This week I had the pleasure of attending the 29th Annual CBAFF Conference. Each year this is a must-attend event for me, bringing together key businesses from across the freight and supply chain sector including many NRC members. Shipping lines, ports, port transport operators, freight forwarders and customs brokers made up the majority of the room, along with sponsors and industry suppliers.

The beauty of this event is hearing first hand from people working up and down our export and import supply chain. It broadens perspective and understanding of the complexity of keeping this critical economic enabler running.

I was attending as a speaker on the Infrastructure Panel: “Connecting the Dots”.

Here is an abridged version of the speech I gave on the state of infrastructure, freight and supply chain in New Zealand.

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Good afternoon

Today’s panel discussion is called connecting the dots.

And the dots I am going to talk about are underlying infrastructure, and how it connects to freight and supply chain.

I want to start with the positives happening in infrastructure – because we can never talk about the good news enough.

The Port of Auckland achieved the first ever fast track consent to get port expansion underway in only 66 days. More freight capacity and efficiency, more cruise ships and more stimulus to the NZ economy.

Mercury Energy’s Nga Tamariki Geothermal Station expansion in Reporoa, is coming online next year, with enough electricity to power the homes of Christchurch. And New Zealand has some serious research underway exploring the very real prospect of SuperHot geothermal electricity generation boosting our generation.

And we’re going to need that extra electricity, because as we saw – Amazon is investing $7.5 billion in New Zealand. The news may be old, but nothing wrong with celebrating what is the single largest tech investment in this country.

But are we joining the infrastructure dots?

We need the three Ps – and I’m not talking about Public Private Partnerships (even though we need them too).

No, the three P’s I’m talking about for infrastructure are:

• A plan,

• A pipeline, and,

• Paying.

The good news is we now have a plan – the Infrastructure Commission has put out their draft National Infrastructure Plan, a much needed strategic, long-term blue print for New Zealand’s infrastructure development.

We also have a pipeline.

The Pipeline’s goal is to help plan, coordinate, and deliver infrastructure projects by offering a clear view of planned activity and enabling more strategic and coordinated decisions for building and maintaining New Zealand’s infrastructure.

In the last quarter, we added $30b to the pipeline, which now has $237 billion in projects.

Which brings me to the third P, Paying.

Our shopping list is larger than our ability to pay for it.

We have a modest tax payer base, and modest levels of national savings to be used as capital.

Which means we need new ways to pay for infrastructure.

The real PPPs – Public-Private Partnerships are critical. We’ve had the international investor summit earlier this year, and we’ve already seen infrastructure successfully delivered under PPP contracts, including Transmission Gully, Puhoi to Warkworth northern express way, and the Ultra-Fast Broadband project, something I worked on in a past life.

We also need to be open to increased use of user pays models.

The government has announced a much-needed move to universal road user charges to pay for our roading and rail.

And we need to be open to tolling and congestion charges to get the infrastructure and journey consistency we need.

Done right, road freight is a beneficiary of these tools, with increased productivity, and the cost can be passed on to customers who also benefit from the efficiency.

What do the plan, a pipeline and ability to pay add up to?

Confidence.

Confidence for contractors and construction companies to invest in the people and plant, knowing they have a 30+ year pipeline of work available to bid for.

Confidence for investors to know that New Zealand is serious when it comes to infrastructure, with a stable pipeline and no sovereign risk.

Confidence to drive savings and efficiencies through scale and innovation.

Unless, and I’m going to slip a fourth P in here.

Unless, politicians decide to change the course we are on, and U turn an infrastructure investment decision to appease their voter base. Never happens of course.

New Zealand need a bi-partisan approach to infrastructure development, to show the world we are serious and open for delivering infrastructure. We don’t argue about the need for water, electricity or telecommunications infrastructure, we need to stop arguing about the need for roading, rail and transport infrastructure.

Now we need to take a look at the dots in freight and supply chain.

Right now, we are missing a lot of opportunities to better align freight and supply chain investment.

And there are some simple and quick wins to get us going.

We need clear policy and direction from government, which includes measuring and then setting KPI targets to improve freight task productivity and efficiency. No government agency is currently doing this.

We need to develop a National Freight & Supply Chain Strategy, and we need look no further than Australia for an excellent example of how to do this.

And we need to create a Freight Council (again something our Australian cousins already do) – an expert advisory panel with executives from across the transport modes – road, rail, maritime, ports (coastal and inland), aviation and 4PL. A Freight Council would drive joined up planning with the Ministry of Transport to ensure multi-modal efficiency, rather than silo-based planning and procurement that we have today.

Data and Digitisation – we need to understand what is moving where, when, why and how much of it, and how valuable it is. Our data cupboard is bare, but much of the data we need already exists. Well over half of our truck fleet have telematics. Let’s start there – with operators incentivized to pool aggregated and anonymized data. Then start measuring what’s on the back – containers, pellets.

It doesn’t take much effort to get this data underway, it is critical to informing our freight and supply chain planning and investments, measuring freight productivity, and giving a Freight Council critical insights for multi-modal planning.

So – there are a lot of dots to join, but the good news is plenty of them are within reach.

We just need to get on with it

Justin Tighe-Umbers, Chief Executive, National Road Carriers Assn