This is the second of three Transport Minutes drawing on Aka Raupapa, the inaugural Freight & Supply Chain Superhui at the University of Waikato on 1-2 July. Last week I wrote about our changing workforce. 

This week: how Australia already solved the strategy problem we are still wheel spinning about. 

On the panel, Samantha Leighton, Head of Government and Industry Affairs at the Australian Logistics Council (ALC), walked us through something New Zealand does not yet have: a genuine, government-endorsed National Freight and Supply Chain Strategy.

It didn’t happen by accident. The ALC spent years building the case, convincing government that freight deserved the same strategic status as energy or health. 

Here’s what makes it work. The Strategy is built on shared, multimodal data that is captured, standardised and published through a National Freight Data Hub the ALC pushed to establish. That data doesn’t just sit in a report. It drives intermodal planning and tells government where to invest – not only in roads and rail, but in inland ports, seaports and warehousing, treated as one connected system rather than competing silos. 

Good data also provides the evidence base needed to hold decision-makers to account. 

New Zealand has just stood up its own Freight Advisory Council – chief executives across road, rail, maritime and air, sitting alongside government – perfectly placed to do exactly what Australia has done. We do not need to invent our own version from scratch. Lift the Australian model, and drop it here. Steal with pride from our cousins across the Tasman, rather than sweating years reinventing a wheel they have already built. 

And if anyone doubts the urgency, here is a great quote on the importance of “system coherence” from an ALC submission to Australia’s Productivity Commission this year: 

“Freight productivity is often framed in terms of modal efficiency or infrastructure utilisation. This framing is incomplete.

Freight operates as an integrated system in which road freight, freight rail, ports, aviation freight, and warehousing are interdependent. Productivity is therefore not determined by the performance of individual assets in isolation, but by system coherence across interfaces, regulatory frameworks, and operational handoffs. This explains a persistent feature of the Australian freight system: significant investment in corridor infrastructure does not consistently translate into system-wide productivity gain.” 

Read that again and swap “Australian” for “New Zealand.” It could have been written about us. We have the evidence, we have the model, and now we have the Freight Advisory Council to act on it. 

Let’s not waste the opportunity.

Justin

Women in Supply Chain leading the way in industry networking

This week I had the privilege of attending a Women in Supply Chain (WISC) breakfast networking event, to join a panel discussion with National Road Carrier member WM’s Ingrid Cronin Knight.

And what a great event it was. There was a real buzz in the room, it was a warm welcoming environment with everyone clearly enjoying getting together from all corners of the supply chain. I was impressed to see that a session was set up to practice in person the skill of networking – how to break into groups, introduce yourself and ask questions. All in a safe environment.

As we all know, the women in supply chain still number too few. It is an operationally intensive environment and usually male-dominated, so building relationships can be challenging.  So WISC was set up by some dedicated volunteers to help build not just networks, but friendships across the supply chain.

I really enjoyed the experience of joining over 100 women from across the industry to talk about the great work National Road Carriers does on behalf of our members. It was pointed out to me that I was literally the only male in the room, something I hadn’t actually noticed, probably to do with the fact I was lucky enough to grow up with three older sisters.

In the panel discussion, Ingrid talked about Waste Managements electric truck fleet for kerbside pick-ups – they have the largest electric vehicle workshop in the southern hemisphere. Right now, with the diesel price shock, WM taking the risk in early investment is clearly paying dividends.

And yes, the Iran conflict was a hot topic. I talked about NRC’s work with government officials to help craft a practical response that supports industry to navigate the impacts.

What stands out is how the Government is listening. They have a consistent message to industry – tell us what government can do to help. Their expectation is that those in industry are best placed to respond, they are the experts closest to the day-to-day who know how to manage their operations. Government’s role is to remove any roadblocks. This is a stark contrast from the Covid-19 pandemic, where the Government’s instinct was to control industry rather than seek their expertise, and to tell more than listen.

The Fuel Response Plan released this week is an excellent example of how to work constructively with industry.

The plan was dusted off in March, officials sat down with industry representatives and asked us how practical the plan was. The existing plan involved being able to classify a whole lot of bands of business types and activities across the entire economy, in order to inform who gets and who doesn’t get fuel should major shortages occur.

It quickly became apparent that the plan was unworkable. So we went back to the drawing board. Government asked major fuel users, supply chain and fuel companies what would work. For supply chain, we advised that any classification process for priority fuel users would have to be broad enough that unpicking critical freight from non-essential freight wasn’t required. It simply is not possible to do. That lesson was learned the hard way in the bad old days of the Covid-19 Auckland border.

The revised plan released this week is a great example of government and industry working together to come up with practical, realistic plans that are workable in the real world.

While there has been no fuel supply shortage, and supplies remain robust, industry still asked that a workable way to allocate fuel must be developed so we are ready should the unthinkable happen. The new plan strikes the balance between the extremes of an overly-controlled policing of fuel access (simply not practical) and a hands-off high-trust model.

A bit like us in the supply chain, the Government’s response to the Iran conflict has been to focus on what matters, get the job done and ignore the noise.

Thank you to Deena Clarkson and the team organising WISC for inviting me along, and running such a great initiative. Keep up the great work.

Justin

Beyond food for fuel: PM’s vision for supply chain reset

Here’s a deal that makes sense. While many governments around the world are talking in circles about supply chains and energy security, Prime Minister Christopher Luxon has used his business skills to stitch together a refreshingly practical “food for fuel” arrangement with Singapore.

Let’s call it what it is: a clean, logical trade. We produce high-quality food Singapore needs for its six million people. Singapore’s oil refineries produce the fuel vital to keep our economy moving. No gimmicks, no overcomplication — just a smart exchange that plays to both countries’ strengths. In a world of increasingly fragile supply chains, that’s not just clever — it’s strategic.

The Government claims the deal is a world first because it is the first legally binding bilateral supply chain resilience agreement. It ensures both countries will not impose unnecessary export restrictions on essential goods during a crisis – such as food, fuel, healthcare products and construction materials. It’s a significant step forward in supply chain resilience.

At a time when fuel security has been front of mind for every freight operator trying to keep trucks moving and costs under control, this is exactly the kind of thinking our sector has been crying out for.

But even more important than this deal for the long-term health and resilience of the transport sector and the broader supply chain are some barely reported comments by the Prime Minister.

Speaking with business leaders after the deal was made this week, Luxon made it clear he understands that New Zealand’s supply chain challenges run deeper than short-term disruptions. He pointed directly to structural issues — logistics, port configuration, long-term resilience — the kind of topics that don’t always grab headlines but absolutely determine whether freight moves efficiently or not.

The PM called for a “free and frank” conversation between government and industry. That’s been a consistent message from National Road Carriers: we need honest discussions about costs, constraints, and what’s actually happening on the ground.

And he’s right that our system isn’t as “joined up” as it should be. For a small country, we’ve managed to make things more complicated than necessary. Fixing that will take some bravery and a willingness to look at structural reform, not just surface-level tweaks.

That’s why the newly established Freight Advisory Council matters. National Road Carriers pushed hard for its creation, and now we’ve got a real opportunity to bring industry expertise into the conversation in a meaningful way. If the Government is serious about improving supply chain efficiency and productivity — and these signs suggest it is — then this Council needs to be much more than a talking shop. It needs to help shape a practical, long-term plan.

The prize is significant. Exports are growing, the balance has shifted in our favour, and there’s real momentum to build on. But without a supply chain that can keep up — reliably, efficiently, and cost-effectively and without reliable transport links to our food producing regions such as Taranaki and Gisborne — that growth will hit a ceiling.

Transport operators hurting as Taranaki cut off for the seventh time in 12 months

As I write this Taranaki’s main northbound route, State Highway 3, remains closed, with major slip damage closing the Awakino Gorge between Mokau and Piopio. Digging through the extensive slips is going to take time, exactly how long remains unclear as this goes to press, but the latest estimate is Saturday 2^nd May at the earliest .

For the transport operators of Taranaki, and those travelling through it, this is all too familiar territory. Detours of hundreds of kilometres up State Highways 4 and 1, juggling driver hours and negotiating the extra diesel cost, made worse by the Iran conflict, with customers.

By our count, this is the seventh time in the last 12 months State Highway 3 has been closed. For a region like Taranaki where reliable alternative routes are minimal, keeping State Highway 3 open matters.

At the risk of stating the obvious, we are now starting to accept a changed reality – more rain, more frequently – a wetter climate. We need to adjust how we build infrastructure to reflect that reality.

This week I attended the Infrastructure Commission’s Symposium in Auckland, where resilience was a front and centre topic. Minister for Infrastructure Chris Bishop gave a raw assessment in his keynote address outlining the Government’s direction for infrastructure. New Zealand, he said, is in the top 10% of OECD for infrastructure spend per capita, but in the bottom 10% for what we get. We are all poorer because of our failing assets.

Like most countries, we are behind in maintaining our infrastructure, we have a long list of new infrastructure needed, we don’t have enough money to pay for it all, and the damage from weather events is making it worse.

State Highway 3’s Awakino Gorge couldn’t be a starker example.

Minister Bishop and the Infrastructure Commission are clear on what we need to do to fix this. Look after the assets we have better. Make smarter, evidence-based decisions on which new assets will deliver the best bang for buck. Stop throwing good money after bad projects. Improve our revenue recovery and invest wisely in what we can afford.

Wise words. For Taranaki, and our roading investments in general, this means some tough decisions must be made. Revenue recovered for our Land Transport Fund via road user charges and fuel-excise duties is enough for maintenance and renewals, with not much leftover for new build. The frequent flooding and slips are making the problem worse.

The Infrastructure Commission says that 60 cents in every dollar of future infrastructure spend will need to be directed towards looking after what we’ve got – maintaining, renewing and replacing existing assets. For road networks, I believe the next immediate priority must be spending on resilience – making our existing assets stronger to cope with the worsening weather patterns.

NZTA has had notable success in Northland with State Highway 10 and the Brynderwyns showcasing how resilience spend can minimise road closures even when slips occur.

Having been closed every second month on average over the last year, State Highway 3 at the Awakino Gorge must surely be a contender for prioritised resilience works. Further down the road the Mount Messenger Bypass is well on the way to delivering safety improvements. Now the time has come to prioritise resilience improvements, to keep Taranaki reliably connected to Waikato.

Click here for NRC press release on the State Highway 3 closures.

Diesel supply update

The diesel fuel stocks have dropped from around 45 days cover (previously from 49 days) to 41.  Onshore supply remains constant, at around 21 days cover.  The Government has noted that while there is a dip in on water diesel stock, a ship is loading in Singapore, and the variations remain in normal pre-conflict range according to the fuel companies.

Fuel supply resilience has also had a shot in the arm this week with the Government making a deal to store more diesel at Marsden Point. Channel Infrastructure has been commissioned to increase storage by 93 million litres, which translates to approximately nine days additional diesel cover. This would see on shore stocks increase to around 30 days cover. Work is underway and expected to be in place to receive diesel by the end of May.

Fuel market update and building a picture of your fuel cost recovery 

Fuel stocks update

On Wednesday MBIE reported diesel stocks were confirmed as 45.4 days cover, down from the 49.1 cover reported earlier in the week. MBIE noted the departure of “one small ship” has been delayed. Fuel companies confirmed the supply chains continue to operate, but noted that these kinds of delays are likely to become more common.

Fuel Response Plan Phases

Some media coverage has called for a move to Phase 2 of the Fuel Response Plan. Phase 2 is described as “the market continues to operate effectively and fuel is available nationwide, but there are signs of significant supply disruptions”.

The Fuel Response Plan also sets out the  government criteria that would lead to a Ministerial assessment meeting to determine if a move between Phases was required. Rather than a single trigger-based approach, all of the criteria will be taken into account in the assessment.  I recommend transport operators familiarise themselves with the plan.

It is important to note that Phase 2 does not contemplate prioritising fuel distribution, it is about stepping up fuel conservation efforts and further shoring up of supplies.  National Road Carriers has asked for notification to industry of any Phase changes to be provided with as much lead time as practicable.

Supporting transport operators when the cost of diesel has doubled

National Road Carriers has a wide diaspora of membership. We have approximately 1500 members, who work across all of the transport sectors, operating 1 truck or hundreds, serving customers of all types and sizes.

Calling for a one size fits all response from government is rarely the right thing to do, especially when it comes to financial support.

The government has been clear: they are not going to reduce Road User Charges (RUC) or providing fiscal support – the coffers are empty. Discounting RUC is not the right thing to do, it just robs our roads of maintenance and repair, and we are already behind.

Riding out the doubling of diesel prices is going to come down to freight customers doing the right thing and paying transport operators for the increases.

Transport operators also need to play fair and be transparent about how they are passing on fuel costs with their customers, and the fuel adjustment factor  (FAF) is one tool available that helps do that.

Help us understand where fuel cost recovery is working and where it is not

In our conversations with government officials, they often ask what are the impacts of the doubling of diesel to transport operators. 

At NRC we want to make sure that across our broad membership base we are passing on an accurate view of what our members are experiencing so please take 5 minutes to email us your answers to the following questions below

The better picture we have, the more we can work with government on your behalf to help.

1. Have you been able to pass on diesel cost increases to your customers?

2. If not, what are the reasons are that fuel costs can’t be passed on?

3. Do you feel your sector is experiencing more difficulties than others that we should know about?

Strait of Hormuz uncertainty, but NZ fuel supply remains strong

As I write this a fragile two-week ceasefire agreement between the United States and Iran is tentatively holding.  One of the terms of that agreement is that Iran opens the Strait of Hormuz, which if held to may see some fuel shipping out of the Persian Gulf, providing shipping companies have confidence their vessels will be able to navigate a safe passage.

We watch and wait.

New Zealand Diesel Stocks

Diesel stocks remain stable, with just under 52 days of diesel reported Sunday 5 April. On shore, domestic distribution to pump sites also remains stable, with very few sites reported as running dry after the initial significant spike in demand fuel companies experienced in the first two weeks. 

We are experiencing a major price shock, but not a supply shock.

Oil supply from Singapore and South Korea (providing approximately 80% of NZ supply) continues to be robust. Singapore has significantly increased import flows since the start of the conflict and is maintaining higher than normal volumes. It has among the most flexible refineries in the world for processing multiple crude blends, making it possible to import crude from many markets outside of the Middle East. Both South Korea and Singapore have increased crude supplies from the United States.

The takeaway for transport businesses is that there is no need to stockpile fuel, our supply remains strong.

 National Road Carriers continues government engagement

We continue to attend daily meetings with the Ministry of Business, Innovation and Employment, and the Ministry of Transport.

Our principal focus has been to support Government efforts to explore how to increase road freight productivity to help offset fuel costs and providing expertise on how fuel allocation could work if Phase 3 or 4 was ever implemented, which is looking increasingly unlikely. 

Unfortunately, regulatory changes providing meaningful uplifts to productivity are looking increasingly unlikely in the near term.  Approving increased mass (heavier loads) is not a silver bullet for many reasons – mainly because our bridge stock and roading network has not been maintained well enough. This is another reason why NRC does not support a Road User Charge (RUC) discount – RUC pays for our road and bridge maintenance, and New Zealand is already years in arrears in maintaining our road network.

Outside of mass, the other option is to increase length. This is being explored, but even with regulatory approval it takes time to build and configure the trailers required, so would only deliver a very modest uplift in productivity in the short term.

Member support

The NRC team remains busy providing support to members through the crisis. We are seeing a significant increase in new members joining as transport operators look for help through the crisis.  Services in demand are advice on the fuel adjustment factor and engaging with customers, cost modelling and understanding what the government response means for transport operators.

Don’t forget to use our member hub for the latest updates and guidance.

We are very aware that over the next week or so fuel accounts come up for payment.  This will place a lot of transport operators under cashflow distress. Make the most of NRC services, we are here to help you through the tough times, and to lend a supportive ear when you are going through hardship. You can contact us at enquiries@natroad.co.nz

Justin