$15.00 Logistics & Transport Volumenz 18 Issue 4 THE OFFICIAL PUBLICATION OF CILT NEW ZEALAND June 2020

NAPIER PORT – building for the future

ON THE ROAD AGAIN! – Our transport modes’ recovery after Covid-19

DraftFrom Newbooming Zealand to beleaguered Rail Plan released – the Oceania cruise market RoVE,Port Nelson CoVEs – andgateway WDCs to –the the top reform of the of South vocational education ContainerCo’sIndependent contractor electric heavy or an vehicle employee? hits the road ON THE COVER InterCity, NZ’s national coach service, LOGISTICS & TRANSPORT NZ restarted on Queen’s Birthday IS THE OFFICIAL JOURNAL OF Weekend after the Covid-19 lockdown. THE CHARTERED INSTITUTE OF To read about how our other transport LOGISTICS & TRANSPORT NZ modes fared, see pages 4–9. Photo courtesy of Entrada Travel Group 13 Contents

On the road again 4

From booming to beleaguered – the Oceania cruise market 10

Port Nelson – gateway to the top of the South 13

GPS 2021 16 10 Independent contractor or an employee? 18 CILT NZ congratulates Morris McFall QSM 19

In the next edition The editorial team welcomes expressions of interest for submitting an article for the September 2020 edition of this journal. Contributors should in the first instance contact the editorial convenor, Murray King (email [email protected]) to discuss their article. 18 Deadline for the September 2020 edition: Friday 21 August 2020

16 4

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CILT NZ National Office: Advertising Contact: Published under contract by: PO Box 1281, Shortland Street, CILT national office Aston Publishing Ltd Auckland Tel: 09 368 4970, Email: [email protected] PO Box 340173, Birkenhead, Tel: 09 368 4970, Fax: 09 368 4971 Editorial Contact: Auckland 0746, New Zealand ISSN 2703-3236 (Print) Lynne Richardson, Aston Publishing Ltd Fax: 09 480 4768 ISSN 2703-3244 (Online) Tel: 09 481 3005, Email: [email protected] Email: [email protected]

Disclaimer: This publication is the official magazine of the Chartered Institute of Logistics and Transport New Zealand Inc (CILT NZ). It is published quarterly. All material appearing in this publication is copyright and may not be reproduced without the permission of CILT NZ. The views expressed in this publication are not those of the editorial committee, CILT NZ, its council, officers or Aston Publishing Ltd, unless expressly stated as such. June 2020 3

Nominations open for the 2020 CILT Photo by Mel Waite Photography Mel Waite by Photo Rick van Barneveld, winner of the Sir Bob Owens Award for Outstanding Contribution to the Logistics, NZ Awards Supply Chain Sector and Community in 2019, with CILT NZ president Keith Robinson

EACH YEAR, CILT NZ recognises individu- category have completed some incredible raise health and safety issues, a health and als and organisations for their academic, research with wide application in the field safety risk management programme, regular industry expertise and overall excellence of transport, logistics and supply chain,” audit reports and evidence of collaboration with a series of awards presented at the says Fiona. “All research is required to be with others to achieve the highest levels of annual gala evening and celebratory dinner. original and innovative, and demonstrate health and safety within the organisation,” This year, the awards have had a bit of an a clear potential to improve one or more Fiona explains. Judging will include a site overhaul. Awards convenor Fiona Knight elements in their chosen field of study. visit by one of the judges. says it’s time for businesses to put their The prize of $3000 goes towards the award The final award in this category is for the thinking hats on and get their nominations winner’s attendance at a conference in Rising Star/Young Employee of the Year, in for consideration. Australasia to present the results of their sponsored by DRD Consulting. “This award “We know that organisations and indi- thesis. They must also make a presentation was introduced last year and we received viduals in the transport, logistics and to a CILT event or meeting.” many really good nominations,” Fiona supply chain sector truly appreciate being notes. “I’m hoping to see more young pro- recognised for their efforts to improve Communications and fessionals under the age of 35 being nomi- their business or personal standing, either industry category nated by their employers this year too.” through innovation, education and training, The CILT Communications Award has a long or through research and development of history and recognises the best article or Excellence awards new products and services,” she says. “CILT presentation on an aspect of supply chain There is no change to the awards in the NZ wants to recognise their hard work and management, logistics or transport. “We’re excellence category, these being the Young determination.” looking for nominations for written articles Achiever of the Year, the Norman Spen- This year, nominations for the awards from editors, publishers, writers or journal- cer Memorial Medal for Contribution to start closing on 15 August, with 31 August ists who have published original work Transport and the Institute, and the Sir Bob being the ultimate deadline for all. The about or relating to transport, logistics or Owens Award for Outstanding Contribu- various categories are outlined on the CILT supply chain management,” Fiona com- tion to the Logistics, Transport, Supply NZ website along with the criteria which ments. “Alternatively, we’re looking for the Chain Sector and Community. all nominations must meet. “We welcome best presentation to a supply chain, logis- “As always, the national council of CILT nominations from across the industry tics or transport forum, or a CILT meeting NZ will ask for nominations for the Nor- and from all transport modes,” Fiona says. in the past year.” man Spencer Memorial Medal and Sir Bob “Some of the awards are not restricted The Award for Excellence and Innovation Owens Award from among our own net- to CILT NZ members, so check the entry is proudly sponsored by Dexion. “This is a work of branches and sectors. Nominations criteria and start preparing your nomina- new award,” Fiona says. “It will be presented are to be supported by full details of the tion now.” to an organisation for a project or initiative nominee’s achievements, contributions to All nominations must be made electroni- that addresses a challenge they have faced community and experience,” Fiona says. cally – the nomination form can be down- in a unique way, and includes integrity in “The Young Achiever Award is open to loaded from the CILT NZ website along relationships and innovation in application anyone under the age of 35 years, but their with a declaration form regarding intellec- – values that Dexion holds dear. Nomina- employer or an appropriate professional tual property where necessary. tions must demonstrate the uniqueness association must sponsor the nominee for of the solution, which represents out-of- the award by sending a letter of endorse- Academic and research excellence the-box or cutting-edge original thinking, ment outlining their reasons for sponsoring This year there will be three awards for as well as the beneficial impact on the them.” academic and research excellence: the organisation.” And finally, there are still sponsorship MITO/CILT scholarship for a graduate of The Safety Made Simple Award is opportunities available for some of the MITO, the industry training organisation for another new award and will recognise awards, if there are any organisations that the logistics and transport sector; the top innovation or best practice in health and are keen to be involved. “Please do get in student in the CILT UK Diploma in Logis- safety in the transport and logistics sec- touch,” Fiona says. tics and Transport programme, run by the tors. “Nominations must include evidence Logistics Training Group; and the award for of a full commitment right through the Full criteria for the awards and nomination outstanding research achievement for a organisation to exceed the basic regulatory forms are available from the CILT NZ master’s dissertation or thesis. requirements for health and safety, includ- website: www.cilt.co.nz/awards/categories- “Previous award winners for the latter ing a culture where all staff are able to and-criteria/ 4 Logistics Logistics & Transport & Transport NZ NZ

XXXXXXXXXXX XXXXXXXXXXXXXXXX On the road again

By Lynne Richardson

NEW ZEALAND has achieved what many other countries have failed to do – contained the spread of the coronavirus New Zealand’s freight and passenger transport operators are up and running again after the Covid-19 Covid-19 and eliminated community lockdown, many having to adapt to accommodate Government regulations transmission. Implementing a hard-line responding to the global pandemic,” says essential’ often blocked the way on ports approach to preventing the spread of the Road Transport Forum (RTF) chief execu- for those considered ‘essential’. All those disease, the NZ Government locked down tive Nick Leggett. “And we believe it will involved in the supply chain took a hit the country on 26 March 2020, with only be equally important through the recovery from the essential/non-essential labels as essential services allowed to function. On 8 as the value of export goods surpasses cost-effective freight movement relies on June, the country returned to a new normal, tourism, which has been largely disabled full vehicles on all legs of a journey – for albeit with stringent border restrictions and by global passenger travel disruptions and planes, trucks, trains and ships. a ban on foreign visitors. restrictions. As a trading nation, we need to “Explaining this to Government officials So how did New Zealand’s transport keep the flow of imports and exports going meant they gained a deeper understand- modes fare during the lockdown period, to and from ports and planes to ensure any ing of both the value and nuances of New and how are they recovering post Covid-19? kind of economic recovery.” Zealand’s freight supply chain. We believe How did they adapt to the requirements Mr Leggett says that through the restric- this will be of great benefit moving for- for social distancing and contactless pay- tive Level 4 lockdown, trucks were on the ward, and we welcome the public service’s ments? What innovations did they intro- road keeping essential goods moving. “With interest in making the supply chain work duce and what role did technology play? the country closed for business, this meant for economic good.” CILT NZ spoke to a number of organisations truck drivers were on the lonely roads with Jason Heather, commercial transport and operators across the modes – air, sea, no access to food to buy, or public toilets.” specialist at the National Road Carriers road and rail – to find out. He says the Government’s restrictions did Association, concurs. “As Ports of Auck- not take into account the balance and land and other ports around New Zealand Road transport – a critical role logistics of New Zealand’s supply chain. “By were deemed critical infrastructure and “It’s fair to say that road freight transport saying only essential goods could move, therefore an essential service, the contain- played a critical role in keeping New Zea- this created unintended consequences. ers sector continued to operate. However, land moving once the Government started Firstly, goods that were deemed ‘non- non-essential goods arriving at the ports still had to be removed to allow the port to operate efficiently. This caused some major congestion in the network due to non-essential businesses being closed and not able to receive their goods. “And this wasn’t just restricted to con- tainers,” he adds. “Import vehicles, con- struction materials and aggregates all had to be hubbed somewhere, leading to a lot of double handling. This meant no revenue to the carrier for moving these goods twice for the whole of Alert Levels 4 and 3.”

Safety first Mr Leggett says road freight transport is a safety-sensitive industry, so when the rules of engagement were laid out by the Gov- ernment for business operations through Ports around New Zealand were deemed an essential service and the containers sector continued to the various alert levels, transport operators operate during lockdown, keeping trucking companies busy were able to respond quickly and safely. June 2020 5

less payment and delivery processes which were welcomed by all customers requiring water delivery,” she adds.

Responding to the challenge Nick Leggett says the trucking industry continues to respond quickly and well to the challenges presented by Covid-19. “Some trucks were off the road for the lockdown and businesses have been hit hard, particularly in forestry, which did Road Transport Forum chief executive Nick not make the essential freight list. Like all Leggett: “The Covid-19 experience has certainly businesses, trucking companies want to get National Road Carriers commercial transport shone a light on the value of digitising as much back to full operations as soon as possible, specialist Paula Rogers: “Sharing drivers with business as possible” another company could become the new norm” recover their losses as quickly as they can, “We committed to getting information out and keep good people employed. trucks with some looking at ways to com- to trucking operators – including where “The challenge ahead for the trucking municate better with their drivers. Keeping they could access toilets on the road – as industry, that already operates with tight drivers employed is a big deal as there were quickly as possible, using all available chan- margins, will be the ability to absorb, or some that were made redundant during nels. There was a lot of confusing messages pass on, increasing costs when all busi- lockdown. We are seeing some companies coming out of the Government, and there nesses are tightening their belts.” sharing their drivers with another company, was a high need for trucking companies to which could become the new norm.” know what they were and weren’t allowed to do. We set up a dedicated Covid-19 web Unprecedented challenges for rail page, which has had an enormous amount In late May, the Australasian Railway Asso- of traffic.” ciation (ARA) released the results of its The RTF published a set of health and member survey of rail suppliers, contrac- safety protocols that could be followed tors and freight operators on the impact in Level 3 and beyond. “We worked with of Covid-19 and how the rail industry was WorkSafe to ensure these met the Gov- responding to it. Some 58 member organi- ernment’s expectations. Every business sations responded to the survey, more than has a new view of hygiene,” Mr Leggett half of which employ more than notes. “There are still a lot of paper-based 250 people. businesses that interact with road freight. The survey confirmed that supply chain While people were moving to digital as National Road Carriers commercial transport disruptions, falling customer spending and specialist Jason Heather: “Carriers are struggling fast as they could, we also needed to be to keep up with demand” resource constraints were the biggest issues sure there were safe processes for handling facing ARA members. But it also found paper documents, both on the road and Jason Heather says that since the level the industry is working hard to retain its back at the truck driver’s base. The Covid-19 restrictions have been lifted, the bow-wave people, with most respondents expecting a experience has certainly shone a light on of freight has been difficult to deal with. quick return to normal operations once the the value of digitising as much business as “Carriers are struggling to keep up with pandemic passes. possible.” demand as many of them had to make KiwiRail group general manager Greg Paula Rogers, commercial transport spe- redundancies to stay solvent, and those Miller says Covid-19 presented unprec- cialist at National Road Carriers, agrees. who did not operate at all are trying to edented challenges for KiwiRail, confront- “With trucks now back on the roads, adapt to a different world than the one ing them with the need to keep essential carriers have found themselves having to they left two months ago.” services running while dealing with the embrace the way companies are imple- Carriers were hampered by the protocols fallout from the collapse in tourist numbers menting changes to their safety policies. introduced by the Government to limit and substantial falloffs in freight volumes. Some frustration was felt when protocols the spread of the virus, he adds. “Each It also underlined the vital part that rail has kept changing daily as consultants were delivery and collection point they went in the logistics supply chain for the country. suddenly in a zone they had never been in to had a different procedure around social “KiwiRail was – and is – acutely con- before and almost panicked. As a result, distancing and contact tracing. At some it scious of the need to keep staff and the procedures that were implemented have took longer to register than it did to load public safe, and made that paramount, added extra time for drivers that are trying or unload the goods. This slowed down while also recognising the need to keep to get back to some sort of normality and an already choked supply chain as carriers freight flowing, both on rail and across be financially viable again.” attempted to keep up with demand. Many Cook Strait,” he says. “The Interislander She says social distancing was fairly easy are now trying to do things differently, like ferries played a key role in moving New to achieve, with drivers staying in the cabs using ‘sign-on-glass’ technology and con- Zealanders to where they needed to be of their trucks and carrying no passengers. tactless transactions. These all take time to as the Level 4 lockdown began. Once the Sanitisation products were kept in cabs and train staff and there’s a financial outlay.” lockdown was in place, we continued mov- drivers adhered to guidelines around using Paula Rogers says transport companies ing essential workers and freight between sanitisation stations. “Water carriers in the have implemented a range of new policies the islands. Northland region were kept busy through- to suit their business needs. “Many have “As a precaution, the Aratere became a out lockdown and implemented contact- electronic GPS systems already in their Cont. on page 6 6 Logistics & Transport NZ

KiwiRail’s three scenic services, including the TranzAlpine, were suspended prior to lockdown – overseas tourists are important to their long-term viability Cont. from page 5 freight-only ferry in order to lessen the the long-term viability of the scenic train chances of the service having to be halted services. Government decisions on reopen- because of infection. Measures were also ing the border, at least partially, will be key. put in place to ensure essential parts of “Around our network, works have KiwiRail’s operations, such as the National resumed on important upgrade projects, Train Control Centre, would continue to including on the Auckland network, where operate.” maintenance is needed to cope with growing freight volumes and commuter Rail freight and tourism services passenger services. Work has also begun Mr Miller notes that as New Zealand low- on the Northland line so that after years NZSF executive director Annabel Young: “People ered its alert levels, freight volumes began of under-investment, its track, bridges and who operate ships need to be clear-headed and gradually climbing. “We are tailoring our tunnels will be made resilient and able to able to think fast – this serves them well in a crisis” services to match capacity with demand, carry hi-cube containers.” both for trains and ferries. The export mar- On 14 May, the Government recognised continue in the coming months and years,” ket for meat and dairy continued through the importance of rail, announcing a says Mr Miller. the lockdown, and KiwiRail maintained $1.2 billion investment in the 2020 Budget. its core services to keep those exports It included $400 million towards replac- The value proposition of maritime moving. As forestry and coal have come ing the ageing Interislander ferries and Annabel Young, executive director of the back onstream, we have moved quickly to $421 million to continue the replacement New Zealand Shipping Federation (NZSF), resume those services too. programme for some of KiwiRail’s oldest says the maritime network is important for “Our three scenic services – the locomotives. New Zealand’s economic, environmental TranzAlpine, the Northern Explorer and the The funding also provided $246 million, and social welfare, and vital during emer- Coastal Pacific –were suspended on plus a $148 million top-up of the National gencies when road links are disabled, as 22 March. We continue to look at when Land Transport Fund, towards ensuring after the Kaikoura quake, or when air links and how we will serve the tourism market. New Zealand’s rail network, which includes are disrupted, as with Covid-19. The breakdown of our passengers is com- more than 3000 km of track, more than “With each crisis, the maritime sector mercially sensitive, but a large proportion 1000 bridges and nearly 100 tunnels, is hopes that the value proposition of mari- are foreign based,” Mr Miller adds. “As reliable and resilient. “That investment time – for international connections and with the rest of the New Zealand tourism continues the rebuild of rail that was for local distribution – will be recognised. industry, overseas tourists are important to underway before Covid-19 hit, and will We are concerned that maritime still takes a back seat to road and rail in the national consciousness and the Government’s think- ing,” she says. “New Zealand depends on coastal ships for the delivery of important goods, such as fuel, oil and cement, and moving con- tainerised and bulk cargo around the coast. The road and rail ‘bridge’ between Picton and Wellington is vital for freight and pas- sengers. Coastal ships also come into their own when roads or railways are unusable,” she adds. “Central and local government decisions, as well as port decisions, affect the effi- ciencies and effectiveness of the coastal network. The NZSF is committed to work-

Design credit OSK Shiptech Design credit ing with decision-makers to ensure that Concept design of one of the new Interislander ferries in the Sounds – Budget 2020 included the best policy settings are in place for $400 million towards replacing the ageing fleet the benefit of all New Zealanders. We are June 2020 7

ships and how the impact can be amelio- rated. This is especially the case where health officials are suddenly thrust into making decisions with maritime conse- quences. “Around the world, all dry docks are cur- rently struggling with the impact of 14-day quarantine requirements placed on ships as they arrive in-country to enter a dry dock, or when they return to their home port. In effect, this adds 28 days to the period that a ship is unavailable. The impact on New Zealand coastal shipping, especially the Andrew Beale, commercial manager at Pacifica Auckland Transport chief executive Shane Ellison: availability of the five Cook Strait ferries, Shipping: “The fact that every container delivered “Covid-19 created unprecedented challenges for to the MV Moana Chief was shipped is testament public transport virtually overnight” will be huge. In effect there will be lanes to the resilience of coastal shipping” missing from State Highway 1 between happy to work proactively to bring sector Picton and Wellington for a much longer so there was little adjustment required knowledge to support the policy-making period due to the quarantine require- in terms of adapting to the health and process.” ments.” safety measures introduced as a result of Covid-19, Mr Beale adds. “Apart from some Impacts hard to predict Pacifica’s ‘bubble’ initial tweaking, the rules of engagement to Established in 1906, the NZSF is the key As New Zealand’s only dedicated coastal operate a business under Alert Levels 4 and representative body for New Zealand’s carrier, Pacifica Shipping was deemed 3 were universal, and despite obvious chal- coastal shippers. Members include Coastal ‘essential’ under the Government categori- lenges around managing distancing, there Bulk Shipping, Coastal Oil Logistics (COLL), sation of businesses permitted to operate was relatively smooth conformance.” Holcim, KiwiRail/Interislander, NIWA, during Alert Level 4. “Our vessel MV Moana Operationally, he says, Pacifica has Swire/Pacifica, Silver Fern Shipping, and Chief continued to connect major ports in not been significantly impacted by StraitNZ/Bluebridge Cook Strait Ferries. New Zealand, calling at Tauranga, Auck- Covid-19 regulations and protocols. Each of these companies and their vessels land, Lyttelton and Nelson on her normal “However, commercial repercussions were were affected differently by the lockdown fixed-day weekly cycle,” says Andrew Beale, evident from the first week of lockdown, and its consequences, Ms Young says. commercial manager at Pacifica Shipping. with the forecasted drop in volumes and “The main impact of the virus on coastal Resourcing and technology enabled revenue, because we could only carry shipping depended on how the Covid-19 Pacifica’s land-based team to function goods from ‘essential’ businesses that con- lockdown affected both demand and the remotely when commuting to the office tinued to operate. That said, Pacifica has availability of other options. These impacts was not an option, as well as supporting not sought Government support packages, were hard to predict and necessitated team culture and wellbeing via regular and our liftings have slowly rebuilt as the operators being able to read the operating FaceTime calls and virtual meetings. alert levels have scaled down. environment and react quickly. People who “Our crew of thirteen on the MV Moana “To all intents and purposes, Pacifica is a operate ships need to be clear-headed and Chief received appropriate PPE equipment domestic transport carrier and, as such, able to think fast. This serves them well in and were restricted from having contact the majority of our movements are multi- a crisis. It is a strength of the New Zealand with stevedores during cargo operations,” modal. Whilst our prime mover is a maritime environment that we have many Mr Beale says. “To maintain their ‘bubble’, 1700 TEU capacity vessel, we utilise trucks operators making independent assessments crew were confined to the vessel dur- to deliver the first and last miles and can of their operational environment. ing their four-week rotation and all shore link with rail from/to the nearest port,” “By way of example, a shortage of trucks leave was suspended. Thankfully for them, Mr Beale says. opened up an opportunity for bulk the vessel is in a different port four times “A large percentage of our cargo profile is movements by ship; fewer international a week, so they did not have to wait long classified as FMCG (fast-moving consumer ships coming into our ports increased to see some familiar faces, albeit from a goods) and consequently Pacifica is well the demand for container movement by socially acceptable distance.” versed in managing this vital supply chain, coastal operators; reduced demand for ‘Zero Harm’ is a primary focus at Pacifica which elevated in importance during the fuels (especially cars, trucks and planes) and across all Swire Shipping businesses, Cont. on page 8 reduced the demand for fuel deliveries, but increased the demand for ships to be used for storage; the movement of pas- sengers across Cook Strait to near zero seriously affected the Cook Strait ferries; and the rules around ‘essential goods’ were problematic for the wider supply chain and took a while to sort out with officials.” Ms Young says Government decisions in respect of the crisis also affected coastal ships. “We have significant concern that across the Government there is a lack of Pacifica Shipping was deemed an ‘essential service’ at Alert Level 4 and the MVMoana Chief continued to call at Tauranga, Auckland, Lyttelton and Nelson during lockdown institutional knowledge of what impacts on 8 Logistics & Transport NZ

Cont. from page 7 lockdown. As a measure to take pres- sure off our labour-restricted shippers, we waived container detention charges, extended our container free-time period and withdrew cancellation fees,” he adds. “The fact that every container delivered to the MV Moana Chief under Covid-19 restrictions was shipped is testament to the resilience of coastal shipping and all parties involved in the supply network who adapted quickly to unprecedented chal- lenges. “If we’ve learned anything since 26 March – and not just about our colleagues’ taste InterCity’s national coach services restarted on Queen’s Birthday Weekend in home decor courtesy of Zoom meet- ings – it’s that ‘business as usual’ will not passengers were no longer being accepted whole country to stamp out Covid-19,” says prepare you for the unusual challenges yet and bus drivers would only do drop-offs Sam Peate, general manager, NZ Coachlines to test us.” until it was safe to accept people again. and Auckland Tourism, at Entrada Travel “We provided this real-time occupancy Group, the parent company of InterCity. The impacts on public transport data in our public APIs too, which meant “The move to Level 2 in mid-May meant Covid-19 created unprecedented chal- other third-party apps or services could we were permitted to operate, so long as lenges for public transport virtually also present this information in their apps. we were following Government guidelines overnight, says Auckland Transport’s chief The real-time information provided to the – especially around contact tracing and executive, Shane Ellison. “Whether it was app was based on live data from AT HOP physical distancing. helping ensure that essential workers card on and off tags, which also allowed us “When our customers book travel, our could move around the city during lock- to monitor passenger numbers and make booking system stores passenger names, down or making sure more Aucklanders fast adjustments to services if required email addresses and phone numbers, and could use transport as nationwide restric- due to changes in demand. We worked to so we were already set up for contact trac- tions eased, Auckland Transport has been make those changes as quickly as possible ing. The physical distancing rules, however, working hard to ensure people can safely and again advised customers to plan their provided us with several challenges. We get to where they need to go,” he notes. journey ahead. Registering AT HOP cards followed Government guidelines and “We stopped accepting cash on public would also have helped with contact trac- worked with our teams to make sure that transport and we only boarded buses ing, should it have been required.” we kept our drivers and passengers physi- from the back door, both of which Mr Ellison says the update to AT Mobile cally separated throughout the boarding, helped to reduce the possible spread is another example of the Auckland travel and offboarding components of their of Covid-19. We put up signage to show Transport team working to respond to an travel.” customers the best places to sit to unprecedented situation to keep custom- The most pressing physical distancing maintain the two-metre physical distanc- ers safe. “Those who were travelling were challenge was seating capacity, Mr Peate ing required by the Ministry of Health, as able to make an informed decision about says. “Around 90% of our bookings are for well as stickers to show the capacity of which service to take for their health and single travellers, and so the lack of regular each vehicle as it approached. We also safety. Our innovation with AT Mobile and group ‘bubbles’ meant that we had to cap installed more hand sanitising stations, ability to make quick adjustments based on our sales at 50% of capacity. On most of and we took the cleaning of our buses, real-time data have received international our routes we need a load factor of above trains and ferries to a new level using attention. I’m proud to say our teams have 60% to cover our costs, and therefore the industrial-grade products or fogging.” already been sharing our approach and stark reality was that any services we oper- And Auckland Transport didn’t stop at learnings with other transport agencies, ated would likely be at a loss. physical solutions, Mr Ellison adds. “Our such as TransLink in Vancouver and the “The prospect of not operating any ser- team knew that we could do more from Massachusetts Bay Transportation Author- vices was obviously daunting for us, but it a data perspective and create innovative ity in Boston.” was even more worrying for our customers, solutions to not only help our network to many of whom do not have access to any move more smoothly during these unique Physical distancing and other form of transport, live in remote rural times, but also give peace of mind to our seating capacities areas, and rely on us to get them to their customers. It wasn’t just passenger transport services workplace or education, and to connect “During lockdown, Auckland Transport within our cities that were affected by the them with friends and family,” he adds. introduced a major upgrade to its app, AT lockdown. Travel around the country wasn’t “We have received an immense amount of Mobile, which showed how many people permitted at Alert Levels 4 and 3, meaning feedback from our customers over the past were on a bus or train at any given time. InterCity, which operates New Zealand’s weeks about how important the InterCity This feature allowed people to see if the largest passenger transport network (more network is to them. As a result, as soon as recommended physical distancing between than 130 services each day to 600 destina- the Level 2 rules became clear, we began other passengers of two metres would tions around the country), had to curtail its working on a plan to re-establish our ser- be achievable before the service even services immediately. vices as quickly as possible.” approached. Once a bus or train was at its “We accepted these restrictions as being The InterCity team worked on reshaping safe-distance capacity, the app showed a vital part of the effort made by the a ‘cutdown collection’ of services that June 2020 9

were increasingly cancelled in response to escalating border restrictions. But once New Zealand closed its border to all those except returning New Zealand citizens, residents, or those with an exemption and agreeing to quarantine or mandatory isolation, it became a war to protect vital elements of the aviation sector.” He says a strategic alliance was born – the New Zealand Aviation Coalition (NZAC). New Zealand’s key tourism airports, the NZ Airports Association and BARNZ Sam Peate, general manager, NZ Coachlines and together started negotiations with the Auckland Tourism, at Entrada Travel Group: “We Government and its ministries. “NZAC’s BARNZ executive director Justin Tighe-Umbers: identified that by operating around a third of our ambition is to protect as much of the “It is difficult to imagine just when the frequency pre-Covid services, we could reconnect around of flights to New Zealand prior to Covid-19 will 70% of our network” aviation sector as possible, so that post return” Covid-19, vital people and infrastructure would allow them to open up as much of critical to rebuilding our air connec- Tasman Cargo were the first beneficiaries of their network as possible. “We identified tions will remain in place. The Ministry of the scheme,” Mr Tighe-Umbers says. that by operating around a third of our Transport (MoT) put it succinctly when it NZAC’s focus has now turned to being pre-Covid services, we could reconnect publicly stated air services are vital to New allowed to reinstate some international around 70% of our network, and we were Zealand’s economy, with almost all tourist passenger flights – first across the Tasman, extremely pleased to be back on the road arrivals, and 14% of exports by value, being second the Pacific, and then to selected on Queen’s Birthday Weekend,” Mr Peate carried by air. international hubs. “We have shown that says. “Just take the people who load aircraft as we can safely manage people through Now that the country is at Alert Level 1 an example,” Mr Tighe-Umbers says. “Load- airports and on flights through the quickly and physical distancing rules have relaxed, ing and balancing a large passenger plane is growing number of domestic flights since InterCity is looking forward to playing its a highly skilled occupation. Those people New Zealand returned to Level 2 on 13 part in getting New Zealand moving again. are just some of the skilled workforce that May,” Mr Tighe-Umbers concludes. “There is less frequency than before – this we need to ensure does not disappear “For aviation and the rest of the econ- means we can concentrate passenger from the sector. The MoT was very quick to omy, we believe the focus now should be demand and be more efficient with our understand that.” on risk management and economic growth. costs. The reduced frequency also means The Government responded on 19 March Airlines are well versed with risk manage- that we can use our largest-capacity with the first tranche of a $600 million ment and have responded quickly and double-deck fleet to operate as much of aviation relief package: $163 million to responsibly around Covid-19.” the network as possible,” he notes. pay passenger-based Government charges “We have been in constant communica- and $37 million to cover Airways-related Waka Kotahi NZ Transport Agency tion with the Government to make sure fees from March to August; $70 million to weekly reports they are aware of the vital part that Inter- Airways to help offset declining revenue; In the first week of lockdown at Alert Level City plays in providing transport accessibil- and any other border fee increases put 4, Waka Kotahi NZ Transport Agency insti- ity to communities all over New Zealand. on ice for 12 months. At the same time, gated a continuous monitor across New These discussions are still ongoing, but we as majority shareholder, the Government Zealand to assess the impact of Covid-19 are very encouraged at the response we’ve offered loans of up to $900 million to Air on people’s transport choices. The in-field had so far.” New Zealand. questions started on 3 April and the moni- Then at midnight on 19 March, the New tor is expected to run for a minimum of The key to aviation survival Zealand border closed. Passenger numbers eight weeks. The nationally representative Of all the transport modes, it is perhaps air were choked to a trickle. “Freight became study offers weekly insights and high-level travel that has been affected the most by the only thing that kept some airlines flying analysis of how people responded in their Covid-19, with airlines around the world to New Zealand,” says Mr Tighe-Umbers. transport choices, their perceptions and mothballing aircraft and making thou- “Others suspended services completely. attitudes to different modes of transport, sands of pilots and crew redundant. Board With more than 90% of air cargo capacity and how these changed under the different of Airline Representatives NZ (BARNZ) gone, the Government quickly recognised Covid-19 alert levels. represented 28 airlines before Covid-19, the need to ensure essential supplies were and executive director Justin Tighe-Umbers able to cross the border and it negotiated To access these reports, visit www.nzta. says it is difficult to imagine just when the some early freight deals.” govt.nz/resources/covid-19-impacts-on- frequency of flights they brought to New In its May Budget, the Government transport/ Zealand from all parts of the world will announced a $330 million short-term and return. market-led freight deal with some carri- “Right now, BARNZ and its colleagues in ers. “The funding guarantees cargo on key the aviation industry are firmly focused on routes under agreements with those car- keeping the sector capable of being rebuilt riers. Carriers can then offer that capacity Lynne Richardson is – and quickly,” he notes. “When Covid-19 directly to freight customers on commer- the editor of FTD and NZ Construction News started its stranglehold, airlines started cial terms. Air New Zealand, China Airlines, magazines fighting a battle of attrition as flights Emirates, Freightways Express, Qantas and 10 Logistics & Transport NZ

From booming to beleaguered – the Oceania cruise market The cruise industry has been hit hard by the Covid-19 pandemic – cruise executives should use the downtime to contemplate their future business strategies By Neil Douglas

A YEAR can be a long time in demand ania market (Australia, New Zealand and cruise ship, owned by Carnival Corpora- forecasting! Back in April 2019, I co- the Pacific Islands). What happens in tion, set sail from Sydney on a 13-day cruise authored an article for this magazine about Sydney affects New Zealand and the wider around New Zealand. It visited Fiordland, the surging New Zealand cruise market. Oceania market. Port Chalmers, Akaroa and Wellington. Its Between 1999 and 2019, cruise ship visits In 2019/2020 I assisted in a demand and visit was cut short at Napier on 15 March had increased five-fold from 40 to 191. Pas- economic appraisal of developing a third because some Covid-19 swabs needed to senger numbers had increased twenty-fold cruise terminal at Yarra Bay near Port be tested. from 18,000 to 333,000 reflecting a four- Botany. This was until April 2020 when The ship arrived back in Sydney on fold increase in ship size from an average of the NSW Transport and Ports Minister 19 March and the 2700 passengers onboard 470 to 1800 passengers. announced the proposal had been put on were allowed to disembark. On 20 March, Our article followed on from research I’d indefinite hold. The terminal was no longer the NSW Health Minister announced that done on the Australian cruise market as seen as a priority. Australia was in the 3 of 13 people had tested positive for part of assessing a new cruise terminal for midst of the Covid-19 crisis and the cruise Covid-19 and that all the passengers were the Port of Brisbane. The research showed industry was viewed as contributing to the requested to go into self-isolation. By how closely the Australian and New spread of the virus. 24 March, one passenger had died and 133 Zealand cruise markets were entwined and This followed on from the deaths of 14 had tested positive. By 13 May, 20 Austral- how popular cruise tourism had become Australians on 9 December 2019 in the vol- ians and two Americans had died. for Australians. They were the world’s keen- canic eruption at Whakaari/White Island. The ship was moored at Port Kembla est cruise tourists, making 54 voyages per The Australians were on a 12-day voyage until 23 April and of the 1100 crew, six were thousand population compared to Ameri- around New Zealand from Sydney aboard medically evacuated and 542 repatriated. cans on 36 and New Zealand on 20 (based the Ovation of the Seas and were on a day The ship sailed to Manila, arriving 7 May on 2017 UN world tourism data). trip to the island. The vessel, owned by where 214 Filipinos disembarked. Analysing 637 cruise itineraries for Royal Caribbean, had berthed earlier that In April, the NSW Government launched 2018/19 produced an Australasian market morning in Tauranga. As well as the a police criminal investigation and a Special of 1.027 million passenger voyages, which 14 Australians, five Americans and two New Commission of Inquiry. For New Zealand, represented a 4% share of a world ocean Zealanders died. In April 2020, legal action the Ruby Princess’s visit to Napier was cruise market of 25 million voyages. Of the commenced in Australia on behalf of the assessed to have caused a cluster of sixteen Australasian total, 29,400 passenger voy- relatives against Royal Caribbean. Covid-19 cases, but fortunately no deaths. ages (3%) were made on 37 New Zealand Three other cruise ships that also docked cruises that did not involve Australia (see The Ruby Princess debacle in Sydney have also had Covid-19 deaths diagram). On 8 March 2020, the Ruby Princess arrived reported: the Celebrity Solstice (one), the Sydney remains the fulcrum of the Oce- in Australia carrying the Covid-19 virus. The Ovation of the Seas (one) and the Voyager Photo taken 30 April 2019 30 April taken Photo A wider Pacific Islands ‘bubble’ would help local economies, especially those Composition of the Australasian cruise market (2018/19) dependent on tourism, to recover post Covid-19 MarchJune 2020 11

of the Seas (two). There were also four deaths on the Artania which docked at Fremantle. The total number of Covid-19 deaths related to cruise ships that docked in Australia was 30.

Global infections The first major outbreak of Covid-19 on a cruise ship also occurred on a Carnival Cor- poration ship. Out of 3711 passengers and crew on the Diamond Princess, 700 became infected on a Southeast Asia cruise out of Yokohama in January 2020. An 80-year-old man from Hong Kong had joined the cruise The NSW Government has launched a police criminal investigation and a Special Commission of Inquiry into the outbreak of Covid-19 aboard the Ruby Princess with a cough, disembarked and later tested positive for Covid-19. The ensuing outbreak became the largest outside China. pay if they were registered in the USA. The CEO of Carnival received US$11.1 mil- The close confines of the ship and Although obviously good at making prof- lion, 719 times the median salary, and Royal elderly age of the passengers were con- its, when the US Congress announced its Caribbean’s CEO US$14.2 million (639 times) sidered to have helped spread the virus. US$2 trillion relief package at the end of – see table below. Unlike the Ruby Princess, strict quarantine was enforced with over 3000 tests carried Cruise Line CEO Median Ratio Financial out. Passengers were confined to their cab- $NZ m Staff NZ$ Year ins for over two weeks which reduced the Carnival infection rate. Fourteen passengers died, Corporation 17.0 23,606 719 2019 with the plight of the passengers onboard and their repatriation featuring on news Royal Caribbean 19.0 29,676 639 2018 bulletins. Globally, 77 passengers/crew have died Norwegian Cruise of Covid-19 (as at 11 June 2020), with Lines 27.2 25,895 1052 2018 the 30 deaths involving Australian ports accounting for just under 40%. Deaths have March 2020, the cruise lines were excluded In providing ‘context’ to the pay ratio occurred on 21 different cruise ships (7% of because they were not organised under disclosure, Norwegian Cruise Lines pointed the global fleet of 314 oceangoing ships – United States law. Share prices tumbled out that crew, who number 90% of the Cruise Market Watch 2018). 85% combined to their heights in 2019: company workforce, receive free housing, Based on two months’ share of 30 million Carnival dropped from $54 to $8, Royal meals and medical care which is not typi- passenger cruise voyages in 2019 (allowing Caribbean from $135 to $19, and Norwegian cally provided to shore-side employees. for 0.5 crew per passenger), this calculates from $60 to $7. By early June, some of these Crew also only work for six to ten months a death rate per voyage of 0.001%. By losses had been regained to 60% of their of the year and live outside the USA where comparison, just over 418,000 have died of 2019 levels. the cost of living and prevailing wage rates Covid-19 globally of a world population of may be significantly lower. 7.8 billion (a death rate of 0.005%). Pay parity One component of crew pay is gratuities. Crew were stranded on 50 ships as ports New cruise passengers, particularly Austral- An industry hit hard were closed and countries shut their ians and New Zealanders unfamiliar with Covid-19 and the associated national lock- borders. The US Coast Guard estimated US culture (where service charges are extra downs have hit the cruise industry hard. 93,000 crew were on boats in US waters. to the bill) may be surprised. Two people I Operations were suspended from mid- The plight of crew became a media story, talked to about their cruise from Auckland March with ships laid up, crew gradually which in turn led to investigations about to San Francisco on the Maasdam were sur- repatriated, and tickets refunded. pay and conditions, and comparisons with prised to be asked to pay NZ$30 per night Together, Carnival Corporation (account- the company CEOs. each by credit card after boarding the ship. ing for 41% of revenue), Royal Caribbean Following the global financial crisis, the The gratuity is seemingly voluntary and can (20%) and Norwegian Cruise Lines (13%) Obama Administration required companies be increased, lowered or stopped by the account for three-quarters of cruise rev- to disclose their pay ratio – the remunera- passenger. When they understood what it enue, but have suffered major equity losses. tion of the CEO/president to the median was for, they were happy to pay because All three are headquartered in Miami, but employee. For 2018, the CEO of Norwe- they knew many of the crew (mostly Fili- none are registered in the USA: Carnival gian Cruise Lines, Frank Del Rio, received pino) were lowly paid. The gratuity charge is incorporated in Panama, Norwegian US$17.8 million (NZ$27.2 million), mainly in did mount up to around NZ$720 for the Cruise Lines in the Bahamas and Royal stock, which exceeded the median salary a 24-day cruise. It was an amount they hadn’t Caribbean in Liberia. They therefore thousand-fold. The median crew received budgeted for. pay very little corporate tax: based on $US17,000 (NZ$26,000) which included They enjoyed their cruise, particularly annual filings, Zachary Crockett (in the standard pay, overtime pay, gratuities, and the educational lectures on science and online news site The Hustle) has esti- shipboard pension. The crew wage was just nature, Pacific history and culture given by mated a figure of 0.8% corporate tax over half that of the median US worker in ten different experts. They also enjoyed compared to 21% that they would likely 2018 (US$33,000). Cont. on page 12 12 Logistics Logistics & Transport & Transport NZ NZ Photo taken 30 April 2019 30 April taken Photo Market stalls close to the jetty serviced by cruise ship tenders at Taiohae, Nuku Hiva, part of the Marquesas Islands in French Polynesia

Cont. from page 11 contribute to acid rain and increased heart and lung disease. the day tours on Tonga, Niue, Cook Islands With the aim of reducing air pollution, 2019 Neil Douglas, 14 March by Photo and French Polynesia. They bought their the International Maritime Organization Australians from the Ovation of the Seas queue first tours onboard, but noticed that prices (IMO) required ships to switch from 3.5% on Lambton Quay to ride the Cable Car, one of Wellington’s biggest tourist attractions – most buy were 50% higher than similar tours sold to 0.5% sulphur fuel from 1 January 2020. their onshore tours onboard and have little cash onshore. Cruise staff emphasised the ship However, the IMO permitted a ‘loophole’ to spend locally would wait for passengers who bought whereby exhaust gas cleaning ‘scrubber’ ‘official’ tours, but might not for tours systems could be installed that will allow have invested in open scrubbers, the move bought onshore. Apart from a few souve- the use of fuels with a higher sulphur con- by ports to now ban their use is considered nirs, snacks and drink, they spent little else tent, so long as emissions do not exceed “very troubling” by Carnival. whilst onshore. the 0.5% sulphur level equivalent. Average spends ranging from AU$10 per There are two sorts of exhaust scrubber: The future of cruise passenger on small Pacific islands to open and closed. Open-loop systems flush Cruise executives now have the time to AU$100 at Port Vila, Vanuatu, have been the scrubbed water into the sea – for every contemplate their future investment reported, with Australian cruise passen- ton of fuel, around 45 tons of scrubbed and business strategies whilst Covid-19 gers estimated to spend AU$25 million in water is pumped into the sea. Scrubbing ‘lockdowns’ continue across the world. 2018/19. is also slightly less fuel efficient. Closed- Certainly, some practices – starting Getting on and off via tender boats car- loop systems, which are more expensive, with CEOs’ pay – need an overhaul. rying around 70 passengers was awkward store the scrubbed water in onboard tanks For Australia and New Zealand, lock- and time-consuming. The Maasdam took for later disposal. Most cruise ships have downs have eased substantially as we move one-and-a-half hours with a ‘loyalty sys- adopted the open-loop system. into mid-June. A cross-Tasman bubble and tem’ prioritising passengers. Some 90% of The concern therefore is that air pollu- a wider Pacific Islands bubble now look passengers disembarked, but relatively few tion has been swapped for water pollution imminent which will help local economies, crew. In an earlier visit in November 2018, a which is particularly troubling for cruise particularly those of smaller Pacific nations 70-year-old American lady died after falling ships operating in environmentally sensitive dependent on tourism, to recover. between the Maasdam’s platform and the areas such as Fiordland and the Marlbor- Australia will continue to determine the tender off Rarotonga. ough Sounds. Some ports and jurisdictions future of the Oceania market. The have banned open-loop systems – Singa- $158 million cruise terminal at Luggage The switch to low-sulphur fuel pore, Hong Kong and China have banned Point in Brisbane remains scheduled to One change that has sailed largely under the practice to protect their marine envi- open in October 2020 with Carnival Aus- the radar due to Covid-19 has been a shift ronments, as have some Caribbean islands. tralia paying a fixed annual fee for preferen- to fuel with a lower sulphur content. For In February 2020, CentrePort recommended tial berthing rights. cost reasons, most ships use heavy fuel oil that ships switch to a low-sulphur fuel or Some cruise itineraries are likely to shift (HFO). Burning HFO emits nitrogen oxide use a closed-loop scrubber system within towards Brisbane as it will take some time and sulphur dioxide which are believed to the port of Wellington. For cruise ships that for the NSW Government to start planning for additional cruise terminal capacity for Sydney. It will also take time for Australians to rekindle their love affair for cruise tour- ism following the White Island tragedy and the Ruby Princess debacle.

Neil Douglas is a transport economist and fellow of CILT, with a PhD in economics from Leeds Photo taken 30 April 2019 30 April taken Photo A cruise liner berthed at Papeete, Tahiti University June 2020 13

NEW ZEALAND’S PORTS

Port Nelson – gateway to the top of the South Reported by Lynne Richardson

NELSON HAVEN has undergone remark- Given its reasonably isolated location, the its own right, with multiple sites around able change over the last 200 years. From port serves an extremely important function the country, providing a broad scope of its beginnings as a Maori trading hub based – to support the region’s prosperity. services, including international and cross- on the local snapper spawning grounds, to Major export commodities from the top trade freight. the full-scale international port that exists of the South Island include forestry prod- today, the Haven has always played an ucts (logs, sawn and processed lumber), Maritime and shipping essential role in the local community. seafood, pip fruit and wine. Port Nelson Port Nelson has direct shipping services to Arthur Wakefield founded the European is the largest seafood processing port in international ports, and ships goods coast- settlement of Nelson on 20 October 1841. Australasia, supporting and catering to ally to larger city centres for offload or He could see that the entrance to the the needs of some of New Zealand’s main transhipment. A key strategic driver for Port Haven left something to be desired, but seafood companies and associated fishing Nelson is to ensure the cargo flows that are deep water inside the natural breakwater fleets, including the engineering sector that moving across its wharves are maintained made up for what the entrance lacked. supports the industry. and increased where possible. To do this, The Haven looked very different in the Nelson/Tasman is also the second-largest it has leveraged its influence through the 1800s to what we know today. The Boulder apple-growing region in the country, with QuayConnect network to facilitate cargo Bank is a growing land feature, and in the approximately 28% of the total apple crop movements in and out of Port Nelson. past, the far-reaching arm was below the being produced here and exported around The port is very tidal, with variances of high tide mark. Work began in 1903, remov- the world. Approximately 70% of New up to 4 m on some days. Tasman Bay is ing and relocating small material from Zealand’s wine is produced in Marlborough, naturally quite shallow compared to other the Boulder Bank to form the Cut which making Port Nelson a vital link in the wine deepwater ports in New Zealand, which provided a safer and more direct approach industry’s supply chain. This has been an area does cause draught restrictions – the for ships calling into Port Nelson. of significant investment for the port as it controlling depth is 7.6 m in the main inside Harbour Board general manager WH Parr continues a strong strategic and commercial harbour channel at chart datum, and 8.1 m initiated a major reclamation scheme in partnership with the industry. in the outer channel. However, as modern the 1960s to satisfy the port’s commercial The main import commodities to Port shipping vessels become larger, they have needs. All in all, around 80 ha was won Nelson are fuel and cars, both second-hand tended to become beamier, therefore elimi- to transform Nelson from a struggling to and new. Honda’s national distribution plant nating the port’s concerns around draught bustling port. The reclamation is one of is located in Stoke, Nelson. somewhat. Nelson’s most strategic industrial areas and The natural cargo catchment for Port Access through the Cut can be tricky to a natural centre for the city’s marine ser- Nelson is the top of the South Island, navigate, especially for longer vessels, vices and industries, with benefits reaching stretching as far southeast as Seddon and which does mean there is a length restric- the wider Nelson community. across to the West Coast. Port Nelson’s sup- tion for ships of approximately ply chain solution business, QuayConnect 260–270 m. These types of vessels do tend Principal commodities and trades (www.quayconnect.co.nz) can provide all the to call at the larger New Zealand ports such Port Nelson is the region’s gateway to the cargo owners within this region with award- as Auckland, Tauranga and Lyttelton, where world. Tasman and Marlborough districts winning and sustainable logistics services a lot of cargo is aggregated and fed to/ produce a number of primary commodi- that link through to Port Nelson. QuayCon- from smaller regional ports such as Nelson. ties which are exported to global markets. nect is a nationwide logistics business in Cont. on page 14 14 Logistics & Transport NZ

Port Nelson CEO Hugh Morrison: “Innovative thinking in a world of constant change has given In the 1950s, apple cases were trucked from Mapua and Tasman, unloaded at Port Nelson, then shipped to Port Nelson recognition across the country and Wellington by overnight steamer to either be sold or reshipped overseas internationally”

Cont. from page 13 the newest addition to the fleet, the Huria 23,000 cu m of purpose-built warehousing The typical vessel size calling at Port Matenga II (70 tonnes). specifically for the wine industry. Approxi- Nelson ranges from 180 m to 270 m, which mately 35,000 pallets of wine and bot- is ideal for the amount of cargo throughput On the wharves tles can be stored here at any given time, the region has, with the majority of the Port Nelson operates three mobile Liebherr making it the largest on-port wine storage cargo connecting at transhipment hubs, harbour cranes, which provide optimum facility in New Zealand. either on the New Zealand coast or further flexibility to work container vessels effi- There is no rail connection to Port Nel- afield such as Southeast Asia. ciently and within the allocated berthing son, which puts it in a unique position Port Nelson has four working berths, two windows. The terminal and container depot compared to other New Zealand ports, of which – Main Wharf and Brunt Quay are controlled by the port’s logistics team, according to port CEO Hugh Morrison. “Rail (195 m) – are container berths. Fuel vessels operating a fleet of empty and full con- has been used by other ports around the also dock on Main Wharf, which is cur- tainer handlers, as well as a straddle vehicle country to draw cargo away from regional rently undergoing a rebuild on its northern which shuttles containers to and from catchments, with the strategic intent of aspect which will give a total workable the on-port warehousing precinct, Quay- inducing more and larger ships. The prac- length of 280 m. The break bulk berths of Pack. Here the team unloads and loads tice has led to severe competition between McGlashen Quay (340 m) and Kingsford approximately 30,000 containers a year. ports and has not always been done with Quay (195 m) host car carrier vessels, ferti- The warehouses themselves store various the most logical and cost-effective inten- lizer vessels and, of course, log vessels. commodities, including MDF and LVL wood tions,” he says. “Port Nelson relies on the Three tugs provide ships with safe pas- products, dry goods and building materials. road and coastal network serving it, which sage into the harbour and alongside its Officially opened in February 2017, the provides it with a reasonably resilient con- wharves with a large bollard pull – the WH Patterson Logistics Centre is the port’s new- nection to the rest of the country and the Parr (23.6 tonnes), the Toia (50 tonnes) and est infrastructure project, which provides world.”

The coastal highway Mr Morrison says Port Nelson is part of New Zealand’s coastal shipping network and would like to see the mode being supported. “New Zealand’s topography is unique. Having a singular rail system across two islands is not necessarily the most effective or resilient model. Rail is, and always will be, a very important piece of transport infrastructure. However, it must be thought of in conjunction with other modes, such as road transport and espe- cially coastal shipping,” he asserts. “More investment in coastal shipping will give better connectivity and options to cargo owners. As mentioned, Port Nelson does not rely on rail, but it is very much reliant on coastal shipping. As container vessels keep getting larger on the New Zea- land coast, there will come a time where these cannot call at regional ports such as Port Nelson. A frequent and dedicated Port Nelson does not rely on rail, but is very much reliant on coastal shipping coastal network, feeding one or two main June 2020 15

ports in New Zealand, will become the norm one day. “We believe the country should proac- tively start planning for this, instead of reacting to the inevitable which will no doubt come at a cost, likely to be worn by the regional cargo owners who supply a large portion of New Zealand’s primary sector exports. As a country, we are already at a disadvantage given our global location, thus it is imperative that the cost of getting goods to market is done as efficiently as possible.”

Log exports of 1.34 million tonnes contributed to an overall cargo volume of 3.9 million cargo tonnes Forward thinking and adaptable passing across the port’s wharves in the financial year 2019 – well up on the previous record of 3.6 million Mr Morrison says competition amongst cargo tonnes set in 2018 New Zealand’s deepwater ports is intense, with most ports trying to offer similar ser- the team at Port Nelson is its cargo vis- is a very real threat, highlighted by three vices and aggregate as much cargo as they ibility and booking platform, Pelorus (www. large earthquakes in recent years. “Resil- can, which has created a fragmented supply pelorus.wine). “Pelorus is going to allow our ience is vital to our continued existence, chain. “Our unique position has shielded us customers to have access to data and the but also hugely important to the top of the from these competitive activities some- ability to book transport across all modes South Island’s prosperity,” says Mr Mor- what, but the risk is very much constant through a single platform that will be an rison. Technology developments provide from neighbouring ports across Cook Strait end-to-end solution for them,” explains Mr an opportunity to improve productivity, and other South Island ports. Morrison. safety, competitiveness and profitability. “The logistics landscape has changed “Again, it’s a unique solution for a port “The challenge is to remain at the leading immensely in New Zealand over the last company to be investing in and imple- edge, not bleeding edge, for such invest- few years. Collaborative initiatives between menting, and will add significant value to ments,” he adds. ports, rail, trucking and logistics companies businesses and individuals relying on third The purpose for Port Nelson is to ‘facili- have all been established with the aim of parties or multiple providers to do the tate regional prosperity’. “This purpose capturing as much cargo as possible. The same thing.” drives our vision for the future and includes scale of this has resulted in a new com- port operations that benchmark at the top petitive risk profile for Port Nelson, which Future challenges quartile against comparable international includes all these businesses vying for the The main challenges faced by Port Nelson ports, a return on assets which delivers a same prize. Our strategies are aligned to currently and in the future are very similar market return to our community sharehold- ensure that investment in supply chain to those of many other ports around New ers, and a negligible impact on the environ- solutions and digitalisation continues, as Zealand and the world: increasing envi- ment, consistent with net zero carbon we position ourselves as a key stakeholder ronmental expectations, resilience, and emissions by 2050,” concludes Mr Morrison. in the supply chain network, domestically leveraging technology. “Our aim is to be respected by and and internationally.” Port Nelson has committed to achieve respecting of our tangata whenua and Mr Morrison says Port Nelson stands out net zero carbon emissions by 2050. A wider community, and that we support our because it is forward thinking and adapt- staged approach with interim targets has customers through the provision of leading able. “This is testament to the great people been established to achieve this goal. logistics advice and services. We’ll achieve that have worked, and currently work, at From a resilience perspective, New Zea- these objectives through an engaged and Port Nelson. There is a fantastic culture land is prone to natural disasters, and this highly capable team that put safety first.” of hard work, integrity and customer centricity. Innovative thinking in a world Port Nelson senior management of constant change has given Port Nel- Hugh Morrison – CEO son recognition across the country and Matt McDonald – general manager operations internationally. Initiatives such as QuayCon- Daryl Wehner – chief financial officer nect will maintain our reputation and hold Shelley Spencer – general manager people and safety us in good stead with our customers and Jaron McLeod – operations manager QuayConnect industry peers.” Allanagh Rivers – general manager infrastructure One such innovation being developed by Send us your feedback CILT NZ wishes to encourage debate about the articles included in this magazine. Do you have an opinion or would like to submit feedback? A selection of commentary (along with the sender’s name) will be included in the next edition, subject to space. Email Murray King  [email protected] or Lynne Richardson  [email protected] before Friday 21 August 2020. 16 Logistics & Transport NZ

TRANSPORT POLICY

GPS 2021 The GPS puts the Government policy stamp on the spending by the National Land Transport Fund, most of By Murray King which will be on roads, their safety, improvement and maintenance

NO, THIS is not an article on the navigation NLTP Funding to 2031/2032 system, but the Government Policy State- ment on Land Transport. This document is $m 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 issued every three years, and takes a 10-year Target 4,500 4,550 4,650 4,700 4,800 4,850 4,900 5,000 5,050 5,100 view of what direction the Government would like transport to take. Maximum 4,700 4,750 4,850 4,900 5,000 5,050 5,100 5,200 5,250 5,300 It sets the guidelines for Waka Kotahi NZ Minimum 4,300 4,350 4,450 4,500 4,600 4,650 4,700 4,800 4,850 4,900 Transport Agency to develop the National From the draft GPS, pp 31, 38; and Ministry of Transport Land Transport Programme (NLTP). This pro- gramme contains the projects and activi- This GPS covers the period from 1 July urban road and rail initiatives, worth ties that the National Land Transport Fund 2021 to 30 June 2031. It is centred on the $6.8 billion, spread over the years until (NLTF) will be spent on over the next three proposed funding, which is organised into 2029/30, and other Crown funding. years. That fund gets the revenue from pet- categories of expenditure called ‘activity rol tax, registrations, and road user charges. classes’. New this year The GPS tells the Transport Agency what In the above table, the first six years are The NTLF has traditionally funded rail pro- activities the money should be spent on, covered by this GPS; the first three years jects and operations for urban transport and the range of expenditure for each. are firm estimates (subject to change with in Auckland and Wellington, in an ‘urban The draft GPS has been out since mid- the final GPS) and the next three indica- transport’ activity class. In the last GPS March (available on the Ministry of tive. There will be a new GPS in three years’ a new activity class ‘transitional rail’ was Transport’s website) and submissions on it time. From 2027/2028 on, the amounts are included to cover some rail projects more have now closed. The final GPS could be forecasts. directly, as a transition towards more fully expected after the middle of the year. This The total funding over the first three embedding rail projects. Nevertheless, article is obviously based on the draft. The years is $13.7 billion, although there is these were all basically urban projects, such final could well reflect changes brought a range of expected outcomes. Over as improving capacity, both infrastructure about by the Covid-19 virus. If there is less 10 years it is $48.1 billion, an average of and services, that link housing and employ- revenue forecast for the fund, because of $4.8 billion a year. In addition to these ment growth areas, and also inter-regional reduced transport activity, then the spend figures is the NZ Upgrade Programme, trains. will also be lower. now getting underway, of mostly This year there is provision for funding the rail network more generally, both freight and passenger. The type of project that was funded under transitional rail is now all in urban transport. The new activity class is called ‘rail network’, and has been allocated a range between $100 million and $120 million a year. The recent Government Budget has added $148 million to that in the second year, and $236 million as well outside the NTLF in the first year. These sums are part of the overall change in rail funding toward the NLTF, a process enabled by changes to the Land Transport Management Act 2003, now before Parliament. A key feature of these changes is the requirement that KiwiRail prepare a ‘rail The GPS lists 10 areas where the Government wants the Transport Agency to achieve results – this network investment programme’ which includes reflecting the new emphasis on mode neutrality will set out its expenditure plan for the MarchJune 2020 17

network. The activity class is intended to enable a ‘reliable and resilient’ rail network. Also new this year is a ‘coastal shipping’ activity class, with a small amount ($10–15 million a year) for the first three years, largely aimed at research. Rail and coastal shipping are included to ‘embody mode neutrality in the transport system’. What was a ‘theme’ of mode The National Land Transport Fund has traditionally funded rail projects and operations for urban neutrality in the last GPS is now integrated transport in Auckland and Wellington, but this year there is provision for funding the rail network more throughout the GPS. So too are the themes generally, both freight and passenger relating to technology and innovation, and integrating land use and transport planning. transit, and transitional rail classes in the Local roads are part funded (up to 50%) The Road to Zero safety programme is last GPS. by ratepayers, which has to be added to the given prominence in the GPS, with a new Public transport services (for operating GPS local road numbers. activity class combining two previous activ- trains and buses, and also for investments ity classes. It includes investment in safety in new services) are estimated to spend Walking and cycling infrastructure, road policing, automated $600 million (high) or $390 million (low) in This activity class is to improve the uptake enforcement, and road safety promotion, 2021/22, rising to $1,030 million and of walking and cycling. It gets more money worth between $820 million and $910 mil- $510 million by 2030/31 respectively. For ($145 million, high) in this GPS for 2021/22 lion at the beginning of the period, and ris- the high estimate, this is 72% growth over compared to the last, but the same for ing to $1050–1170 million in the tenth year. the 10 years. Public transport infrastructure 2027/28. Its share of the total expenditure rises from (maintaining existing infrastructure and 14–18% in 2021/22 to 19–24% in 2030/31. investing in new) adds $770 million (high) or Investment management In the previous GPS, safety was also a $500 million (low) in 2021/22. However, this This is a relatively small allocation to sup- priority. The others were access, environ- grows more slowly, with the high 10-year port planning, research and funding alloca- ment, and value for money. In this GPS, estimate only 13% higher, and the low tion management. It is $70–80 million in the access priority is split between ‘better estimate nearly 25% lower. This category the first year, rising to $85–100 million in travel options’ for passengers, and ‘improv- includes any new road and rail vehicles. the tenth, slightly more than in the previ- ing freight connections’. The environ- ous GPS. ment priority is now ‘climate change’ and Roads decarbonisation of transport. What was The interplay between road maintenance Ministerial expectations the fourth priority, ‘value for money’, is and improvements, and local roads and An important function of the GPS is to now considered as an investment principle state highways, has been a feature of the state the Government’s expectations for embedded in all investment decisions. GPS over the years. Some governments the Transport Agency. It lists 10 areas where have emphasised road improvements and the Government wants the Transport The traditional areas of expenditure capacity expansion over maintenance, and Agency to achieve results. These include The GPS and the NTLF have traditionally state highways over local roads. reflecting the new emphasis on mode neu- focused on roading expenditure and public In this GPS, improvements get $1,550 mil- trality. The Transport Agency is to be more transport. These activities still dominate lion (high) and $1,120 million (low) at the proactive in accelerating mode shift, and the GPS, taken as a whole. In 2021/22, they start, over 80% of which is for state high- to work with KiwiRail on implementing the amount to 78–80% of the total spend ways, but declining steeply to $600 million Rail Plan and the new planning and funding (including walking and cycling). In 2030/31 (high) and $360 million (low) in the tenth arrangements. It expects that the Transport they remain at about 75% share. As well, year, still dominated by state highways. The Agency will have a greater role in long-term councils and the Transport Agency can allocations are lower in 2021/22 than in integrated planning for the sector, between access other activity classes for road pur- the 2018/19 GPS, and also in 2027/28 (the regions and across modes. poses, such as the Road to Zero class. last year of the previous GPS). ‘Improve- ments’ add capacity or improve the level Conclusion Public transport of service. The GPS puts the Government policy Public transport is now two activity classes, State highway and local road mainte- stamp on the spending by the NLTF. This public transport services and infrastructure. nance figures are much closer together, year it reflects, for example, the commit- These replace the public transport, rapid with state highways just over 50% of the ment to public transport, and to fund- spend, both now and in 10 years. But this ing rail. But most of the spending is still CILT NZ Life Member category grows strongly, more so than the on roads, their safety, improvement, and Sandy Gibson passes away Road to Zero programme, but less than maintenance. public transport services. The tenth year CILT NZ was saddened to hear of the allocation is 32% higher than the first, for passing of life member Sandy Gibson both high and low estimates. on 12 June, aged 75 years. A service to Interestingly, the allocations are also celebrate Sandy’s life was held at the All higher for comparable years than in the Murray King is a consultant in Saints Chapel at Purewa in Auckland. A 2018/19 GPS. ‘Maintenance’ includes oper- Wellington, specialising profile of Sandy will feature in the next ating, maintenance, and renewal of existing in transport planning, edition of this magazine. infrastructure, and also funds emergency policy and operations responses. 18 Logistics & Transport NZ

EMPLOYMENT LAW

Independent contractor or an 123RF.com employee? © When engaging independent contractors, it is essential that businesses carry out a thorough analysis of By Kathryn McKinney the real nature of the relationship

AN EMPLOYMENT Court ruling in May set by the company, and agree to holiday an entrepreneur, providing their labour that a contract courier driver should restrictions and relevant standards of work. to others in pursuit of gains for their own properly be characterised as an employee entrepreneurial enterprise.” (meaning he was entitled to a range of The law The court then carried out an assessment minimum wage, leave, personal grievance The test to determine whether a worker is of “all relevant matters” within the relation- and other entitlements) has been described an employee or a contractor is well ship and noted the following. as having “huge implications across the established, and it requires a focus on the entire industry”. real nature of the working relationship. In Control and integration While the question of employee vs inde- practice, this test assesses the intention of The court was clear that a degree of con- pendent contractor status is fact specific (a the parties, the level of control that the trol which was necessary and/or beneficial fact confirmed by the court), there is little business has on the worker, the level of to both parties’ business interests would doubt that Leota v Parcel Express Ltd is an integration of the worker into the business, not indicate an employment relationship. important reference point for industries and looks at the economic reality of the However, in this instance, Parcel Express utilising the ‘owner-driver’ model. relationship. exercised all control over the time and However, despite the comprehensive boundaries of Mr Leota’s runs every day, What happened? nature of the test, workers are still fre- and his leave arrangements. Additionally, Mike Leota was a courier driver for Parcel quently misclassified as contractors, Mr Leota had to wear a Parcel Express uni- Express. He drove courier vans for Parcel when in reality they should be considered form and his van was branded with Parcel Express for almost a year when his contract employees. Express signage. The court concluded that for services was terminated. He applied to Mr Leota therefore did not have any real the Employment Court for a declaration Analysis autonomy over his work. that he was an employee of Parcel Express. When analysing the relationship, the court In opposition, Parcel Express argued that Mr made a well-worded distinction: “An Industry practice Leota was an independent contractor. employee is someone who works for the The court took industry practice into con- When Mr Leota was engaged, Parcel employer, within the employer’s busi- sideration, but cautioned that this factor Express told him that he would need to buy ness, to enable the employer’s interests should be approached with care. This is his own van, but that the van would need to be met. An independent contractor is Cont. on page 19 to have the company’s branding on it and meet its required specifications. He had to pay for the branding of the van and pay the company a bond of $2000. Mr Leota was told that he would “be his own boss” and was given a contractor agreement to read and sign. The court noted that Mr Leota was not told to seek advice on the agree- ment or any other documents. Mr Leota was required to wear the com- pany uniform, work when and where the company needed and in the company’s best interest, comply with the company’s procedures and policies, and with the Workers are still frequently misclassified as contractors, when in reality they should be CEO’s directions, have his run boundary considered employees June 2020 19

CILT NZ congratulates Morris McFall Photo by George Novak, courtesy of The Bay Plenty Times courtesy Novak, George by Photo Morris and Hilary McFall at the McFall Museum – every classic car, vintage tractor and stationary engine QSM has been restored by Morris to its former glory, right down to the paintwork

CILT BOP-WAIKATO Section member and was awarded a Nuffield Scholarship mittee during this time. He joined the Te Morris McFall was recognised in the in 1969. He founded the McFall group of Awamutu Rotary Club in 1978 where he was Queen’s Birthday Honours in June, receiving companies in the early 1970s, comprising a founding member of the Pirongia Forest the Queen’s Service Medal for his services road transport, fuel distribution and civil Park Lodge where he carried out all the site to the community and philanthropy. engineering, finally retiring in 2016 after development and access roading. In 2005 Morris is both a fellow and life member three decades as the board chair. Morris built a rehabilitation centre and of CILT and in 2014 was awarded CILT NZ’s Morris has contributed funds, time and gym for disabled people with emphasis on top award, the Sir Bob Owens Award for resources towards a range of charitable and spinal injuries and congenital diseases. Outstanding Contribution to the Logistics, philanthropic causes. He was a Waikato CILT NZ congratulates Morris for receiv- Supply Chain Sector and Community. regional councillor from 1992 to 2001 and ing the QSM – a very deserving recipient. Morris began his career in dairy farming chaired the regional land transport com-

Cont. from page 18 because “the mere fact that an industry because Mr Leota’s van was branded with a works in practice will have greater weight considers that its workers are engaged as Parcel Express logo and was occupied five than the documentation. independent contractors cannot, of itself, days a week, there was little to no oppor- A thorough initial assessment is the best be enough.” There still needs to be an tunity for Mr Leota to grow his business for course of action for avoiding litigation over assessment of all other factors in the rela- his own personal benefit. employment status determinations, which tionship. In this case, the court found that may result in expensive proceedings and Mr Leota had both not known the industry Other factors the business being liable to compensate for practice, nor that he was being engaged as English was Mr Leota’s second language and a range of minimum employment entitle- an independent contractor. he did not fully understand the terms of ments that should have been offered to the In any event, the court cast doubt on the agreement that he entered into with employee in the first instance. whether there was in reality a definitive, Parcel Express. The decision does not mean that all consistent industry practice to treat courier Based on all the above factors, the court owner-drivers are employees. As noted drivers as independent contractors (or at “[did] not have any difficulty concluding” above, the analysis is very fact specific, and least any consistency in approach to con- that Mr Leota was an employee, and not a a key consideration here was that English tract form and practice) and the relevance contractor, of Parcel Express. was Mr Leota’s second language and he did of any alleged industry practice. “The not have a grasp of the legal requirements point is that if Parliament had intended What does this mean for employers? relating to the ‘contractor’ label given to those working within a whole industry to When engaging independent contractors, it him. be categorised as independent contrac- is essential that businesses carry out a However, it is clear that those operating tors, it is likely it would have said so rather thorough analysis of the real nature of the an ‘owner-driver’ model, characterising than imposing a fact-specific, case-by-case relationship. It is not enough to only look their workers as contractors, should take test which the court must work through, at the label given to the relationship, writ- note of this decision and apply the tests applying s.6 [of the Employment Relations ten agreements, and industry practice as mentioned above to their situation. Act 2000]. In this regard it is notable that these are not determinative factors. If you have any questions or if we can Parliament has not chosen to make special The assessment must take into account assist with applying the learnings from this provision for courier drivers, unlike share- all factors of the relationship as the court case to your situation, please get in touch. milkers and real estate agents (s.6(4)), volun- did in the above case. It We have prepared a short video outlining teers (s.6(1)(c)), and certain persons engaged is clear that the way in the case and its ramifications, which can be in film production (s.6(1)(d)).” which the relationship viewed here: vimeo.com/425337907

Economic reality The court found that Mr Leota was not Partner Kathryn McKinney heads Anthony Harper’s national working for himself and that he had no employment team that provides expertise on all aspects of employment, health and safety and immigration law; she can be real freedom to grow his business. In mak- contacted at [email protected] ing this finding, the court considered that The National Council of the Chartered Institute of Logistics & Transport NZ CALL FOR NOMINATIONS FOR THE 2020 AWARDS CILT NZ presents a number of awards each year for academic and personal achievements, communications, and industry excellence. Anyone can be nominated – award winners do not necessarily have to be members of CILT (except where stated) and companies can nominate themselves, or other companies whose achievements they admire. Nominations open 1 July 2020 for the period 1 July 2019 to 30 June 2020, and close on 15 August 2020 for the award for research for the master’s thesis, and on 31 August 2020 for all other categories. Need some inspiration? Check out these winners from last year.

The 2020 CILT NZ Annual AGM and Awards will be held on the evening of Wednesday 14 October at the Royal New Zealand Yacht Squadron, Westhaven Marina, Auckland. AGM starts at 5.30pm Cocktail reception at 6pm Seated for dinner at 6.45pm Tickets available for individuals and for tables of 10 Book via the CILT website

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