Freight firms oppose Transport Bill

Press, 7 May 1983, Page 13

Freight firms oppose Transport Bill

Parliamentary reporter If the railways Corporation did not “come to the party” with lower rates for freight forwarders, they would “unbolt” their depots on railway land and take them elsewhere, the president of the Freight Forwarders’ Association, Mr J. Farrell, has told a Parliamentary select committee. The association opposed the Transport Amendment Bill, which opens up road transport licensing, and phases out the 150 km road haulage limit. Mr Farrell said that good reasons for removing the rail restriction had not been established. Mr M. J. Minogue (Nat., Hamilton West) asked if the association’s real reason for opposing the abolition of the

150 km limit, was to keep intact its investment in depots on railway land. “Is your real worry that the depots in which you have invested will be shot to pieces in the switch from rail to road?” Mr Farrell: Yes, that is fair comment. Mr Minogue: You want the status quo to continue and people to keep moving by rail? Mr Farrell: We have to look for salvation to the Railways Corporation to come to the party with contract rates that will keep us competitive with road. Mr D. F. Quigley (Nat., Rangiora): Do you expect a ,positive response from the corporation? Mr Farrell: We have not had it yet. But we know

what rates schedule we should be getting to make us competitive with road. We want our capital saved by Railways lowering its charges. If they do not, we will have to unbolt our buildings and move them off railway land. Mr Farrell said that the freight-forwarding industry was 17 years old and was “particularly well set up” with depots throughout New Zealand. Only one depot was not yet built. If freight forwarding was to “stay in business” it had to be competitive with road transport, and it looked to the Railways Corporation for the efficiencies, he said. “Would you come to the Government looking for a taxpayer subsidy to keep your operation going?” asked Mr Minogue. Mr Farrell said that the association would not dismiss that option, and would seek such subsidy through the Railways vote. Mr R. W. Prebble (Lab., Auckland Central) asked how much the corporation could lower its rates to the freight-forwarding industry and still exist “to make a buck.” Mr Farrell said that he did not know how much of its business Railways gained from freight forwarders. The committee was told that centres such as Hamilton could have several hundred trucks a day passing through them if the transport industry was delicensed and deregulated. The association said that it was gavely concerned about inadequacies in the Ministry of Transport discussion document on proposed changes to the transport industry. The discussion paper forecast 700 more vehicles on the road as a result of delicensing and deregulation. The association believes

that a minimum of 950 additional vehicles will eventuate because of the incorrect data base used in the Ministry of Transport paper. The association’s submissions said that no mention was made in the Ministry paper about the 19 depots, estimated’ to cost $lO million, that would be needed to “consolidate linehaul traffic to be carted by road vehicles.” The submission said that the paper “assumes that these massive rigs will be able to make deliveries on a door-to-door basis without recognising the fact that, they are totally unsuited, because of their size, to effecting deliveries in cities.” The association said that no doubt a similar forecasting technique had been used to predict the swing of 16 per cent to 18 per cent from rail to road after delicensing. “Given that there is a similar error factor, the whole basis of the Ministry discussion document must be suspect,” the submission said. “The economic analysis carried out for the association established that the transfer of 800 million net tonne-kilometres of freight movement from rail to road would involve the land transport industry in a massive capital investment programme which would not be warranted by the low level of savings achieved,” it said. “Operating costs would rise $3 million a year, while a 10 per cent discount rate would add $27.6 million to the nation’s costs.” The association calculated the additional road fleet needed to handle the freight transferred from rail to road would be 950 main haul tractor units. “The association considers that questions of road safety and quality of life, which will be affected by the additional heavy vehicles on the main haulage routes, have been overlooked,” the association said.