Are we still on track for that soft landing?
Back in April principal economist Brad Olsen from NRC partner Infometrics said hopes of a soft landing for the New Zealand economy “are disappearing.”
Sitting here is August, seeing how much the freight sector has slowed down, it is hard not to agree.
Just this week shivers were sent throughout the supply chain with Swire Group’s Pacifica Shipping announced it is set to pull out the Takutai Chief coastal freighter due to difficult economic and operating conditions. According to country manager Alistair Skingley, the transport sector in New Zealand was facing a number of serious challenges. Losing the Takutai Chief is a significant dent to New Zealand’s supply chain, with over 1300 TEU capacity now pulled from the system.
The recent grounding of the Aratere Cook Strait Ferry was another canary in the coalmine example. You’d think losing a significant percentage of capacity across the Strait would cause major freight delays and take weeks to recovery. This was the crisis that wasn’t…freight demand has got so soft, the loss of the Aratere was barely noticed from a supply chain perspective. Just 18 months ago beaching the Aratere would have been a body blow to an overheated freight system. Perhaps that is one silver lining – the timing was good.
Our physical economy, the speed of goods travelling through the system, is a lead indicator of what is happening in the “real economy”. It is not measured accurately, and as a result, politicians in Wellington are in danger of missing the read on what is really happening early enough to do something about it.
Road freight demand is one of the best lead indicators we have available. The Reserve Bank managing the OCR looks at a lag indicator of inflation numbers…after the ship has sailed.
Our message to government and the Reserve Bank is simple. Pay attention to what’s going to freight demand, or that soft landing will certainly disappear and the economy will overshoot the runway.
We are not alone
My news feed this week delivered the headline “Drivers face ‘nightmare’ summer of 220 miles of roadworks on motorways”. At first glance this could be a headline for New Zealand, but no. Spare a thought for Britons during the summer holidays as they endure more than 220 miles of roadworks over stretches between ten and 17 miles long on the M1, M3, M4, M5, M6, M20, M25 and M27 over the coming weeks.
In some ways it’s helpful to know poor roading is not an issue unique to New Zealand. As our century old infrastructure ages across the west, keeping out roading networks up to scratch is clearly a global challenge.
Road Ninja
We are excited to announce a new partnership with Road Ninja – a unique digital recruitment solution for the transport industry, connecting operators with thousands of drivers nationwide.
Road Ninja’s vision is to make it quicker, simpler and cheaper to find qualified drivers.
As a limited offer, the first 20 NRC members to subscribe to either the Standard or Enterprise plans will receive a massive 50% off!
Simply enter the promo code NRC50. But hurry as the offer expires at midnight on the 14th Aug!
Palmerston North Freight Diversion Critical according to Mayor
National Road Carriers Association (NRC) supports Palmerston North Mayor Grant Smith’s call for the Government to commit to the Regional Freight Ring Road as part of the Palmerston North Integrated Transport Initiative (PNITI).
As a national freight organisation NRC has many transport operator members in Manawatu and what we hear from them backs up Mayor Smith’s claim that without the ring road they are forced onto urban roads that is far from ideal for them or the state of the roads.
We realise the Government has many conflicting priorities but we feel this is one that needs to be progressed and we will advocate for it in our discussions with NZTA and the Minister of Transport.
Roadside Drug Testing is on the way
NRC welcomes the legislation that enables roadside drug testing.
Detecting drivers under the influence of drugs will help keep our roads safe, productive and efficient.
Justin
