ADVOCATING FOR THE RESILIENT, EFFICIENT, RELIABLE AND COST-EFFECTIVE MOVEMENT OF CARGO
The resilience, efficiency, reliability and cost-effectiveness of the shipping supply chain is critical for New Zealand. As an island nation, geographically distant from many of our key trading partners, and with a small domestic population, the economic growth and prosperity of New Zealand – and ultimately, wellbeing of all New Zealanders – depends on the performance of the supply chains that move our goods from end to end.
Whether inbound or outbound, the efficient, reliable and cost-effective movement of cargo reduces the cost of goods, increasing our competitiveness as a nation and facilitating trade. Resilience is critical to enable the supply chain to recover from disruptions and continue to operate in the face of adverse conditions.
Our key requirements of government:
- Integrated, strategic planning and investment in public infrastructure that facilitates efficient movement of cargoes across the entire supply chain.
- Efficient, well-co-ordinated border management and assurance processes.
- A regulatory environment that facilitates fair, transparent commercial practices between supply chain participants.
- Representation in international maritime processes to protect and champion New Zealand’s interests.
- A resilient supply chain balancing the environmental, economic and community needs of New Zealand.
NZCCO calls on the next New Zealand Government to prioritise policies and investment that facilitate resilient, efficient, reliable and cost-effective cargo movement.
We ask for robust engagement to support targeted and well-integrated planning for current and future needs. Cargo owners see things from the ground up and from end to end and so are uniquely positioned to advise on New Zealand’s supply chain and infrastructure imperatives.
We seek a cargo-centric approach across government that informs decision making at all levels and ensures supply chain concerns are acted on in a cohesive and timely way.
KEY NZCCO POSITION STATEMENTS:
INFRASTRUCTURE
New Zealand’s international competitiveness is threatened by inadequate infrastructure planning and poor investment decisions, with resultant cascading costs through the supply chain. Strategically located and well-connected freight and logistics infrastructure is critical: to support ongoing growth in cargoes, to ease congestion to help lift productivity and reduce emissions, and to provide necessary supply chain resilience.
It is important that infrastructure planning and investment takes a long-term view and is not subject to political whim. We therefore support the Infrastructure Commission in its aim to drive a longer-term view for infrastructure planning and investment that is not constrained by three-year election cycles.
NZCCO welcomes early engagement with agencies involved in the infrastructure planning process and calls on all agencies to remove unnecessary barriers that impede the efficient processing of consents.
It is NZCCO’s view that, in general, as long as new infrastructure developments are underpinned by a robust business case they will be a welcome addition to New Zealand’s supply chain infrastructure.
PORTS IN NEW ZEALAND
NZCCO members require ports that are reliable, accessible, competitive and efficient so that we can move our goods to market in a timely fashion. Development and management of the entire freight corridor in and out of ports is of critical importance. These economic considerations need to be front and centre in any discussion about the future of any New Zealand port. Any decision that ignores these considerations would be extremely detrimental for shippers, consumers, and ultimately, the country.
Cargo owners, ports and other supply chain stakeholders need to actively engage to eliminate waste in the supply chain to ensure NZ Inc. remains competitive in reaching our market, with a focus on reducing port congestion and providing the efficient flow of cargoes between New Zealand ports. Efficient loading and unloading of vessels that does not create delay is critical.
UPPER NORTH ISLAND PORTS
Decisions in respect of the future of the Port of Auckland affect the entire New Zealand freight supply chain. It follows that the focus of any Upper North Island ports decision should be on what is best for NZ Inc. which, from the Council’s perspective, means delivering the best option for cargo owners to move their cargoes in and out of the county as competitively as possible and at the lowest environmental cost. Cargo owners should be comprehensively consulted in this decision-making process.
FREIGHT TRANSPORT INFRASTRUCTURE INVESTMENT
Decisions on investment for freight transport should be mode neutral and based on what is the most efficient and competitive way to facilitate freight movement across the entire supply chain, balancing the import and export requirements – the right mode in the right context.
INTEGRATED INTERMODAL TRANSPORT PLANNING
Integrated transportation planning is crucial for the supply chain as all modes connect as a system and impacts to one mode have significant and immediate impacts on the others. Investment decisions need to be integrated to optimise and appropriately sequence spending so that they achieve the best outcomes for NZ Inc., particularly given limited budgets.
IMPORTANCE OF MAINTAINING A QUALITY ROADING NETWORK
NZCCO urges the government to prioritise ongoing investment in quality roading that supports the efficient and safe movement of freight across the supply chain.
Roads remain the main mode of transportation for more than 90% of the freight volumes moving around the country. It is critically important that the Government continues to invest not only in new roads but also in the maintenance of existing roads to ensure they are fit for purpose and able to support resilience in the network. Rural roads in particular play a critical role given that most exports originate in rural areas. The adequacy of roads that provide access to the port network e.g. the Port of Tauranga, are also critical to support efficient cargo movement.
We look to the Government to protect critical freight corridors and to ensure that there is continued investment in quality roading infrastructure across the total roading network.
COASTAL SHIPPING
Coastal shipping has the potential to support an efficient and sustainable network that can reduce congestion, emissions and safety instances, and provide an important source of resiliency to the transport system should disruption occur.
The achievement of these outcomes requires a coastal service that supports all cargo owners and is supported by efficient interchanges between transportation modes.
Stakeholder engagement by coastal shipping operators is imperative prior to the introduction of new services. This will facilitate a smooth transition from other modes and help ensure the service’s effectiveness.
NZCCO would oppose any change to New Zealand’s cabotage policy.
RAIL
Rail supports the road network by creating an efficient and sustainable network that can reduce congestion, emissions and road accidents.
We support the Government’s intent that rail in New Zealand should transport people and goods where they need to go, support productivity and business growth, reduce emissions, congestion, road deaths, and strengthen social and cultural connections between communities.
We identify rail’s strengths as moving bulk commodities point to point along the main trunk line and believe a continued focus on this will deliver the greatest benefit of a modal shift for cargo owners. The final mile, and servicing our regional centres, will continue to be dominated by road transport. We encourage Kiwirail to focus on what it does well.
To facilitate volume growth, Kiwirail must invest in rolling stock and infrastructure that increases capacity in an economically viable way. Rating structures need to be competitive with road and take into account the full life of assets.
Pricing constructs should be long-term for all customers, thereby providing both certainty around pricing to customers and certainty around returns in infrastructure investments to the Government. The use of long-term, price-stable agreements would remove commercial tension between customers and KiwiRail and would allow both parties to focus on seeking efficiencies through collaboration.
As a State-Owned Enterprise with a commercial imperative, KiwiRail’s current profit-related purpose can lead to outcomes misaligned with the Government’s intent. Currently, Kiwirail’s model calls for each laneway to be commercially viable, which puts pressure on Kiwirail to price above non-rail alternatives or cease service on unprofitable laneways, without full consideration of wider social and economic benefits to New Zealand.
As a result, customers perceive rail prices and services as potentially unstable which discourages long-term commitments to using rail. We suggest that Kiwirail focus on serving its highest volume routes efficiently with long term, price stable agreements.
NEED FOR RESOURCE MANAGEMENT REFORM
NZCCO has argued for many years that the RMA needs fundamental reform. We recognise that goods must be moved with minimum impact on our environment and communities. This must be balanced with the need to develop fit for purpose supply chain infrastructure in a timely manner. Environmental, economic and community considerations must be given equal weight, reflecting a true sustainability model.
The RMA is currently a major handbrake on the development of infrastructure to support the activities of the export and sector; both in terms of current needs and to support future growth. For example, as the international shipping fleet deploys increasingly bigger vessels the challenges of larger tonnages impact landside infrastructure (adequacy of roads, bridges, freight corridors), seaside (dredging, berth faces, moorings) and shoreside facilities to ensure physical volumes can be accommodated and cargo can flow. Time delays, expense and uncertainty of outcome delivered under the current RMA undermine necessary infrastructure investment across all these pressure points and constrain supply chain efficiency.
We note that NZCCO applauded the introduction of the fast-track consenting process for critical infrastructure however we cannot reconcile the intent of this legislation with subsequent decisions e.g. continued regulatory barriers to the extension of the Port of Tauranga wharf.
BORDER AND SECURITY SYSTEMS, ASSURANCE PROCESSES
NZCCO enjoys a good working relationship with NZ Customs and the Ministry for Primary Industries. These relationships are important to the Council. We work closely with these agencies on any changes that might be contemplated to the regime operating at the border.
NZCCO supports the work these agencies are doing to progress end to end digital ecosystem connectivity.
BIOSECURITY
Effective biosecurity management has never been as important as it is today. In the face of biosecurity risks becoming more challenging as trade volumes, passenger movements and climate change impacts increase, rigorous biosecurity measures are paramount for the long-term future of New Zealand’s trade.
Whilst there is risk of significant disruption to the flow of goods and the costs to trade associated with safeguarding New Zealand from pests and disease, the cost to industry of contamination outweighs these burdens.
NZCCO is a signatory to the Biosecurity Business Pledge and has a representative on the Biosecurity 2025 Steering group.
CUSTOMS
NZ Customs is a critical player in the economic security of the country. In an increasingly complex trade environment, efficient cargo movement requires modern systems that deliver certainty of process, predictability of outcomes and a reliable, trusted environment for trade.
We support the good work undertaken on behalf of NZ Inc. and urge continued investment in digital supply chain transformation technologies that are developing at pace globally e.g. blockchain, eDocs.
COMMERCIAL / REGULATORY ENVIRONMENT
Efficient, reliable, cost-effective movement of cargo is facilitated in an environment that strongly encourages all participants to operate in a truly sustainable, commercial and competitive manner.
SHIPPING LINES
NZCCO members require a range of shipping services that are sustainable and competitive. We require shipping lines to call into New Zealand with the required frequency, capacity and reliability that enables NZ Inc to effectively compete in global markets.
New Zealand is a long way from its key trading partners therefore reliable services to deliver freight in a timely manner are critical to the competitiveness of New Zealand.
In particular, the shipping lines need to actively engage with shippers to ensure empty containers are available with the appropriate lead time for packing and vessel schedules are adhered to. Any changes or blank sailings need to be communicated in a timely fashion to enable the shippers to react to this.
VSA’s / BLOCK EXEMPTION
New Zealand’s small share of world trade and its remoteness create vulnerability around levels of service from international shipping lines. The preservation of Vessel Sharing Arrangements (VSAs) are necessary to guarantee levels of service to and from countries like NZ at reasonable cost. VSA’s must therefore be allowed to function efficiently within New Zealand’s competition framework.
NZCCO supported the passage of the Commerce (Cartels and Other Matters) Amendment Bill subject to a block exemption for VSA’s.
INTERNATIONAL SHIPPING POLICY
New Zealand is nearly totally dependent upon international shipping for our exports and imports. The International Maritime Organisation (IMO) is responsible for regulation of this activity. We are pleased with much of the work done by New Zealand officials at the IMO. The Verified Gross Mass (Container Weight Verification) issue was a clear instance of New Zealand leading the world and creating great outcomes for New Zealand business.
We note that the work of the IMO will become even more important for us in the future. An example of the current agenda is the treatment of international shipping around climate change and GHG emissions. The implications for New Zealand are arguably greater than for any other IMO member.
It is time for New Zealand to consider upgrading its investment in the IMO by having a permanent presence at the IMO, based out of the NZ High Commission in London. We note that there is a permanent presence at the OECD, WTO and World Customs Organisation. The IMO is potentially more important to New Zealand trade in terms of actual activity and impact and should be treated the same as the other organisations.
EMISSIONS | DECARBONISATION OF SHIPPING
Sea freight, even at very long distances, remains the most climate friendly means of conducting international trade. The sector is working progressively to reduce emissions and is on the verge of major technological change to enable decarbonisation. This transition needs to be managed very carefully to avoid harm to our imports and exports.
In principle, NZCCO is supportive of the need for the reduction of emissions across the shipping supply chain – as an example, NZCCO led early calls for New Zealand’s accession to MARPOL Annex VI: Prevention of Air Pollution from Ships. In our view New Zealand should have signed this international treaty without delay. The way the world views New Zealand is critical to our success in international trade. Our products must continue to be seen as being of the highest possible integrity.
Equally, we recognise the risk that international climate change regulation applicable to the ocean freight industry could have a particularly adverse impact on New Zealand given our distance from markets. The implementation of distance-based measures, e.g., levy on carbon miles, has the very real potential to increase shipping costs for New Zealand’s exporters and importers; undermining our competitiveness as a trading nation.
NZCCO is strongly opposed to slow-steaming as a measure to reduce emissions. This measure will penalise New Zealand exporters and importers due to our distance from markets and will be dire for time-sensitive cargoes. The reality is that shipping lines will simply increase the number of vessels on a circuit in order to achieve their required schedules, thereby increasing the total quantum of emissions.
It is paramount that those representing New Zealand’s interests in international policy negotiations fully understand the impacts at the local level. This includes recognising that New Zealand’s exporters and importers are already implementing programmes to reduce and mitigate their emissions and striving towards a common goal for NZ Inc.
We also urge officials to better understand the commercial dynamic between cargo owners and the international carriers on which we are highly dependent. Market forces will dictate the speed at which the sector decarbonises and the cost burden that cargo owners bear; ill-informed government intervention poses the risk that New Zealand exporters and importers will be penalised by multiple taxes from multiple sources.