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Duynhoven: Address to the Ports Forum

4 June, 2008

Address to the Ports Forum - Rail and Maritime Transport Union

It is great to be here today to talk to with you, especially when there has been such positive activity around both rail and sea lately. Exciting times for us, with the rail buy-back and the government committing $36 million over four years to revitalise coastal shipping.

These developments will benefit all New Zealanders in helping to reduce greenhouse gases, to take pressure off our roads, and to better link our regions.

Because this is a ports forum and many of you will be interested in coastal shipping, I’ll concentrate on Sea Change - the domestic sea freight strategy that was launched by my colleague the Minister of Transport just a couple of weeks ago. It’s all part of the bigger transport picture. We need to build a sustainable, integrated transport system so New Zealand can continue to prosper.

In July, the Ministry will release the final update of the New Zealand Transport Strategy, or the NZTS. This document will provide a high-level plan for transport through to 2040.

· The current amount of freight carried throughout New Zealand, broken down by percentage share, has:

· road at 66.5%

· rail at 17.8%

· shipping at 15.3%

· air at 0.3%.

The targets in the NZTS that you’ll be interested in, are to increase coastal shipping’s share of inter-regional freight to 30 percent by 2040, and to increase rail’s share of freight to 25 percent by 2040.

These targets come under the broad goal of ensuring environmental sustainability, which includes halving per capita domestic transport greenhouse gas emissions by 2040. Sea and rail have a significant contribution to make in reducing these emissions.

We expect total domestic inter-regional freight to more than double by 2040. If sea freight increases its share from 15 to 30 percent by 2040, in tonne-kilometres this means a four-fold increase in domestic freight moved by ship. To help us get there, an interim target has been set: 20 percent of inter-regional freight to be moved by sea by 2020.

Sea Change

This is where Sea Change, the government’s domestic sea freight strategy, comes in.

We know that New Zealand has long been underutilising sea transport as part of its domestic network. Sea transport is now seen as an environmentally friendly, energy efficient and cost effective alternative for moving freight around the country.

There are also the trends in global shipping to consider – with larger ships visiting fewer ports – driving a growing need for domestic feeder services to carry goods to and from the major international ports.

The draft Sea Change strategy was released in November last year for public consultation. The final strategy was updated and amended in light of submissions and released on 20 May. Feedback from submissions will also be used in developing the plan that is an important part of the final strategy.

Sea Change addresses the interactive nature of freight management to achieve supply chain needs. Ports are a central ingredient of the supply chain. Sea Change is about integrating freight movement by ship with delivery to and from ports.

In the submissions there were many comments to do with ports, including ownership issues, infrastructural investment and service alignments. Because of the level of interest in this policy area, it will receive priority over the next three years. The policy work programme will also include environmental issues around port activity.

Most port policy issues have received little attention since the Port Companies Act was passed in 1988 - 20 years ago, so it’s high time it was revisited to ensure it meets today’s needs.

While we’re talking about ports, this month proposals for improvements to port and harbour safety legislation will be going to Cabinet as part of a wider package of amendments to the Maritime Transport Act 1994.

As you’ll know, Maritime New Zealand led the development of the New Zealand Port and Harbour Marine Safety Code in 2004. This was after a series of shipping incidents in New Zealand harbours in 2002 and 2003, and a direct response to problems from declining standards, legislative gaps and the lack of an overall scheme for managing harbour risks.

However, this arrangement is entirely voluntary. Harbour safety management still relies heavily on good will that can be eroded over time – with a risk that the problems of 2002/2003 could resurface. The proposals establish functions, duties and powers to “lock in” consistent safety management at harbours throughout the country. This is clearly in the interests of seafarers, the environment and the economy.

What else has Sea Change to offer? I’m pleased to report work in the action plan is already well underway.

A focal point for much of the work in the action plan is the Seafreight Development Unit, recently established in the Ministry of Transport. Acting as a liaison between government and the sea freight industry, the Unit will have a special role in ensuring necessary information is collected and made available.

As you well know, the workforce is key to growing the capacity of the domestic sea freight sector, and workforce initiatives are another of the steps identified to help reach the targets.

A revitalised domestic sea freight industry will need more skilled people. The New Zealand workforce engaged in domestic sea freight is ageing - one third are over 60 years old. Recruitment is difficult because of the unique conditions that relate to seafaring. Financial support for students does not address practical sea-based training. There is also strong international competition for qualified personnel. Some of these issues are relatively easy to address. Others will need more attention and consequently more time.

Experience in the roading sector shows it’s useful to coordinate developing workforce plans among relevant government agencies and with industry representatives. A comparable action plan for domestic sea freight is being developed by the Ministry of Transport and the industry (shipping companies, ports, shippers and unions) with other government agencies. The plan will focus on industry requirements, recruitment strategies, good employment practice and staff retention.

The submissions we received during the consultation supported this co-ordinated approach to workforce development and signalled we should consider the full range of workforce roles. There are initiatives in the strategy to improve training and qualifications of both shore and ship-based workers. No longer is it acceptable or possible to drag anyone off the street, and get them to be stevedores or crane drivers.

Skilled and experienced staff are needed to ensure that freight is transported safely to and from ships. Industry and employee organisations and government agencies are already working together with the Ministry on this important area.

As I said earlier, the government has committed $36 million to develop domestic sea freight. Land Transport’s allocation for this 2008/2009 year will be $6 million. From 1 July the new Transport Agency (which combines Land Transport New Zealand and Transit) will invite proposals for access to funds twice yearly from public and private parties in the sector. Under the soon to be released Government Policy Statement, a further $10 million allocation for the following three years is planned.

It’s also pleasing that Land Transport New Zealand has been working with the Ministry to reduce barriers to accessing the funding. With more efficient processes, the sector should soon find it easier to source the funding, where it has been frustrating or ‘too hard’ in the past.

Essentially, Sea Change, is about working together – government, industry and the unions - to revitalise the domestic sea freight industry, and to use sea transport to help manage New Zealand’s freight growth. What it doesn’t mean is the government unfairly supporting the sea freight industry as a competitor to road or rail freight.

Rail buy-back

This is probably a good time to move onto rail. Just before Sea Change, the government bought back our rail operational business. This enables the government to implement an integrated transport strategy and to invest in the business to further rail’s potential to contribute in a much more meaningful way to the New Zealand economy. At this early stage the details are being worked through, but I can say we need a viable rail network.

Since 1995, there has been a 64 percent increase in the distance that the heavy vehicle fleet travels each year. If this growth continues, roads will struggle to cope with the traffic. By comparison railway lines are comparatively under-utilised, as are our coastal waterways. It makes sense to make relatively modest (in cost terms) improvements to the rail network compared with the much higher cost of building or upgrading roads.

Conclusion

Sea and rail both have a key role in realising the New Zealand Transport Strategy’s vision of an affordable, integrated, safe, responsive and sustainable transport system. Working alongside you, we should get there.


ENDS

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