Excellent analysis. I must read Dave Heatley's "History and Future of Rail in NZ" again. It is good that he has a colleague also doing sensible truth-confronting analysis. The facts should be known by every elected representative in national and local government, and bureaucrats who SHOULD know but often don't. It is not just on this subject either, that bureaucrats do NOT possess the background knowledge they should. I've met "urban planning" people who have NO IDEA of the history of evolution of urban areas and economies over the last 200 years. Transport is a crucial ingredient. You are quite right that "integrated" systems are essential where fixed route large-vehicle transport is concerned. Japan's urban rail systems are an object lesson that astonishingly, the rest of the world has learned no lessons from. The force of gravity that is economic rent in land, drives dispersion and creates the need for flexible, small-unit urban transport. The only way to reverse the direction of this force is "integrated" systems where the transport system is owned by the people who own the land that is served by the transport system. Hence, they operate both for the benefit of each other. In the status quo in the rest of the world, the private owners of urban sites are perfectly happy to reap whatever economic rent they can for whatever reason, but this does not harmonize with "maximizing ridership". In fact as the owners of the sites capture increased economic rent on the occasion of "public transport investments" at taxpayer expense, that is a force at work to minimize the "trip attractor" aspect of their site. In Japan, the owners of the sites keep their market rents low to make it more likely that ridership will increase; and there are multiple such systems in Tokyo and other cities, all competing WITH each other for "tenants / riders / trip attractors". Nothing else "flips" the economic rent gravitational forces at work.
Targeted taxes / rates / fees on the site owners is riddled with perverse incentives that make this far from a substitute for "integration".
I think it has nothing to do with whether Rail is private or publicly own but has everything to do with environmental factors. It far cheaper, and quicker to drive or fly. Unlike the UK that has an amazing train system and the population to support it, NZ doesn't. Canada also has difficulty sustaining good rail systems but for different reasons. While the population is much larger, so is the land mass. There's been talk for years about fast rail between Ottawa and Toronto but it doesn't eventuate because there's a significant risk of not seeing the returns.
Spot on, Bronwyn. Early 70s I was Deputy Project Manager of the NZ Transport Policy Study. Coastal shipping was on its last legs. NZR was surviving due to a monopoly (constraints on road transport competing with rail services) and taxpayer tolerance. Rail argued (irrelevantly) it deserved to survive because in an earlier era it had served the nation well.
At the end of the 70s, as Adviser to the PM (in the so-called Think Tank), it was clear that NZR was around 100% over-staffed compared with international practice. A plan was devised to trim that fat and corporatise rail as an SOE-- a step towards privatisation. If privatised rail could not compete it would be the private sector's (not government's) decision to close it.
At that point, the government took it back!
Today NZ has an excellent road system and a state of the art truck fleet which is comfortably handling the transport task. There are no artificial impediments to competition from rail and sea. We are each entitled to hopes and aspirations for transport by rail and sea. Manifestation of such hopes should be confined to ensuring all modes of transport compete on a level playing field. If there are circumstances where rail or sea is superior to long-haul road it can step up and prove it.
Re: "Today NZ has an excellent road system and a state of the art truck fleet" The amount of money being programmed for new roads and maintenance would suggest that this is not the case. Driving on roads in parts of the country - e.g. Northland - is also evidence to the contrary.
There are 3 areas where I think NZ can substantially improve freight delivery performance:
1. At Auckland Port, transfer containers directly from ship to rail boggies. The current process seems to be as inefficient as possible: ship to wharf, wharf via straddle carriers to storage area, up to high level by forklift. Process reversed when a truck arrives.
2. At Auckland Port, transfer cars directly to rail (there is a car/passenger service in the east coast of America) whichan Americanfriendused totraveltoFlorida.
3. Restore coastal shipping to its former capacity and transfer containers from ship to wharf and then straight back to coastal shipping.
1. & 3. The wharf crane arms would need to be extended.
As more Ports have acquired Inland port operating depots allowing containers to be moved by rail to those facilities which will help with congestion at the port.
Point 3 more use of coastal shipping is something that clearly requires attention. Why move domestic Inter Island freight from Auckland by rail across the Strait and onwards to Christchurch. This is really the only reason KiwiRail are asking for rail enabled ferries.
We only require Roll on Roll off passenger ferries for moving passengers, cars and road transport vehicles.
I'm keen to know more about the potential for coastal shipping, and what it is that keeps it less significant in our national transport system.
Rail activists are fixated on the efficiency of the fully laden rolling stock at cruising speed, when it is necessary to consider "the whole system", which is why trucks on roads are better for so much of the freight in spite of the lower rolling efficiency that green rail activists lament. I point out to them that hulls on water are even more efficient and yet rail in the 1800's carved out a share of transport from the pre-existing coastal, rivers and canal system. Why didn't humanity just keep building canals, if the energy efficiency of the freight in movement on the main leg is paramount?
Interestingly, France is seriously considering a new canal from Paris to the coast. This is an excellent illustration of how an "older" transport system can still be relevant in particular economic and geographic circumstances. Rail needs to be regarded the same way versus road transport.
But for an island nation like NZ, it is crazy to be foregoing potential efficiencies from coastal shipping, which I believe we did for decades (protect the railways, keep the Unions happy). I don't know the current situation. "Cabotage" - using the international cargo ships that traverse our coast anyway with their spare space between NZ ports - may not be a significant provision in the context of national freight needs but it would be crazy to perpetuate a ban on it.
We looked into coastal shipping with some urgency following the Kaikoura earthquake. Several operators were prepared to step forward - as long as the government was prepared to underwrite the service by, if I remember correctly, about $600k a year. Issues seemed to be:
a) same as for rail, freight doesn't go point to point and needs multiple handling
b) customers don't consider it, even for non time-sensitive product, not sure if this is price, convenience, or simply that it isn't on the radar of freight forwarders?
c) domestic maritime shipping laws in NZ that prohibited competition in the coastal market by foreign ships picking up and offloading at NZ ports to "protect" NZ's coastal shipping industry
Maybe Rail is too highly subsidised for coastal shipping to compete for the same high volume low value cargo too, and government picked rail, because there were more regional jobs/votes in it?
Re: "The issue of road user charges not covering the entire cost of road use, leading to an effective government subsidy, is irrelevant: road users pay at least something to government for their use of roads. Rail pays nothing". Why is it irrelevant? If freight trucks only pay part of the cost of road building and maintenance then they charge their customers less than they would if they faced full road wear costs = a disincentive to rail freight and create more road wear. Road wear increases exponentially (to the power of 4) with increased axle weight so this is a significant issue. https://pavementinteractive.org/reference-desk/design/design-parameters/equivalent-single-axle-load/
Is there really a level playing field - road v rail v shipping? Is public money into these modes proportionate, or is it heavily weighted towards subsidising road freight?
Re the actual future we face (consequence of exceeding at least 6 of 9 basic planetary biophysical thresholds, including climate breakdown and biodiversity crisis; planetary renewable resource overshoot, limits to growth) - is it still valid to think that air travel and private vehicle travel will be realistic options compared with passenger rail?
In the assessment of the economic return of rail was the estimated public benefit of the rail system as it is now factored in - I am referring to the 2021 study for Kiwirail that found between $1.7 and $2.1 billion of economic benefit.
Excellent analysis. I must read Dave Heatley's "History and Future of Rail in NZ" again. It is good that he has a colleague also doing sensible truth-confronting analysis. The facts should be known by every elected representative in national and local government, and bureaucrats who SHOULD know but often don't. It is not just on this subject either, that bureaucrats do NOT possess the background knowledge they should. I've met "urban planning" people who have NO IDEA of the history of evolution of urban areas and economies over the last 200 years. Transport is a crucial ingredient. You are quite right that "integrated" systems are essential where fixed route large-vehicle transport is concerned. Japan's urban rail systems are an object lesson that astonishingly, the rest of the world has learned no lessons from. The force of gravity that is economic rent in land, drives dispersion and creates the need for flexible, small-unit urban transport. The only way to reverse the direction of this force is "integrated" systems where the transport system is owned by the people who own the land that is served by the transport system. Hence, they operate both for the benefit of each other. In the status quo in the rest of the world, the private owners of urban sites are perfectly happy to reap whatever economic rent they can for whatever reason, but this does not harmonize with "maximizing ridership". In fact as the owners of the sites capture increased economic rent on the occasion of "public transport investments" at taxpayer expense, that is a force at work to minimize the "trip attractor" aspect of their site. In Japan, the owners of the sites keep their market rents low to make it more likely that ridership will increase; and there are multiple such systems in Tokyo and other cities, all competing WITH each other for "tenants / riders / trip attractors". Nothing else "flips" the economic rent gravitational forces at work.
Targeted taxes / rates / fees on the site owners is riddled with perverse incentives that make this far from a substitute for "integration".
I think it has nothing to do with whether Rail is private or publicly own but has everything to do with environmental factors. It far cheaper, and quicker to drive or fly. Unlike the UK that has an amazing train system and the population to support it, NZ doesn't. Canada also has difficulty sustaining good rail systems but for different reasons. While the population is much larger, so is the land mass. There's been talk for years about fast rail between Ottawa and Toronto but it doesn't eventuate because there's a significant risk of not seeing the returns.
Spot on, Bronwyn. Early 70s I was Deputy Project Manager of the NZ Transport Policy Study. Coastal shipping was on its last legs. NZR was surviving due to a monopoly (constraints on road transport competing with rail services) and taxpayer tolerance. Rail argued (irrelevantly) it deserved to survive because in an earlier era it had served the nation well.
At the end of the 70s, as Adviser to the PM (in the so-called Think Tank), it was clear that NZR was around 100% over-staffed compared with international practice. A plan was devised to trim that fat and corporatise rail as an SOE-- a step towards privatisation. If privatised rail could not compete it would be the private sector's (not government's) decision to close it.
At that point, the government took it back!
Today NZ has an excellent road system and a state of the art truck fleet which is comfortably handling the transport task. There are no artificial impediments to competition from rail and sea. We are each entitled to hopes and aspirations for transport by rail and sea. Manifestation of such hopes should be confined to ensuring all modes of transport compete on a level playing field. If there are circumstances where rail or sea is superior to long-haul road it can step up and prove it.
Re: "Today NZ has an excellent road system and a state of the art truck fleet" The amount of money being programmed for new roads and maintenance would suggest that this is not the case. Driving on roads in parts of the country - e.g. Northland - is also evidence to the contrary.
Hi Bronwyn. Well written!!
There are 3 areas where I think NZ can substantially improve freight delivery performance:
1. At Auckland Port, transfer containers directly from ship to rail boggies. The current process seems to be as inefficient as possible: ship to wharf, wharf via straddle carriers to storage area, up to high level by forklift. Process reversed when a truck arrives.
2. At Auckland Port, transfer cars directly to rail (there is a car/passenger service in the east coast of America) whichan Americanfriendused totraveltoFlorida.
3. Restore coastal shipping to its former capacity and transfer containers from ship to wharf and then straight back to coastal shipping.
1. & 3. The wharf crane arms would need to be extended.
Cheers Bruce
Hi Bruce.
You have made some excellent comments.
As more Ports have acquired Inland port operating depots allowing containers to be moved by rail to those facilities which will help with congestion at the port.
Point 3 more use of coastal shipping is something that clearly requires attention. Why move domestic Inter Island freight from Auckland by rail across the Strait and onwards to Christchurch. This is really the only reason KiwiRail are asking for rail enabled ferries.
We only require Roll on Roll off passenger ferries for moving passengers, cars and road transport vehicles.
More use of the 'Blue Highway'
It's free
It's cost effective
It's socially acceptable
And
It's environmentally friendly.
Restore Coastal Shipping.
I'm keen to know more about the potential for coastal shipping, and what it is that keeps it less significant in our national transport system.
Rail activists are fixated on the efficiency of the fully laden rolling stock at cruising speed, when it is necessary to consider "the whole system", which is why trucks on roads are better for so much of the freight in spite of the lower rolling efficiency that green rail activists lament. I point out to them that hulls on water are even more efficient and yet rail in the 1800's carved out a share of transport from the pre-existing coastal, rivers and canal system. Why didn't humanity just keep building canals, if the energy efficiency of the freight in movement on the main leg is paramount?
Interestingly, France is seriously considering a new canal from Paris to the coast. This is an excellent illustration of how an "older" transport system can still be relevant in particular economic and geographic circumstances. Rail needs to be regarded the same way versus road transport.
But for an island nation like NZ, it is crazy to be foregoing potential efficiencies from coastal shipping, which I believe we did for decades (protect the railways, keep the Unions happy). I don't know the current situation. "Cabotage" - using the international cargo ships that traverse our coast anyway with their spare space between NZ ports - may not be a significant provision in the context of national freight needs but it would be crazy to perpetuate a ban on it.
We looked into coastal shipping with some urgency following the Kaikoura earthquake. Several operators were prepared to step forward - as long as the government was prepared to underwrite the service by, if I remember correctly, about $600k a year. Issues seemed to be:
a) same as for rail, freight doesn't go point to point and needs multiple handling
b) customers don't consider it, even for non time-sensitive product, not sure if this is price, convenience, or simply that it isn't on the radar of freight forwarders?
c) domestic maritime shipping laws in NZ that prohibited competition in the coastal market by foreign ships picking up and offloading at NZ ports to "protect" NZ's coastal shipping industry
Maybe Rail is too highly subsidised for coastal shipping to compete for the same high volume low value cargo too, and government picked rail, because there were more regional jobs/votes in it?
Re: "The issue of road user charges not covering the entire cost of road use, leading to an effective government subsidy, is irrelevant: road users pay at least something to government for their use of roads. Rail pays nothing". Why is it irrelevant? If freight trucks only pay part of the cost of road building and maintenance then they charge their customers less than they would if they faced full road wear costs = a disincentive to rail freight and create more road wear. Road wear increases exponentially (to the power of 4) with increased axle weight so this is a significant issue. https://pavementinteractive.org/reference-desk/design/design-parameters/equivalent-single-axle-load/
Is there really a level playing field - road v rail v shipping? Is public money into these modes proportionate, or is it heavily weighted towards subsidising road freight?
Re the actual future we face (consequence of exceeding at least 6 of 9 basic planetary biophysical thresholds, including climate breakdown and biodiversity crisis; planetary renewable resource overshoot, limits to growth) - is it still valid to think that air travel and private vehicle travel will be realistic options compared with passenger rail?
In the assessment of the economic return of rail was the estimated public benefit of the rail system as it is now factored in - I am referring to the 2021 study for Kiwirail that found between $1.7 and $2.1 billion of economic benefit.
Thorough analysis. Seems the answer is more roads.