Speech to Transporting NZ Conference

Importance of the freight sector

I want to begin by stating the obvious: we understand how critical the freight sector is to New Zealand’s success.

Freight is what keeps our country moving. When your sector is working well, the rest of the economy works well. When it’s not, everything slows down.

The pride we feel when picking up a product in an overseas supermarket and seeing the silver fern on the front doesn’t happen by chance. It’s made possible by a freight sector that moves our products efficiently from farm gate to factory and from factory to port - and ultimately to shelves around the globe.

Whether it’s milk from Fonterra, meat from Silver Fern Farms, or kiwifruit from Zespri, these exports rely on a freight system that works. Without it, our economy stalls. With it, we thrive.

When we say we’re listening to the sector, we mean it.

We’ve launched a clear action plan relating to freight, focused on lifting productivity and making the system work better.

That plan is about getting the fundamentals right. Making sure our freight networks are clear and prioritised, that we’re investing in the right places, and that the system is more reliable and resilient when things go wrong.

Alongside that, we’ve reinstated the National Freight Demand study because good decisions rely on good data.

For too long, we’ve been trying to plan the system without a clear, up-to-date picture of what’s actually moving around the country, where it’s going, and how that’s changing over time.

Bringing that study back gives us the information we need to plan properly, prioritise investment, and make smarter, evidence-based decisions.

But reinstating the study wasn’t really about the benefits to us – it was about the benefits to you. You told us that you rely on the data, and we listened.

Freight Advisory Council

One of the most useful steps we’ve taken to continue to get workable and informed advice has been establishing the Freight Advisory Council.

I set that up last October because I wanted practical advice from people who actually operate in the system.

I particularly want to acknowledge the Council today, and Transporting New Zealand as a key member, because that input has been invaluable.

You’ve seen this most clearly during the fuel response.

The Council met regularly during the peak of the crisis, advising us and stress testing our positions against real-world impacts, and helping us avoid getting caught up in solutions that might look good on paper but don’t actually work on the ground.

I understand the Council is turning its attention back to medium-to-longer term issues such as quality system data and the workforce, as well as assessing the impact of potentially structurally higher fuel prices on the freight and supply chains.

I look forward to seeing the products of these discussions.

Red tape

I want to address something I hear consistently from this sector – the sheer amount of red tape you’re dealing with.

Not big, headline-grabbing issues, but the accumulation of small, technical rules, permits and restrictions that slow you down every day.

The reality is a lot of these issues never make it anywhere near a Minister’s desk.

Individually, they don’t look big enough. They don’t look urgent enough. They’re often highly technical. So they get parked, pushed aside.

More often than not, they end up in the too-hard basket.

But when you add all of these issues up, they drive down productivity, add costs to your businesses and ultimately, a drag on the economy as a whole.

Well, I am fed up with these meaningless rules holding you up. I am committed to taking them out of the too hard basket.

Our Land Transport Rules Reform Programme is an important first step on unclogging the system – creating a pipeline of reform that clears the backlog and keeps the system moving.

Heavy vehicle productivity rule changes

We have already made good progress, some of which I want to announce today.

I am making a set of heavy vehicle productivity changes. They’re practical, not flashy - but importantly, they’re permanent.

Some of these have been accelerated as part of the Government’s Fuel Response Plan. That includes allowing Class 1 drivers to operate slightly heavier zero-emission vehicles, enabling Class 2 drivers to operate heavier electric buses, and removing permit requirements that frankly no longer make sense given the modern fleet.

These changes sit within Phase One of our national fuel response plan and will help ease some of the immediate pressure from the current situation.

These accelerated changes were consulted on as part of a broader package of heavy vehicle productivity proposals.

Alongside the above changes, I am also pleased to announce that I have made final policy decisions on a number of other further permanent rule changes, including:

Removing H plates to reduce compliance costs and enforcement confusion
Removing inconsistencies in the rules to make them simpler and easier to comply with
Removing the Accelerated Licensing Process, and
Standardising speed limits for tractors and special-type vehicles to 40kmh.
Introducing three new load pilot vehicle signs to better inform motorists

These changes are expected to come into effect before the end of the year.

What that means in practice is less paperwork, more flexibility, and fewer unnecessary barriers getting in the way of doing your job.

It’s about making sure the rules keep up with the vehicles we now have on our roads — and cutting red tape where it’s causing real-world problems.

Now, we know this isn’t a complete solution. But it is a meaningful first step - and there is more coming as the work continues.

Fuel crisis

In the context of the fuel situation, we’ve also taken a very close look at a wider range of potential temporary regulatory changes.

We worked through a full set of options, including payload changes, overdimension travel, and a number of broader heavy vehicle proposals.

Most of these options didn’t make sense as a short-term response.

Not because we’re opposed to change, but because the analysis simply didn’t stack up. Some options would have delivered only marginal benefits or only applied to a small portion of the fleet.

Others would have taken too long to implement to make a meaningful difference in the short term.

And in some cases, the trade-offs were stark.

Take mass limits, for example. Officials modelled potential diesel savings of up to 16 million litres over six months in a best-case scenario. This is equivalent to about 1.5 days’ diesel use at current levels.

But achieving that would have come at a cost of around $150 million in additional infrastructure damage over the same period.

When it came down to it, the costs outweighed the benefits.

That’s why we made the call to keep this change in reserve and only do it if the situation worsens.

If we move into Phase Four of the Fuel Response Plan, we are ready to go with targeted payload changes. This is because at Phase Four the cost of diesel is likely to be materially higher, the need to conserve supply is more acute, and overall freight task and road damage would be correspondingly lower – meaning the benefit-cost balance is likely to look quite different.

Looking ahead to Phase Two, we’ve got a set of targeted, temporary changes ready to go if needed.

That includes lifting route restrictions on overdimension vehicles so they can use key Auckland motorways — cutting down travel distances and improving efficiency.

And we’ve done the groundwork with NZTA and Auckland Transport to make sure those changes stack up.

That gives us a pathway to act if we need to but in a way that is proportionate to the scale of the challenge.

Looking further ahead, there is more we can do to lift productivity, particularly through changes to the Vehicle Dimensions and Mass Rule.

But I want to be very clear about the Government’s position: we are not in the business of subsidising the freight sector. Any changes we make will need to ensure the effects on infrastructure are properly accounted for and managed through the system.

That position – that any changes need to reflect the user-pays principle – is workable in the longer term in a way it isn’t in the middle of a short-term fuel response. And that comes down to two key things.

First, infrastructure.

When changes to vehicle weights and dimensions are planned for, their effect on the network can be managed. NZTA and local road authorities can build those changes into their asset management planning, their maintenance programmes, and their long-term investment decisions.

That means roads, pavements and bridges can be designed, maintained and renewed to accommodate more productive vehicles rather than the Crown being left with an unplanned bill from accelerated wear.

Second, industry has time to adapt.

Short-term changes would focus on the existing fleet, putting more weight on their axles, which concentrates the impact on the network.

Over the longer term, operators can invest in things like different axle configurations that spread loads more effectively, and adopt newer vehicle technologies — including zero-emission vehicles — that improve productivity without the same level of infrastructure impact.

VDAM change, done properly, is about enabling a smarter, more efficient system over time.

And that’s exactly how we’re approaching the next phase of work.

We’re building it on real-world evidence and robust research, so that any changes we bring forward will lift productivity, deliver meaningful benefits for operators, and properly account for the impacts on the network, including how those costs are paid for.

And that work is already underway.

The fuel response work has given the longer-term VDAM programme a running start. To develop the regulatory relief options at pace, NZTA brought forward an initial assessment of state highway bridges, and commissioned Road Controlling Authorities to do the same on the local network.

That evidence - alongside the sector input and the policy analysis and modelling done at pace - now feeds directly into the next phases of heavy vehicle productivity reform.

Because if we’re going to do this, we want to do it properly and make sure it is grounded in engineering reality, not assumptions.

That’s what gives us confidence that the next phase of VDAM reform will be both ambitious and workable.

Potential for future reform

Finally, as Minister I also want the Government to turn its mind more to how our ports interconnect with freight and supply chains.

Ports are a critical component of the system and it is important to check that the settings are right. I hear a lot of commentary from freight stakeholders about ports.

I look forward to receiving the Transport and Infrastructure Select Committee report on its inquiry into ports and the maritime sector.

MCERT will help the Government develop its response to that report, and I am keen for it to think about how ports fit into the system, as I do see the potential for reform there.

Conclusion

Thank you again for the opportunity to speak with you about the Government’s transport programme.

You play a vital role in the land transport system, and I want us to keep working together to achieve our shared goals.

I hope you enjoy the rest of the conference and make the most of the connections you build while you’re here. ...