay and Riverton, as well as the Otago and Wairarapa coastal areas and in the waters around the Mahia Peninsula – we have a 70/30 catch split in favour of the South Island.

“Depots are located strategically

throughout FLC’s operation area for fishing boats to land their catch. Here the fish are placed in tanks awaiting pickup for transfer to our factories in Dunedin, Christchurch, Wellington and Mt Maunganui.

“Helicopters are used in the Fiordland area to fly live lobster from the depots to Te Anau, but elsewhere the catch is transported by insulated truck to one of five export packing factories in New Zealand. Here fish are weighed and graded, then swum in tanks to rejuvenate them for 24–48 hours before being packed for export from the Christchurch and Auckland international airports.”

Growth opportunitiesNonetheless, Mr Prendergast laments the industry has not yet been able to establish a certificate of non-manipulation (CNM) out of Australia for transhipment through to China. “Under the New Zealand free trade agreement with China we have to produce a CNM for anything hubbed over a third-country port,” he explains. “If we could achieve this document over Sydney to Shanghai, 80% of our South Island busi-ness would be exported from Christchurch. This would take a lot of pressure out of the logistics chain and assist the industry greatly.”

Looking for further growth opportunities, the company entered the Australian market in 2011 as a processor and exporter of the South Australian lobster. “In 2013 we managed 500 tonnes of South Australian lobster, primarily to China, thereby making FLC the world’s largest shipper of the Jasus edwardsii lobster,” Mr Prendergast says.

As well as being an important contribu-tor to the regional and national economy, FLC is also very proud of its environmental credentials. “FLC works closely with the Department of Conservation to help nur-ture and initiate new conservation projects under their partnerships programme,” adds Mr Prendergast. “The fisheries we oper-ate in are sustainably managed under the fisheries quota system.”

Live lobsters fly to export success

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Fiordland lobster is highly sought after in Asia where it is the lobster of choice

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The Fiordland Lobster Company’s vessel Ata Whenua operating off Milford Sound

Russell McVeaghTransport and LogisticsAbout Us

James leads the EPNR team which is NZ’s longest established and most experienced environmental and resource management practice. The team has a wide range and depth of experience in the transport sector in particular, having acted for clients such as the Ports of Auckland, Auckland International Airport Limited, Air New Zealand and KiwiRail. We were also recently involved in the Ruakaka Board of Inquiry proposal for an inland port, which involved a specific logistics zone.

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Widely regarded as New Zealand’s premier law firm, Russell McVeagh is a full service, 250 lawyer firm with over 400 total staff in offices in Auckland and Wellington.

Our firm is strongly focused on the provision of top quality commercial advice to leading corporates, banks, multi-nationals and infrastructure companies based throughout Australasia and internationally. We represent the majority of the large NZX listed companies, all of the country’s major banks, and leading players in key sectors throughout the New Zealand economy. Russell McVeagh’s Land Transport team advises on road, rail, aviation and ferry transport.

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PUBLIC LAW & POLICY

HEALTH & SAFETY AND LITIGATION

Mei Fern has deep and broad experience in acting for clients that operate or support transport and logistics businesses across all modals. She leads a Corporate Advisory team that advises on purchase / maintenance / divestment of transport infrastructure, access arrangements with supporting infrastructure providers, competition / anti-trust issues when growing or acquiring business assets in New Zealand, and generally on establishing businesses in New Zealand.

Mei Fern Johnson – Partner

meifern.johnson@russellmcveagh.com

DDI: +64 4 819 7378Mobile: +64 27 671 2344

CORPORATE & COMMERCIAL

The National Council of the Chartered Institute of Logistics and Transport in New Zealand Inc.

Further information and application forms are available from the CILT website, www.cilt.co.nz, or visit www.leadersforthefuture.co.nz

If you would like to discuss the 2015 programme further, contact

Jo Brosnahan, email jo.brosnahan@gmail.com, phone 021 576 595

A unique leadership programme has been developed for the logistics and transport industry. We are again looking for the best leaders in the sector to join a 10-day programme (over four months during 2015) of intense conversation around leadership and the issues confronting the industry, both in New Zealand and globally.

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The programme will be held around New Zealand and will involve conversations with some of the most senior and influential leaders in the logistics and transport sector. Participants will develop an understanding of the many challenges of leadership into the future, and will better understand their own leadership. They will also develop a network of colleagues across the nation.

Are you a leader looking to: Enhance your ability to deal with the complex world around you?

Be better able to deal with the challenges confronting you in the workplace?

Understand the diversity of leadership in your industry?

Develop beneficial relationships?

Prepare for being an even better leader in the future?

Leaders for the Future Programme 2015

CILT NZ

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