Valuing freight transport time and reliability

Hydrogen, electric, biofuel, clean diesel – our fuels for the future

The road to zero – preventing deaths and serious injuries on our roads

THE FUTURE OF FREIGHT – modal shifts and alternative fuels

Volume 18 Issue 1 September 2019

nz$15.00

Logistics & TransportTHE OFFICIAL PUBLICATION OF CILT NEW ZEALAND

Contents

18

15

10

Using rail to take pressure off roads 3

Hydrogen, electric, biofuel, clean diesel – our fuels for the future 6

Drones – lifting performance 8

Valuing freight transport time and reliability 10

The road to zero – preventing deaths and serious injuries on our roads 12

Locating collection and delivery points for last-mile travel of goods 14

Work a major contributor to the national road toll 15

Should we just leave it to the experts to value road safety? 16

Engagement brings win/win for communities and the Transport Agency 18

Tours and Forum prior to the CILT Awards Dinner 19

In the next edition

The editorial team welcomes expressions of interest for submitting an article for the December 2019 edition of this journal. Contributors should in the first instance contact the editorial convenor, Murray King (email murray.king@xtra.co.nz) to discuss their article.Deadline for the December 2019 edition: Friday 1st November 2019

LOGISTICS & TRANSPORT NZ IS THE OFFICIAL JOURNAL OF THE CHARTERED INSTITUTE OF LOGISTICS & TRANSPORT NZ

6

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ON THE COVERThe Wellington waterfront is a

microcosm of New Zealand’s multi-modal transport systems, with the port facilities vying for space with

the railyards and motorway.Photo by Murray King

SOUTH ISLAND FREIGHT

Using rail to take pressure off roads By Andrew Maughan

the nation’s freight – about 80 million tonnes per year – with the forecast increase mostly due to the agriculture and mineral industries, as well as population growth.

The Ministry of Transport has previously forecast considerable growth in freight traf-fic in the South Island. While some will be carried by rail and coastal shipping, a large part of this growth is likely to be carried by road, resulting in a range of environmental and safety issues.

In part, this growth in road traffic will be supported by the lack of pricing for exter-nality effects which by making road trans-port relatively cheap compared to other competing modes is likely to exacerbate the emerging issues.

Industry viewsWe spoke to key industry representatives about their current mode choice for freight movement (road vs rail vs coastal shipping). We found there were a number of issues to be addressed. Forecast increased freight movement on roads will lead to an increase in safety risks and an increase in harmful emissions released into the environment.

Regarding safety, a 2016 Ministry of Transport factsheet highlights that while trucks accounted for 6% of total distance travelled on roads, truck crashes accounted for around 20% of the total deaths on the road, and 87% of those who died in these crashes were not in the trucks. Put simply, while there might not statistically be a higher chance of having a crash if you are driving a truck, there is a significantly higher chance that if there is a crash between a truck and a car, people are more likely to be killed or receive serious injuries.

HOW DO we choose if we move freight by road, rail, or coastal shipping modes in New Zealand? Is the true cost of moving freight by each of these modes understood and factored into the decision on which mode is used, or are some costs not fully included in this decision? South Island transport infrastructure owners want to know the answers to these questions now because freight movements in the South Island are expected to increase by 40% within the next 30 years, and they need to plan how they cater for this.

Planning and investing in infrastructure is a long-term decision. Some infrastructure assets are designed to last for 150 years or longer. Building and repairing infrastructure is an expensive and long-term burden on the public sector organisations that own the assets. For example, up to 60% of rural local authorities’ budgets can be spent on roads.

Rates (and therefore ratepayers) from rural councils across New Zealand are typically required to contribute 40–50% of the money invested in local roads on their network to enable them to access fund-ing from the government, via the National Land Transport Fund (NLTF) and associated road user charges (RUC) that contribute to this fund.

The forecast increased demand has road infrastructure owners concerned about maintenance, safety and the environmental impacts on the existing transport network – and they want to know what can be done now to mitigate the impacts of the demands from rising freight movements.

A South Island-wide concernIn commissioning this study, regional trans-

port committee (RTC) chairs identified freight mode shift as a South Island-wide concern and opportunity, and necessary to support sustainable growth: “Road freight has more negative impacts than rail or coastal shipping, but costs are not cap-tured in current pricing. We pay through increased congestion, crashes, air quality, fossil fuel emissions and the higher num-bers of trucks on our roads causing more wear and tear.”

In this study, Stantec (in association with Richard Paling Consulting and Murray King & Francis Small Consultancy) identified rail as an economic way to take the pressure off freight movements on South Island roads by calculating the value of externali-ties and factoring these into an indication of costs vs benefits that could be realised. This showed through case studies that a $20–$30 million investment in rail projects might save up to $12–$18 million costs annually, when these wider costs were appropriately considered.

It also showed that investment in one region that led to a freight mode shift from road to rail had potential significant flow-on benefits to an adjacent region.

As part of the study, we spoke with transport companies, ports and their cus-tomers. The study developed a methodol-ogy for assessing costs and applied it to eight case studies. These case studies indi-cated that for an approximate investment of $20–$30 million, an equivalent of 8% of existing road freight could be shifted by rail in the future, raising rail freight volumes by about 40%.

ContextThe South Island generates about a third of

September 2019    3

A new study has identified rail as an economic way to take the pressure off freight movements on South Island roads by calculating the value of externalities and factoring these into an indication of costs vs benefits that could be realised; KiwiRail has already increased its log capacity from the West Coast by 50%

Cont. on page 4

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transport network outages. Increased impacts from climate change

and recent earthquakes are placing more of our communities at risk as a result of this reduced resilience.

An additional underlying concern from infrastructure owners was the dispro-portionate amount of damage on roads from trucks. While this damage is funded through RUC, evidence shows that some types of trucks and their load configura-tions damage some roads more than others.

This means that, particularly on lower-volume road networks across the country, the available funding through RUC, which is necessarily derived from national datasets that ultimately come back to a series of averages, may not be sufficient to enable local communities to maintain the infra-structure to convey the freight demand on particular roads.

New opportunitiesOn the positive side of the ledger, there are exciting new opportunities developing in urban distribution networks where new technology and better-quality real-time data will enable faster adoption of more efficient distribution, higher levels of cus-tomer service and more sustainable use of transport infrastructure in urban environ-ments.

We found numerous opportunities to address the concerns raised by the sector. The study was limited in time and budget, so we prioritised opportunities in discus-

More trucks on the road therefore increases the likelihood of proportionately more deaths and serious injuries than if there are more cars on the road.

Road transport contributes to a range of environmental impacts; it accounts for around 18% of New Zealand’s gross emis-sions, and trucks on roads are a dispropor-tionate contributor to this compared to cars based on the proportion of vehicle fleets that are trucks. Getting trucks off roads and shifting freight by rail will be a positive contributor to a reduction in greenhouse gas emissions.

Reliability and resilienceMode choice and supply chain reliability were also raised as issues associated with the capacity of port handling facilities, intermodal hubs and available rolling stock. We found a number of examples in particu-lar where industry representatives stated that rail would be the mode of choice if there was more rolling stock capacity. In this case, the supply of rolling stock was not meeting the demand for it and is an opportunity lost, even under existing pric-ing structures.

Resilience is another issue highlighted by infrastructure owners. The increased reli-ance on just-in-time delivery across the supply chain means there is inadequate stockpiling of essential goods in isolated communities (often key tourist destina-tions) leading to people and businesses becoming more vulnerable to the effects of

sion with representatives of infrastructure owners and funders. In particular, we focused on better utilisation of rail.

We found better use of rail reduced safety risks, reduced environmental impacts, and provided more reliable out-comes when moving some types of freight, including better utilisation of existing infra-structure capacity. We found longer-haul movement of commodities was an area of greater opportunity, given the focus of the study on mode shift opportunity.

Real changeThis was not to be a solely theoretical exercise. The study sponsors wanted where possible to catalyse beneficial change where there was a real opportunity to do so. We therefore developed case studies, which demonstrated the benefits of using rail compared with roads when looking at the full true cost of transport (including externalities) and addressing a number of the issues identified by industry.

In this context, KiwiRail is currently exploring the potential of road/rail hubs for logs across Southland and southern Otago to address growing demand and increasing constraints on the road network (including access to ports and deteriorating roads). KiwiRail has also increased its West Coast to Lyttelton log capacity by 50%.

ProofFrom a long list of potential case studies identified with industry, we explored a few to quantify and demonstrate how the ben-

Cont. from page 3

The Ministry of Transport has forecast considerable growth in freight traffic in the South Island, and while some will be carried by rail and coastal shipping, a large part of this growth is likely to be carried by road

4    Logistics & Transport NZ

research project considered.There are some very significant barriers

and constraints to be overcome, including rolling stock capacity and rail reliability.

New technology can help deal with the adverse impacts of freight growth within cities, but again intervention may be necessary.

ConclusionThis study concluded that there is a case for change, supported by robust evi-dence, towards a more optimised freight mode split in the South Island. The study also provided a method to help robustly quantify and support the achievement of this more ideal mode split of road freight movement onto rail.

efits could be realised. This then provided a ‘toolkit’ to enable decisions supporting investment in infrastructure that in turn will encourage freight shifted by rail rather than road.

A summary of the case studies and results are in the table above.

If the provision of rail services facilitated the development of new projects, rather than switching traffic from road to rail, the potential benefits are likely to be higher.

Summary of findingsWe found there is a clear opportunity to shift freight off roads, and the study team believe there are total opportunities of around 500 million tonne-km (mtk) across the South Island per annum.

In 2017 there was in the order of 28.3 billion tonne-km (btk) of freight move-ments across all modes in New Zealand. Approximately 8.1 btk of these movements occurred in the South Island (29% of the total), and around 6.2 btk was on roads. Therefore, if the opportunities identified in this study were realised, we believe freight demand on roads could be reduced in the South Island by nearly 8%. This would equate to a potential increased demand on rail by around 40% against current volumes.

These benefits would be realised through capital investment in public infra-structure of up to $10 million for the case studies and potentially in the order of $20–$30 million total when including the remainder of the South Island.

Updated freight forecasts produced as part of the study confirmed that there is considerable freight growth forecast in the South Island, reflecting economic and population growth and increasing produc-tion of a number of agricultural and mineral products. If this freight is moved by road even at current modal split levels, it will create pressures on transport infrastructure and on the broader community.

September 2019    5

Industry representatives have stated that rail would be the mode of choice if there was more rolling stock capacity

Case Study Product Annual volumes (tonnes)

Annual volumes (m tonne-kms)

Total annual externality benefits

($m pa)

Unmet road wear costs

($m pa)

Stillwater logs Logs 30,000 7.3 0.2 0.1

Milton/Milburn logging terminal

Logs 50,000 9.0 0.2 for movements to Bluff 0.1

Garnet Industrial materials 150,000 51.6 1.0 0.2

Water Consumer products 400,000 92.4 3.2 0.4

Greymouth terminal General freight 25,000 6.3 0.2 0.1

Waste Waste 60,000 4–20<0.1 for alternative storage points

0.5 for movement from Christchurch

0.00.1

Port Chalmers Inland Port

General freight 285,000 3.7–7.7 <0.2 0.0

Total 1,000,000 174–198 5.8–5.9 0.8

Andrew Maughan is a principal consultant with Stantec; he has over 30 years’ experience as a civil engineer and advisor, working primarily with central and local governments, helping them plan for and deliver infrastructure-related projects, mostly in the transport sector across New Zealand

There are externalities involved in the movement of freight that are currently unrecognised in freight pricing. Those for road are very much larger than those for rail. These have been quantified by this research.

Transfer to rail would bring externality benefits in terms of access, safety and environmental impact, but intervention is needed to internalise them or compensate for them (for example, by funding particu-lar interventions).

The study identified a number of oppor-tunities (demonstrated with case studies) that could increase freight haulage by rail, possibly by substantial amounts, and these opportunities could be readily extended

beyond the specific case studies that this

battery and saves the brakes. Another key point is that Waste Management’s trucks are on relatively short routes of 200–300 km a day and return to base at night where they can be recharged. “This technology is perfect for what we are doing.”

Mr Donaldson said driving an electric truck was a bit different and operator buy-in was essential. “They need to understand the system and what we are trying to do. Drivers love these vehicles though. They have near-instant torque so they acceler-ate like a car. They are silent and there are no gear changes, which is important for us because we have a lot of stop-start driving.”

Waste Management’s EVs offer a lower total cost of ownership through signifi-cantly reduced fuel costs, with 20% of the energy coming from regenerative braking, and reduced maintenance costs, including brake wear.

From part of the problem to the heart of the solutionMike Bennetts said Z Energy was embedded in the fossil fuel industry, but was com-mitted to moving from being a part of the climate change problem to the heart of the solution. He said New Zealand lagged behind other countries. “In Norway, one in two new cars sold is electric. Europe has had biofuels since the mid-1990s. China has 500,000 electric buses and the infrastruc-ture and supply chain to support that. And Singapore shows how to put the regulations in place to change the way consumers act.”

Mr Bennetts said the BusinessNZ Energy Council had modelled New Zealand’s energy demand out to 2060 and had come

THERE WILL not be one transport fuel for the future. Hydrogen, electric, biofuel and clean diesel energy will all play a part as the sector transitions to support the government’s goal of net zero carbon emis-sions by 2050.

That was the consensus of all the pre-senters at National Road Carriers’ (NRC) Future of Freight breakfast seminar in Auck-land in late July, held to inform transport company owners about future fuel options to reduce carbon emissions.

About 125 NRC members ranging from truck fleet owners to individual owner-operator drivers heard the pros and cons of the four different fuel sources laid out by Dr Linda Wright, CEO of Hydrogen NZ; Sam Donaldson, senior project engineer, electric vehicles, at Waste Management NZ; Mike Bennetts, CEO of Z Energy; and Pieter Theron, senior manager with Daimler Truck and Bus NZ.

Hydrogen“We won’t be transitioning from one fuel to another, we will transition to a range of solutions,” said Dr Linda Wright. “It will be horses for courses. Transport companies will weigh up where the boundaries are – when different fuels become affordable and provide operational advantages.”

According to Dr Wright, hydrogen pro-vides an opportunity for New Zealand to transition to a low-emission economy domestically and also to export green hydrogen produced from the country’s abundant but intermittent renewable electricity sources, including solar, wind and hydro.

“Trillions of dollars are being invested in

hydrogen – the world is looking for renew-able hydrogen,” she said. “New Zealand can punch above its weight in this sector – we are seen as innovative, dynamic and versatile, and we have bipartisan political agreement on the need to reduce carbon emissions, which reduces the risk for inves-tors. We need to grow our capability here and get onto the agenda of international investors.”

Dr Wright said hydrogen light trucks were just coming on to the market now, but heavy trucks were not yet commercially available. Buses are being produced, but are unavailable because there is such a massive demand for them.

Waste Management’s electric journeySam Donaldson said Waste Management started its electric vehicle (EV) journey four years ago, speaking to companies around the world before partnering with Dutch company Emoss for support and components.

Waste Management set up a workshop at Mt Wellington, Auckland, to convert diesel trucks to electric power. The company now has eight electric trucks on the road, with two currently being converted, and plans to have 15 electric trucks by the end of this year. “We are on an aggressive path to elec-trify our entire fleet,” Mr Donaldson said. “Waste Management has 850 trucks, one of New Zealand’s largest fleets, using 100,000 litres of diesel a day.”

He said the waste industry lent itself perfectly to electrification because vehicles stop 1300 times a day and every stop provides regeneration charge for the

Hydrogen, electric, biofuel, clean diesel – our fuels for the future

ALTERNATIVE FUELS

6    Logistics & Transport NZ

One of Daimler’s fully electric heavy-duty distribution trucks during practical testing on the road near Rastatt in Germany

Toyota expects to introduce 100 Sora buses, each powered by a hydrogen fuel cell, within the Tokyo metropolitan area ahead of the Olympic and Paralympic Games in 2020

Waste Management now has eight electric trucks on the road, with two currently being converted, and plans to have 15 electric trucks by the end of this year

association has looked to take a leading role in sustainability and the environment, and that the seminar was to give truck-ing companies a clear picture of what the future holds for fuel sources and the rate of change, to help them understand and start thinking about future decisions.

“The government has set a target of zero carbon emissions by 2050. With transport making up about 20% of New Zealand’s total greenhouse gas emissions, we need to be looking seriously at the options if we are to do our part in meeting this target.

“It can be a win-win. If we make this transition to a reduced carbon emission world in a smart way, we can do better economically as well as environmentally. We have people in our membership who are quietly moving to sustainability, not because they are trying to save the world, but because they see it as a competitive advantage. There are others, like Ports of Auckland, who are working in the hydrogen space, and Foodstuffs and Waste Manage-ment, who are running electric trucks because they know this is the future. It is doable.

“When it comes to reducing New Zea-land’s carbon footprint, although transport is one of the biggest emitters, it’s actually one of the easiest to deal with, so we are making it our mission to lead the way on this. We want to give transport operators the information, the inspiration and the confidence they need to make the deci-sions and changes that will be better for future generations – and better for their businesses.”

National Road Carriers is New Zealand’s progressive nationwide organisation representing road transport companies; it represents 1800 members, who collectively operate 16,000 trucks throughout New Zealand

up with two scenarios: cohesive (or ‘waka’) with an orderly transition to low-carbon emissions, and individualistic (or ‘kayak’) which is not coordinated and messy like battling whitewater.

Z Energy spent $40 million building a plant in south Auckland that turns tallow (waste animal fat) into biodiesel that can be added to diesel at a rate of 5% to reduce emissions. Air New Zealand, TIL, Fonterra and Downer have all committed to buy biodiesel from Z to make the plant viable.

Mr Bennetts said Z Energy’s biodiesel plant used 15% of New Zealand’s tallow supply and it would build more plants if there was market demand. “We need the village of New Zealand to work together to make this transition. It emphasises the need for systems thinking. If we all take a selfish view, nothing will change.”

Technological advancesPieter Theron said Euro 6 standard diesel

September 2019    7

trucks were significantly reducing carbon emissions, particulate and nitric oxide emis-sions through technological advances. “We are now designing very efficient drive trains to reduce fuel consumption by 7–10% and that correlates directly to reductions in carbon dioxide emissions. We can make further savings with telematics and driver training. We even save an additional 2% by redesigning wing mirrors – which again saves 2% of carbon emissions.

“The road to heavy EVs is long and diesel still has a job to do,” he said. “We have 154,000 trucks in New Zealand. We sell 2500 new trucks of all brands each year and overall those new trucks lead to a 7% reduction in fuel – that’s a lot of carbon dioxide emissions saved.”

What the future holds for the industryAt the event, National Road Carriers CEO David Aitken said that since last year, the

Generally, the same economic sectors will benefit from drone technology, includ-ing infrastructure/utilities, construction, manufacturing, agriculture and transport. Public security will also benefit.

In New Zealand, most of the current drone applications are in construction and real estate. The rest mirror the international experience, with infrastructure, construc-tion and manufacturing activity seeing a large share of drone use. Agricultural applications feature relatively high – again consistent with international experience.

There is little NZ-specific data on drones and their values, but by combining different datasets we estimate drone-related busi-ness turnover at $162–$194 million. Looking forward, the turnover will increase as new applications become available and markets are developed.

The drone sector is actively engaged in research and development (R&D), and the work covers many aspects. At one end, the R&D ranges from improving the products being delivered to clients, to doing research on drones themselves. At the opposite end of the spectrum is Zephyr Airworks. Zephyr is designing an ‘air taxi for everyday life’ and is conducting its work in Christchurch.

Factors driving growthThe drone eco-system in New Zealand is still in its early growth stages. Drones will touch large parts of the economy – 65% of workers are in sectors that could use drones in some way or form. The potential gains could be substantial. How-ever, change will come from many angles, not just drones. There are other technolo-gies and solutions that could provide simi-lar (or better) outcomes for businesses.

The growth in commercial drones will drive the shift in total numbers. Commer-cial drones are expected to account for

NEW TECHNOLOGIES continue to enter the marketplace, changing how we live and connect. The changes cover many parts of the economy, ranging from 3D printing, artificial intelligence and cryptocurrencies. Transport and logistics are also impacted by technological advances, including drones.

Drones have been around for a century or so and were first applied in a military context. It is only more recently that drones have entered the everyday and commercial landscapes.

Drones offer a cost-effective aerial plat-form enabling other technologies, unlock-ing new applications and disrupting traditional business models. Drones offer aerial mobility that allows the controller to remotely access areas that were previously difficult, or dangerous, to access in a cost-effective, timely and safe manner.

Advances in sensing, measuring and opti-cal technologies, combined with improve-ments in drone capabilities, have driven great interest in using drones in new ways. In effect, it is only when drones are con-nected with other technologies that their true economic value can be realised.

While the potential is clear to see, prac-tical limitations, like payload, battery life (range) and safety concerns are constraining widespread commercial uptake of drones.

Economic valueThere are several international studies estimating the economic value of drones. Globally, the total addressable value of drones is estimated at US$127 billion (a 2015 value). A European valuation sug-gests that drones will deliver €10 billion, by 2035 and over €15 billion (annually) by 2050. The estimates paint a positive pic-ture showing strong growth in the short and medium term.

around 3% of total users by 2025, grow-ing to 6% by 2035. Commercial demand will account for most of the growth in advanced drone users. This growth will be impacted by external factors, such as:• The cost competitiveness of drone-based

solutions relative to other technologies• Industry, community and social accept-

ance of drones• The regulatory environment and solu-

tions for low-altitude air traffic control• Availability of operators and their ability

to operate financially sustainable busi-ness models.Other factors that would lift growth

include the ongoing developments in emerging technologies like artificial intel-ligence (AI) and the Internet of Things (IoT). Combining drones with these technologies could unlock a new wave of innovations and opportunities.

Other considerationsThere are many technical and regulatory considerations that would impact on how drones are rolled out across the economy. Some argue that the principal barriers to development of the sector are regulatory in nature, but this oversimplifies the devel-opment challenges.

The UK government’s Department for Business, Energy and Industrial Strategy and the Government Office for Science cite three distinct barriers:• Technological challenges in relation to

navigational performance, verification, connectivity and security issues

• The existing regulatory environment for drones which is holding back drone application

• Concerns about the privacy and social implications of drones, their association with military use, concerns about danger-ous uses of drones, and public dissatis-

8    Logistics & Transport NZ

Drones – lifting performance

TECHNOLOGY

By Lawrence McIlrath

Drones offer a cost-effective aerial platform enabling other technologies, unlocking new applications and disrupting traditional business models

up to $3.4 billion. Using more aggressive growth assumptions, the benefits could be more than double ($7.9 billion).

Improving regional air connectivity – a potential future scenarioLooking forward, it is conceivable that drones will change how we move around. Once such change is in regional air connec-tivity. Currently, potential drone applica-tions are hamstrung by poor transport economics, technical limitations and practical considerations. If these issues can be addressed, then many different oppor-tunities will be unlocked. We considered the potential improvements in regional passenger connectivity.

Most of New Zealand’s air connections are on the hub routes: Christchurch, Wellington and Auckland. Small regional airports are facing challenges to retain and grow their connections. Neverthe-less, the value of the regional air network is estimated at $794 million – a valuable regional contribution. Air connections are invaluable to small communities like those on the South Island’s West Coast and other isolated locations.

If drones could provide a viable transport alternative so that more people use air travel, for business and leisure, then it would change the economic geography, protecting the current values and providing a way to increase the value.

Using the relationships between urban and rural populations, propensities to fly, economic benefits across regions and applying these to the potential lift in pas-senger numbers, we estimate the value in activity that drones could unlock would be between $53.5 million and $145.5 million. The range reflects the degree to which inter-regional trade is facilitated.

faction with drone technologies.A key challenge that will influence the

successful growth of drones relates to airspace integration. This is a central issue that many countries are grappling with. To achieve the full potential of drones, all parts of aviation, airport and airspace man-agement systems must operate seamlessly. This includes drones that are controlled, semi or fully autonomous. Currently, drones have a high degree of human inter-action, but this is expected to decrease over the long term.

Estimated benefitsMany industries are anticipating a lift in drone use with an associated shift in pro-ductivity. The potential benefits (estimated using a scenario approach) will be due to a mix of:• Increased efficiency – drones will collect

more/better data at lower cost and/or faster

• Improved accessibility – drones can access locations that are difficult/impossible to access by air or land-based vehicles in a more cost-effective manner

• New applications – technological advancement and new combinations with existing technologies

• Reduced risk – in industries such as utili-ties, construction and so on, drones will offer a useful (safe) alternative to current practice when inspecting assets. Using conservative settings, the benefits

of drones across the economy are esti-mated at between $463 million and $991 million (over 10 years). A recent study suggests that better use of the IoT could deliver benefits in the order of $2.2 billion. The analysis suggests that over a longer

timeframe (25 years), the benefits could be

September 2019    9

The net benefit of the trade component is estimated at between $40.3 million and $57.7 million. Over 10 years, the benefits of using drones to improve regional access is estimated at $236–$641 million.

These estimates do not account for any costs associated with delivering the drone services (e.g. navigation aids, traffic control and so forth). They also do not include the costs associated with servicing the additional passengers (e.g. airfares, adding new routes or adding capacity on existing routes).

ConclusionThe analysis highlighted the upside poten-tial of drones. The benefits are not guaranteed – views about the uptake and ability to use drones are diverse. Some industry role players have strong views of the potential benefits, but indicated that it would take a long time before the technol-ogies would be ready for the mainstream level.

The limited track record, unproven reli-ability and robustness of the solutions are undermining the rollout of drone-related technologies. Attributes like payload, flight endurance and stability are important and need to increase considerably. This sug-gests that finding ‘step changes’ to how the sectors operate would be difficult to achieve; instead, any gains are likely to be incremental.

However, the analysis suggests that drones could assist in lifting productiv-ity across large parts of the economy. Even under constrained assumptions, the benefits are substantial, and small changes in drone uptake will multiply through the economy, delivering even greater benefits.

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Lawrence McIlrath a director of M.E Consulting and was the project lead of research for the report ‘Drones: Benefits Study’ which was completed for the Ministry of Transport and the Ministry of Business, Innovation and Employment; he has over 15 years’ experience in the private and local government sectors and enjoys the challenges of working in applied and development economics; the report can be downloaded here: www.transport.govt.nz/assets/Import/Uploads/Air/Documents/03ee506069/04062019-Drone-Benefit-Study.pdf

Zephyr Airworks is designing an ‘air taxi for everyday life’ and has entered into an agreement with Air New Zealand to bring the first-ever electric autonomous air taxi service to the sky

Our market survey – segmenting the marketA market survey of shippers and transport-ers of heavy freight (by truck and rail) within NZ was a key component of the study. Our interviews collected informa-tion on the company, its freight task and its position in the supply chain. More detailed questioning then focused on the com-pany’s four largest commodity movements, defined in terms of our five commodity groups and three trip distance categories

(local, inter-regional, inter-island). For each of these movements, we asked for informa-tion on annual tonnage, commodity value, origin–destination areas, modes used, trip distance, typical trip time and transport price (cost).

As different commodity groups were expected to have different sensitivities to travel time and reliability changes, we segmented the total market into five com-modity groups, as shown in the table. We undertook telephone-based interviews with some 49 freight managers and 10 transport companies/freight forwarders, covering all five commodity groups and some 30% of the total NZ freight market.

The table shows the average values per tonne of the freight in each commodity group (based on our survey), with a wide

Valuing freight transport time and reliability

FREIGHT ECONOMICS

Shippers of commodities in groups 2–5 have much lower willingness-to-pay values for time and reliability

spread of values between commodity groups 1 & 2 and commodity groups 4 & 5.

The survey found that the willingness to pay for time and reliability improvements was broadly proportional to the values per tonne for each commodity group. It also found that rail’s market shares were highest for the lower-value commodities (par-ticularly for bulk exports), while road was dominant among the higher-commodity values.

What our survey foundWe found that transport prices increase with distance, with a fixed component plus a variable incremental rate per km that gradually decreases with distance. For a given distance, transport prices per tonne were lower than average for group 2 (e.g. milk), group 3 (e.g. logs) and group 4 (e.g. steel and coal).

For movements currently by road (the majority), we asked what factors were likely to prompt a change to using rail. For local movements, cost was the dominant factor; for inter-regional movements, cost, time, door-to-door reliability and frequency were all of similar importance; for inter-island movements, reliability and time were of most importance.

The survey’s main focus was to ascertain

THE NZ Transport Agency’s Economic Evaluation Manual (‘EEM’) is the national ‘bible’ used to assess all transport pro-jects funded (wholly or partly) through the National Land Transport Fund. EEM provides unit values for travel time and reliability improvements resulting from a transport scheme, so that (for example) any time savings estimates in minutes may be converted into dollars of benefits, which then contribute to the project’s benefit/cost ratio (BCR).

For person transport, EEM covers ben-efits to both the operator and to the traveller of faster and more reliable travel times. But for freight it currently focuses mainly on the benefits to the operator, such as the savings in driver and truck time, with minimal recognition of the benefits to freight users or shippers.

We recently completed a major study for the Transport Agency to try and fill this gap, by assessing values that the shipper of the freight would place on speedier deliv-ery and more reliable arrival times. The full study report is likely to be available shortly on the Transport Agency’s website.

International researchWe undertook an extensive examination of the international literature, potentially as a means of validating our NZ survey findings. However, while there is plenty of literature, it turned out to be of rather limited use.

It tends to focus on those commodity groups (particularly group 1 – see the table below) which are most sensitive to time and reliability changes, whereas our approach was to cover a representative sample of all commodity groups so that average values across the whole freight sector could be estimated.

Only very limited research has previ-ously been undertaken on the NZ freight market, through a PhD thesis by Hyun Chan Kim (University of Canterbury). While this gave some valuable insights, again it focused on the most time-sensitive com-modities.

10    Logistics & Transport NZ

By Murray King and Ian Wallis

Market segmentation – commodity groups

Commodity groups

Commodity value  

per tonne 

Road:rail market shares (%)  (tonne km)

Commodity shares of road transport task 

(tonne km) 

Commodity shares of rail transport task (tonne km)

1.  Retail and manufacturing, general

$3600 84:16 40% 35%

2.  Perishable exports $2800 87:13 13% 8%

3.  Other containerised exports

$700 84:16 33% 38%

4.  Bulk exports $300 16:84 1% 27%

5.  Other domestic $300 97:3 13% 2%

Total 81:19 100% 100%

Note: Data from the 2014 National Freight Demand Study, except value per tonne (from our survey). Groups 2 and 3 include the precursor commodities such as milk, livestock and logs

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September 2019    11

shippers’ maximum willingness to pay for specified improvements in journey attrib-utes, and (conversely) their willingness to accept price reductions in return for dete-riorations in these attributes (a ‘contingent valuation’ approach). The four attributes tested were: earlier (or later) delivery of freight; reductions in the extent and fre-quency of late delivery (reliability); higher (or lower) service frequency; and reduced (or increased) damage to freight in transit.

For the latter two attributes, it was found that shippers were generally satisfied with current journey performance. In terms of service frequency, while most shippers con-sidered this a significant factor in choice of carrier, they were already getting a service well matched to their needs. In terms of loss/damage to freight, no one was willing to pay more for reduced loss or damage: this reflects that currently loss or damage is generally minimal (and, if it were not, the shipper could readily change to another carrier).

Willingness-to-pay values – travel time improvementsFor our first two attributes (expected travel time and reliability of delivery times), a significant proportion of shippers were willing to pay more for improvements, with higher proportions for group 1 com-modities, and lower proportions for the other groups (which have therefore been considered together in our analyses). Note that smaller proportions would be willing to accept reduced transport prices for increased travel time and lower reliability; these results are not reported here.

The following table indicates (for group 1 and for groups 2–5 combined) respondents’ willingness to pay for travel time improve-ments, measured in $ per tonne per hour of improvement. These are calculated on two bases: first, for those respondents with significant (non-zero) willingness-to-pay values; and second, averaged over all respondents (most of whom had zero values).

For example, for group 1 commodities, the average willingness to pay for those with significant values was $10.98 per tonne per hour saving; while averaged (weighted by tonnages) over all group 1 movements, this figure reduced to $1.13 per tonne per hour. The corresponding figures for groups 2–5 are very much lower, both in terms of the willingness to pay of those with significant values, and also in terms of the proportion of the market which has signifi-cant values.

Overall, per tonne carried, the group 1 values per hour ($1.13) are over four times the values for the other groups ($0.26). For

project evaluation purposes, where freight benefits are important, this illustrates the desirability of having information on the freight commodities carried on the corridor in question, rather than just using a generic ‘all freight’ value.

Willingness-to-pay values – reliability improvementsOur analyses for valuations of reliability improvements (essentially reductions in the proportion of late deliveries and the extent of lateness) adopted a similar approach to that for travel time savings above.

Almost analogous to travel time savings, the willingness-to-pay measure used for reliability improvements (per tonne) was expressed per hour change in the standard deviation (SD) of travel times. This meas-ure may be interpreted as the change in expected average lateness by one hour. The resulting values are given in the table below.

For those respondents who were willing to pay significant amounts for improving reliability, the values for all groups average about $28 per tonne per hour change in expected average lateness. Including allow-ance for the zero values of other respond-ents, the overall average reduces to about $9 per tonne for group 1, some 16 times higher than the average $0.60 per tonne for the other groups.

While these reliability values are higher than the average travel time values in the section above, it cannot simply be con-cluded that transport improvements will generally result in higher reliability benefits

for freight than in expected travel time benefits. The balance between travel time benefits and reliability benefits will depend very much on the nature of the improve-ment scheme and whether the problem it was designed to address was primarily

one of slow travel times or of particularly unreliable travel times.

It remains to be seen how this balance works out for a range of ‘real’ improvement schemes under evaluation, while noting that good estimates of existing reliability problems and potential reliability benefits of improvements will be needed if the evaluation results are to be meaningful.

EEM values per truckloadFor truck travel, EEM expresses time and reliability values per truckload (rather than per tonne). Based on survey data on aver-age loads per truck, we estimated that an average-loaded truck would value travel

time savings at $8.12/hr on average ($21.87 for group 1). Similarly, reliability savings would be valued at $45.46/hr change in average delay ($173.25 for group 1).

ConclusionsThis study has shown that shippers do place significant values on travel time and reliability improvements in the transport of goods. We note that these travel time benefits are essentially additional to, rather than replacements for, the current EEM time benefit values, which relate primar-ily to truck operator costs. The reliability benefits comprise a new benefit category for truck (and other transport) movements, which is not currently included in EEM.

Murray King and Ian Wallis are consultants in Wellington, specialising in transport, planning, policy, operations and economics

Values for willingness to pay – reliability

Willingness to pay – reliability

Respondents with trade-off($/t/SD hour)

All survey respondents($/t/SD hour)

Group 1 $28.24 $8.95

Groups 2–5 $27.96 $0.57

All groups average $28.33 $2.52

Values for willingness to pay – time

Willingness to pay – time Respondents with trade-off ($/t/hour)

All survey respondents ($/t/hr)

Group 1 $10.98 $1.13

Groups 2–5 $3.45 $0.26

All groups average $5.45 $0.45

12    Logistics & Transport NZ

OVER A thousand individuals and organisa-tions have provided input into the devel-opment of a new road safety strategy that aims to prevent 750 deaths and 5600 serious injuries on our roads over the next 10 years.

The Ministry of Transport is now reading and analysing the submissions into the Road to Zero consultation, and the govern-ment aims to have the final strategy and first action plan released by the end of the year. The new strategy will replace Safer Journeys when it expires.

Improving the safety on our roads is criti-cal for our country. Kiwis and our visitors use our roads every day. Our highways, streets, footpaths and cycleways connect us to each other and to the places we love.

People should be able to travel safely on our roads, yet on average, more than one person is killed every day and seven others are seriously injured in road crashes across the country. New Zealand now ranks in the bottom quarter of the OECD for road safety, and the impacts on the victims, whanau, friends, communities and work-places are immeasurable.

Road safety goes beyond our obligation to prevent deaths and injuries to improving lives and lifestyles too. It ensures peo-ple feel safe using our transport system, whether driving, using the footpaths, riding their bikes or letting their children walk, bike or scooter to school.

This strategy provides an opportunity to influence how we move around and how we feel as we travel; to support people’s health and wellbeing, and improve the places and spaces we love. It is an oppor-tunity to provide a consistent, strategic

overall outcomes.The modelling tells us that investment in

proven infrastructure upgrades, such as median barriers and rumble strips, and in effective enforcement will be a key part of achieving this target. This will need to be supported by a programme of safety changes, including setting safe and appro-priate speeds, improving the safety of vehi-cles, and tackling risk taking on our roads.

The Road to Zero proposes seven princi-ples to guide how we design the network and how we make road safety decisions. They are: • We plan for people’s mistakes• We design for human vulnerability• We strengthen all parts of the road

transport system• We have a shared responsibility for

improving road safety• Our actions are grounded in evidence

and evaluated• Our road safety actions support health,

wellbeing and liveable places• We make safety a critical decision-

making priority.

Focus areasTraditionally, we have focused most of our efforts to achieve safe roads on trying to improve driving skills and addressing risk-taking behaviours. While this is important, it will not solve the road safety problem by itself. No one expects to crash, but people make mistakes – including those of us who are usually careful and responsible drivers.

The journey towards our vision requires us to improve the quality of our roads, to encourage people to drive safer vehicles, to incentivise people to follow traffic laws,

ROAD SAFETY

The road to zero – preventing deaths and serious injuries on our roads

approach to road travel so that everyone, whether they live in our most lively cities or our most remote and beautiful places, has the same right to arrive safely on their journey.

Elements of the proposed strategyThe Road to Zero proposes a new approach to road safety, and has sought public and other stakeholder input. This section out-lines the proposals in the document, which are subject to change following analysis of the submissions and other inputs. The gov-ernment will make a final decision on the strategic approach by the end of the year.

The Road to Zero consultation document proposes a vision of a New Zealand where no one is killed or seriously injured in road crashes. This is a new approach to road safety, founded on the Vision Zero approach that says deaths and serious injuries on our roads are unacceptable and preventable.

We know it will take time to strengthen our road system and adjust behaviours and expectations to make the changes needed. This consultation document proposes a tar-get of a 40% reduction in deaths and seri-ous injuries over 10 years. Steady progress towards this target would mean about 750 fewer people would be killed and 5600 fewer would be seriously injured over 10 years compared to current levels of harm.

We believe this is a challenging but achievable target, based on modelling of a substantial programme of road safety improvements over the next 10 years. This target will ensure that we continue to prioritise effective road safety interven-tions and allow us to be held to account on

People should be able to travel safely on our roads, yet on average, more than one person is killed every day and seven others are seriously injured in road crashes across the country

By Brent Johnston

ing between jobs or salespeople visiting clients. All of them have the right to come home from work healthy and safe.

We know that not all businesses treat road safety as a critical health and safety risk, and that businesses in all sectors need better information about how to meet their obligations. This is especially impor-tant when it comes to rules about speed, fatigue and for how long people can travel before they should take a break.

4. Road user choicesAlthough most road users intend to follow the rules of the road, many will occasion-ally push the limits or make poor choices. It could be going too fast, misjudging the gap in traffic at a busy intersection, driving too close when passing someone riding a bicycle, or travelling too fast past a school bus picking up or dropping off children. Or it could be diverting attention – even for a second or two – to a phone or a passenger.

There is no doubt that if everyone fol-lowed the rules, stayed alert and sober, drove at safe travel speeds for the road and wore a seatbelt, fewer people would be killed or seriously injured on our roads. That’s why it is important that the new road safety strategy promotes good, law-abiding and considerate road use.

5. System managementRoad safety belongs to everyone. This strategy’s success will require visionary leadership, strong partnerships, sound

governance, and

and to create a transport culture that val-ues and protects human life. We also need to ensure that the way we manage the road safety system enables all these changes to happen.

We have examined how and why crashes happen, and what road safety measures are most effective. This work has helped identify five areas for us to focus work on over the next decade.

1. Infrastructure improvements and speed management

We want to make the road network safer by investing in infrastructure changes that are long-lasting and proven to save lives. Evidence tells us that median barriers virtually eliminate the risk of head-on crashes. Rumble strips and side barriers help prevent run-off crashes. Roundabouts can help reduce the number of casualties at intersections.

Safer travel speeds on our highest-risk roads will save lives. They also reduce stress for other road users, including passengers, and help people feel safe to walk, bike, or travel with children. Safer speeds can also reduce harmful emissions.

2. Vehicle safetyWe know that safer vehicles not only help drivers avoid crashes, but also protect occupants and other road users when crashes do happen. We want to raise the safety standard of vehicles entering New Zealand, and to lift demand for safer vehicles. We will also support the uptake of proven safety technologies into our existing fleet.

3. Work-related road safetyEvery day, thousands of people travel on our roads while at work. Some of these people are professional drivers transporting goods. Others may be tradespeople mov-

communities working together. We need to build good relationships across the network so that we can share informa-tion and work together effectively. This is especially important in the area of post-crash response. Different agencies need to collaborate to ensure that emergency responders can get to crash scenes quickly and provide the best-quality care.

We also need to make sure that decision-makers can access sound data and evidence about what works if they are to take action with confidence.

Action planThe Road to Zero consultation document proposes a list of 14 immediate actions to support the focus areas, and has sought input from submitters for other priorities. We will work through this input, alongside assessment of international evidence about what works, to create a plan of priority actions for the next few years.

What happens nextThe new strategy and first action plan are due out before the end of 2019. This is when the real work begins. The government cannot do this alone. We’re going to need everyone who uses, designs and maintains the roads, footpaths and cycleways to work together to build a road system that pro-tects us from our own mistakes and those of others.

September 2019    13

The Road to Zero has identified five areas to focus work on over the next decade, including infrastructure improvements and speed management

Brent Johnston is manager of the mobility and safety team at the Ministry of Transport, where he has worked since October 2008; in his role, Brent is responsible for advice on land transport safety, public and active transport, and accessibility, and he will lead the development of the new road safety strategy

Locating collection and delivery points for last-mile travel of goods

LAST-MILE LOGISTICS

14    Logistics & Transport NZ

Non-traditional collection and delivery points (CDPs) have proved to be efficient in facilitating the last-mile delivery of goods

demand can be covered by using the existing post shops as CDPs, and thus non-traditional CDPs need to be established in order to be able to provide an accessible CDP service to a larger portion of the inhabitants of Christchurch.

Non-traditional CDPs were found to be able to cover up to 79% of the population while requiring people to travel less than a kilo-metre to visit a CDP. It is also worth noting that with an increase in the distance required to be travelled by consumers to visit a CDP, the number of CDPs required (to cover the same or a higher proportion of population) decreases.

The author acknowledges the support of his research supervisors Emeritus Professor Alan Nicholson and Dr Diana Kusumastuti at the University of Canterbury

INCREASED RETAIL online sales throughout the world are likely to have changed the activity and travel patterns of people. Though their shopping travel might have decreased compared with the days when there was no online shopping option available, the movement of goods is likely to have increased, particularly in urban areas. This has created business opportunities for freight service providers, such as courier companies. However, it has also brought challenges that goods transporters must overcome in order to be sustainable in an increasingly competitive market.

For example, there are several hurdles in conducting last-mile deliveries successfully, such as a high rate of failure of deliveries during the first attempts. This may increase the costs for courier companies delivering items bought/sold online. Also, it may bring adverse traffic impacts, such as increased movements of light com-mercial freight vehicles in residential areas.

Introducing CDPsCollection and delivery points (CDPs) are among the possible sub-stitutes for standard home deliveries that are most commonly done during 9am to 5pm on weekdays. In the European market, CDPs have proved to be efficient in facilitating the last-mile delivery of goods by means of reducing the rate of failure of home deliveries. However, CDPs have only recently been introduced in New Zealand, with a few CDPs being installed on a trial basis in big-ger cities, such as Christchurch.

Locations used for setting up CDPs, population density around CDPs and their operating hours are factors that have a large effect on their usage. CDPs, if located inadequately or at locations that are not easily accessible for consumers, may not attract the desired consumer patronage. However, some or all of the locations that are beneficial now may not remain so after a few years due to possible changes in the land use and population distribution pattern in the city.

Thus, selection of locations for establishing facilities is a step that largely governs their performance. Therefore, this study was aimed at identifying optimal locations for establishing CDPs, using Christchurch as a case study.

Traditional or non-traditional?Post shops were considered as traditional locations for establishing CDPs. Other facilities, such as supermarkets, petrol stations, dair-ies and pharmacies, were considered as non-traditional locations for establishing CDPs. It was found that only a small amount of

By Ashu Kedia

Proposed non-traditional CDPs in Christchurch could include supermarkets, petrol stations, pharmacies and dairies in addition to the more traditional post shops

Ashu Kedia is a PhD student at the University of Canterbury; he travelled to Dubrovnik to present a paper on this topic with the help of a personal development grant from the Transport Research and Educational Trust

Work a major contributor to the national road toll

WORK-RELATED ROAD FATALITIES

THE BURDEN and pattern of work-related motor vehicle traffic crashes (MVTC) is poorly understood in New Zealand, the identification of which has been limited by official data sources that have historically lacked identifying data on work-relatedness and/or purpose of journey for both the fatality and other involved vehicles.

Historic priorities and strategies for road safety in New Zealand were established without a good understanding of work-related MVTC deaths, in part because there has been a substantial knowledge gap in this area.

The Health Research Council-funded Work-Related Fatal Injury Study conducted by the Injury Prevention Research Unit at the University of Otago has addressed this knowledge gap using data-rich coronial records to examine work-related MVTC. Coronial case files offer us the opportunity to determine work-relatedness, to examine the contribution of work-related MVTC to the national road toll, and to further iden-tify opportunities to reduce this burden by leveraging health and safety management and policy.

A rigorous and time-consuming process of data collection was undertaken to exam-ine deaths due to work-related MVTC for the period 1999–2014. Following a robust case-selection process, over 6000 coronial records were obtained and reviewed by our team for work-relatedness. Work-related MVTC cases involved a motor vehicle on a public road and were classified as workers, commuters or bystanders.

One-in-three fatalitiesWe found that one-in-three road traffic fatalities involved a working vehicle – be that a professional driver or a worker driving for another work purpose, such as driving between work sites or to see clients or to attend a work meeting. Concerningly, for a similar proportion of fatalities we were unable to determine the purpose of journey for those involved in the incident,

Maintenance issues, especially crashes due to failing brakes, appeared to reduce in frequency over time, probably due to improved commercial vehicle standards and testing, but still occurred often enough to be of concern.

Bystander incidentsThe road transport sector was involved in just over half of all worker and bystander deaths. The majority of bystander incidents involving the road transport sector were beyond the control of the professional driver. This highlights the high frequency of post-crash psychological harm that drivers within this sector have to contend with fol-lowing involvement in a fatal crash.

It is important that post-crash work-related harm for workers involved in MVTC needs to be addressed by health and safety management systems.

Other industry groupsWhile the road freight industry contributes to over half the work-related MVTC deaths, it isn’t the only industry group to contrib-ute. Other industry groups with notable contributions to the burden of work-related MVTC deaths include the agricul-ture, forestry and fishing sectors, as well as the construction sector.

All sectors with workers driving in com-pany or personal vehicles, if even for small distances for short work tasks, should pay attention to road safety as a critical safety issue for their employees.

Interventions neededOur study indicates there are a consider-able number of MVTC fatalities in New Zealand that are work-related in nature, indicating that there is an opportunity to substantially reduce the road toll through occupational road safety measures.

To have a meaningful impact on fatalities, our research indicates that safety systems-level interventions need to target both

The identification of work-related motor vehicle traffic crashes (MVTC) is the subject of a new study funded by the Health Research Council

leading us to believe our estimates will be under-counting the true burden of work-related MVTC, especially for those commuting to or from work.

What we do know is deeply worrying. The contribution of work-related driving to fatal MVTC is substantial. For the period 1999–2014, an average of 22 workers were killed while driving on public roads each year and a further 66 deaths each year were to members of the public who were killed as bystanders in crashes involving a working vehicle.

These combined worker and bystander deaths indicate work-related driving con-tributed to 23% of the national road toll for the period. Commuters, commuting to or from work often in a vehicle provided by the employer, contributed an additional 23 deaths annually, increasing the contribu-tion of work-related driving to 29% of the national road toll.

Contributing factorsDrivers at work are a heterogeneous group, but the road transport sector and heavy trucks do dominate the work-related MVTC figures.

Groups of workers with a higher preva-lence of work-related MVTC include those aged 45–54 years and males. These patterns reflect the dominant patterns of work-related fatal injury in general, regardless of work setting. Professional drivers are at higher risk of work-related MVTC than other occupational groups.

Factors contributing to the fatal crash do vary. Seatbelt use is uncommon in fatalities, especially those incidents where the fatal-ity, generally a professional truck driver, was driving a heavy truck. Risky driver behaviours and actions, such as high vehicle speed carried into corners, was common.

Driver impairment, due to either fatigue, pre-existing health conditions, alcohol or drug use, was as frequent, as was poorly designed and maintained road infrastruc-ture and adverse weather conditions.

September 2019    15

By Dr Rebbecca Lilley

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the work system. In adopting a systems-thinking approach

to reducing work-related MVTC, there is a clear role for the integration of gov-ernment, regulatory bodies, road safety authorities, industry bodies, supply chains, companies and drivers in addressing the causes of crashes.

The Ministry of Transport’s Road to Zero 2020–2030 Road Safety Strategy adds to the safe-system approach by articulat-ing the well-overdue need to consider the vehicle as a workplace for those who drive while working. The Road to Zero strategy will treat road safety as a critical health and safety at work issue. This is also strengthened by WorkSafe’s Health and Safety at Work Strategy 2018–2028 with a developing focus on working in and around vehicles, regardless of the location of that work.

Improving work-related road safetyLittle changes have the potential to reap large occupational and public safety benefits. While the Road to Zero strategy outlines supporting best practice around

work-related driving, strengthening commer-cial transport regula-

Should we just leave it to the experts to value road safety?

OPINION

16    Logistics & Transport NZ

As safety is a particular outcome of the policy objectives of the NZTA, namely ‘a safe transport system’, can it really be ‘traded off’ against other objectives? The zero toll target suggests it can’t

tion and improving vehicle safety, much can be done to achieve effective change at the level of the supply chain and within individual businesses.

Avenues for change include: • Policy frameworks – employment and

procurement policies that prioritise safe work-related driving

• Development of a mature safety culture and championing of fleet safety

• Improved professional driver develop-ment, including defensive driver training

• A stronger focus on the improvement of the health and safety conditions of pro-fessional drivers.A lack of data is a significant barrier to

effective activity. Better data is needed to provide an evidence basis for improv-ing our understanding of where to target our efforts in work-related road safety. The recently implemented collection of ‘purpose of journey’ data following police-attended traffic crashes will help to identify work-related cases.

Further in-depth analyses from the Work-Related Fatal Injury Study will provide much-needed insights into opportunities to address the burden of work-related MVTC and will contribute to reducing New Zealand’s unnecessarily high road toll.

heavy and light working vehicles, speed, impaired driving (including fatigue and impaired health conditions) and seatbelt use, as well as road infrastructure, to reduce the contribution of environmental and road conditions to worker fatalities.

Rethinking the approach to road transport safetyWhat is missing from our data are the deeper systems-level analyses to under-stand the role that work systems contribute to work-related MVTC. While the NZ Police and coroners often focus post-crash inves-tigations on driver characteristics, driver behaviours, vehicle and road conditions, they rarely examine the full range of factors that contribute to crashes. This limits our opportunity to learn from fatal crashes and improve safety for workers and the driving public.

So, while our study highlights areas of concern for those sectors transporting goods on the national road network, a rethink in the approach to road transport safety is urgently required to reduce both fatal and non-fatal injuries.

Work-systems failures often underlie the vast majority of the circumstances that lead to work-related MVTC, but they are rarely considered post-crash in any great depth. Prevention efforts in the road trans-port space are also often driver focused and fail to consider the underlying pres-sures and safety compromises generated by

By Neil Douglas

Dr Rebbecca Lilley is a senior research fellow at the Injury Prevention Research Centre, Dunedin School of Medicine, at the University of Otago; she is currently leading the Work-Related Fatal Injury Study funded by the Health Research Council

IF I told you there were 5.4 fatalities on New Zealand roads per 100 billion vehicle kilometres driven, would you feel safe driv-ing, cycling or crossing the road?

This was the reference statistic that respondents were asked to bear in mind in a 2016 pilot survey of 83 people undertaken for the NZ Transport Agency (NZTA) in 2016. If your answer was ‘no, you wouldn’t feel safe’ then think again. The actual statistic for 2017 was 7.2 fatalities per bil-lion vehicle kilometres. That’s around one hundred times worse than the reference

statistic given in the survey. The NZTA survey would have meant that

instead of 377 deaths on NZ roads in 2017, there would have been only four. Although tragic for the people and families involved, it would have been a remarkable collec-tive achievement that would have been applauded by Associate Minister for Trans-port Julie Anne Genter who is pressing for a zero road toll.

Does it matter as it’s only a statistic? Yes it does, because it’s the fundamental con-cept behind the approach to estimating the

value of statistical life (VOSL).

VOSL explainedVOSL is used by the NZTA and the Ministry of Transport (MoT) to value the economic cost of road fatalities and the benefits of road safety improvements. It is also a figure used by other government departments (including the Ministry of Health) since transport seems to be the only department that estimates VOSL.

It’s worth pointing out here that the

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327 road fatalities in 2016 amounted to 1% of the 31,179 people who died from all causes in 2016. There were nearly twice as many suicides (606 in 2016/17) as road fatalities.

The NZTA study came up with a cost of $8.29 million per road fatality. The figure, which admittedly had a wide statisti-cal error, being a pilot survey, was nearly double the $4.37 million figure in the MoT’s ‘Social Cost of Road Crashes’ 2019 update. The MoT’s figure derives from a 1998 Guria-Miller survey that used a set of willingness to pay (WTP) questions. The resultant averaged value has since been updated via wage rate indices.

The $8.29 million NZTA figure covers the respondents’ WTP whereas the MoT figure includes pain, grief and suffering to others, plus emergency/medical costs, legal costs, and vehicle damage and property costs. Neither figure includes the traffic delay imposed on other road users from road crashes.

By comparison, Germany uses a figure of NZ$2 million based on a human capital approach that values lost income growth (including the shadow economy, house-work and voluntary work) plus humanitar-ian costs (medical, emergency, legal and traffic delays).

Across the TasmanAustralia calculated the cost of a road fatality at NZ$1.9 million in 2005. This was until a survey of 213 people in NSW was undertaken by the Institute of Transport and Logistics Studies (ITLS) at the Univer-sity of Sydney Business School for the then NSW Roads and Traffic Authority in 2007.

The survey presented a set of pairwise routes choices that varied the number of fatalities per year (e.g. 0 versus 4 in the report showcard) alongside other trip attributes, such as travel time and cost, in a scientifically controlled way.

The estimated cost of a fatality/trip worked out at AU$0.91 for an urban journey and AU$3.99 for a rural journey. These costs were then factored by accident rates, trip volumes and trip distances to compute a VOSL of AU$6.7 million. The resultant estimate therefore increased three-fold on the AU$1.83 million that the then Bureau of Transport and Economics had calculated using the ‘human capital’ approach. It is the closest figure to the NZ$8.29 million NZ pilot survey result.

NZ questionnaire errorThe NSW survey is important because it informed the initial design of the 2016 NZTA questionnaire. Unsurprisingly, the

into the questions. Some probably discount the risks altogether, viewing themselves as ‘safe’ drivers. Others probably responded on behalf of society (accidents being unac-ceptable), taking account of government pronouncements (e.g. today’s target for zero death toll). Others may have consid-ered the inconvenience of traffic accident delays and voted to avoid the road with the highest accidents for simple journey expediency.

The move to WTP-based VOSL by NZ and Australia may reflect benevolent governments valuing their citizens, but if inflated values are deliberately being sought to prioritise safety over journey cost (raised petrol pump prices) and travel time (reduced posted speeds), then this is misleading.

A ‘human capital’ approachFinally, it’s pertinent to ask whether mon-etary valuation is secondary to ‘ethical’ questions. As safety is a particular outcome of the policy objectives of the NZTA, namely ‘a safe transport system’, can it really be ‘traded off’ against other objec-tives? The zero toll target suggests it can’t.

Like comparable countries, New Zea-land’s road fatality rate at 7.2/billion vehicle km is now a quarter of what it was in 1990, but it still remains 38% higher than Australia and double that of Sweden and the UK.

Yes, New Zealand does need to improve the safety of its roads and drivers, but not necessarily by slowing roads down or by raising the price of petrol in order to fund improvements.

The VOSL used in transport cost-benefit appraisal needs to move away from values derived from surveys involving unfathom-able accident rates in unrealistic choice situations and back towards a ‘human capital’ approach, or some other basis with economic rationale. Cost-effectiveness analysis, which does not need a VOSL, should also be used more often.

Safety initiatives could be ranked accord-ing to the expected number of lives saved per dollar of investment (including any travel time cost from reduced speed).

And isn’t it time that Ministry of Health economists took up the challenge and worked out a VOSL with wider applicability?

questionnaire design is very similar, but had one important difference. The NZ ques-tionnaire referenced the fatality rate per number of vehicle kilometres driven. This was done to avoid the factoring process of response results needed in the NSW study.

However, the questionnaire mistakenly referenced 100 billion vehicle kilometres instead of a billion vehicle kilometres in the rate. Neither the questionnaire designers nor the interviewers, two peer reviewers or the NZTA spotted the error.

A reasonable conclusion that can be drawn is that if none of these experts could spot the error in the fatality rate, how can the car drivers who completed the ques-tionnaire be expected to answer the safety choices in any meaningful way? If respond-ents had taken into account the ‘per 100 billion vehicle kilometre figure’, they would been assessing their VOSL for an environ-ment 100 times safer than it actually was.

Deriving the resultant VOSL depends on what ‘factoring’ was applied by the analysts to the choice responses. Was a billion or 100 billion vehicle kilometres used? Depending on what figure was used means two widely different VOSL figures of $82,900 and $829 million are possible.

It is very difficult to see how respond-ents can, in practice, evaluate their chances of death or injury in choosing between two hypothetical routes A and B. In theory, they could calculate the vehicle kilometres they travel on the route section – e.g. six deaths divided by a billion (as shown) versus four deaths divided by a 100 billion. Both chances are infinitesimally small so should realistically have no influence.

Dealing with small risksThe behavioural economist Kahneman in ‘Thinking Fast and Slow’ made the observa-tion that there is ‘a basic limitation in the ability of our mind to deal with small risks: we either ignore them altogether or give them far too much weight – nothing in between’. This surely invalidates the estima-tion of VOSL based on vehicle kilometres driven.

Likewise, Kunreuther found that for insurance premiums, WTP did not vary amongst risks of 1 in 100,000, 1 in 1 million and 1 in 10 million.

Confounding all this is what people read

September 2019    17

Neil Douglas has a PhD in economics from Leeds University and has worked as an independent economist since 1992, during which time he has undertaken over 200 studies in twelve countries; he has also developed a nut farm in the Wairarapa and is chairperson of the Wairarapa Tree Crops Association

Cont. from page 16

EMBEDDING CUSTOMER engagement into its major projects is paying off for the NZ Transport Agency, giving communities more of what they want and clearing the way for greater agreement when proposals go before boards of inquiry.

The commitment to early community and stakeholder engagement – called the NZTA Way – is even winning international recognition. Last year, the Northern Corri-dor Improvements (NCI) project was voted the IAP2 International Project of the Year. IAP2 is an international association whose members seek to promote and improve the practice of public participation in projects throughout the world, through its Core Values Awards.

The Transport Agency’s success was for the 2016/17 planning and consenting stage of the project to build a new motorway connection between State Highways 1 and 18 on Auckland’s North Shore. The project will complete the Western Ring Route, as well as increasing transport choices by extending the Northern Busway and creat-ing over 7 km of new walking and cycling paths.

The judges said that “public participation practice at the ‘empower’ end of the spectrum is rare and has lifted the bar on tried-and-true practice and handed decision-making back to the communities …”

NCI also won the Australasian Project of the Year across all categories and the indi-vidual Australasia Winner (Planning) award, with the awards being shared with the engi-neering consultant team from Aurecon NZ.

Early engagement While the NCI project has put the NZ Transport Agency on the world map, the agency says this is a reflection of a wider engagement strategy that is producing win-win results for it and the communities

Watercare services and more than 10 ha of public land, meaning coordination is crucial. Its success was and is reliant on community support.

Some of the key approaches have included:• Having an engagement voice at the

decision-making table• Engagement best-practice values and

processes were embedded in everyone’s role

• Partnering with Auckland Council and Auckland Transport for all engagement activities so people could hear about a variety of work happening in their area; this avoided ‘silos’

• Co-design with mana whenua through face-to-face forums and monthly hui; this included agreeing options for ecological and environmental meas-ures, including stormwater treatment, maintenance and health of streams and waterways, planning regeneration and urban design.The project’s engagement and communi-

cations manager, Aimee Brock, has champi-oned the voice of customers throughout.

Among the results is a revolutionary traf-fic management approach whereby only four major traffic switches will take place on SH1 over the four-year construction period. Journeys on the motorway will look the same for up to a year at a time. When traffic does have to move, it will only ever be moved as a whole lane, reducing cus-tomer confusion, frustration and accidents.

Ms Azam says that one of the measures of success was the unanimous support for the project at the board of inquiry from mana whenua, and support from key stakeholders, including local government, road-user groups, public transport, cycling and environmental groups.

it works with.The NZTA Way involves engagement

happening as early as possible and being woven throughout a project’s planning and design. This ensures that partner, stake-holder, customer and community feedback influence significant decisions that shape future phases.

Sarah Azam, the agency’s practice man-ager, communication and engagement, Auckland and Northland, says this uncovers the local issues, social impacts, risks and opportunities that need to be considered as part of the decision-making. “The way we engage is important because it helps to shape the project, programmes and initia-tives for end-users as well as mitigate and minimise the impact of our work on people and communities,” she notes.

“Effective engagement prioritises trans-parency on what is up for negotiation and what is not, so people can have clear expectations about their involvement and understand what they can influence. It uses clear, simple language to build understand-ing. Engagement aims to build ongoing rela-tionships with people, taking them along a journey and gaining trust.”

Community winsThe NCI project is a good example of a community making gains as a result of early engagement.

NCI is a major accelerated project brought forward by the government and has the potential to transform transport choices on one of New Zealand’s busiest corridors and one of the country’s fastest-growing industrial areas. More than 120,000 cars a day use SH1 and 50% of morning commuters in this corridor use the Northern Busway.

There are eight diverse suburbs, including many related projects and assets involving

By Dave MacIntyre

18    Logistics & Transport NZ

Engagement brings win/win for communities and the Transport AgencyThe Northern Corridor Improvements (NCI) project has been recognised for lifting the bar on the tried-and-true practice of public participation and has handed decision-making back to the communities

STAKEHOLDER ENGAGEMENT

Cont. on page 19

providing a walking and cycling connection between the East Coast Bays and Albany. It includes a new watermain installed directly underneath the bridge, to help cater for the growing needs of the area over the next 40 years.

The project team developed the bridge and watermain to minimise any disruption to the local community. The artistic design and name (meaning ‘panoramic view’) were developed together with mana whenua, architect Jeff Wells and designers Aurecon, and the bridge was built early in the project so that it could be used straight away as an exceptional community asset.

“There is not one way to plan, organise and undertake engagement, but the bene-fits of genuine engagement are substantial,

ranging from cost and time savings through to

“The changes and inputs as a result of public engagement have been really broad-ranging, from the incorporation of 5 km of walking and cycling options (and detailed plans for those including 12 access points), extending the Northern Busway all the way to Albany, a new busway sta-tion at Rosedale, design of on and off-ramps including keeping the Greville Road on-ramp open, and decisions on access including local road improvements such as Caribbean Drive and the Greville Road Intersection which was originally planned to be a roundabout.”

Ongoing contactThe Transport Agency is committed to engaging closely with iwi, key stakeholders, affected property owners and the com-munity throughout the four-year project lifecycle. A recent example of the partner-ship approach paying off is the Tirohanga Whanui Bridge which was built as a joint initiative with Watercare.

The striking red bridge opened in Febru-ary to reconnect the community by

delivering the best design outcomes for our customers,” says Ms Azam. “It also leads to increased goodwill and a social licence to operate through challenging construction activities.”

And what of the people who cannot ever be satisfied when a new project gets under-way? “We recognise that not everyone will agree with the final outcomes and we can’t give everyone everything they want,” says Ms Azam. “We do, however, have a respon-sibility to create opportunities for genuine input to aspects which require decision-making, and share how and why decisions are made. We also share with people how their feedback influenced the outcomes, each time we ask for their input.”

This article was first published in the Aug/Sept’19 edition of NZ Construction News.

September 2019    19

The striking light effects on the Tirohanga Whanui Bridge

THE CHARTERED Institute of Logistics and Transport annual Awards Dinner this year will be held at the Intercontinental Hotel in Wellington on 18 October. It marks the 60th anniversary of the institute in New Zealand, and the 100th internation-ally. Details are in the advertisement in this issue.

During the day, CILT is holding events of interest to those attending and to others. In the morning there will be tours to either Tranzit’s electric bus overhead ‘super-charger’ at Island Bay, by double-decker electric bus, followed by a visit to Tranzit’s depot for a talk on e-bus operation; or to NZTA’s Wellington Transport Operations Centre at Johnsonville, possibly along with a view of the Transmission Gully works at the Porirua end. A reserve option is a visit

to the Opus Central Laboratories in Petone.These tours start at 10.30am, and return

to the Ministry of Transport’s head office on Queens Wharf by 12.30pm for lunch.

In the afternoon (also at the Ministry of Transport), we are going to return to the Forum that was a feature of the dinner day in the past. Sponsored by Tranzit Coach-lines, it will take the form of a panel on the topic of identifying the major chal-lenges facing transport and logistics in New Zealand in meeting the country’s climate change targets. This is probably the first time the various parts of the NZ transpor-tation and logistics sector have collectively faced each other to discuss the climate change targets.

These challenges may be:• Infrastructure – is there additional

investment in capital required? • Financial – will there need to be

unplanned expenditure?• Business strategies and operational tar-

gets – what is the impact, and will it be detrimental?

• Staff motivation – are they fully commit-ted, are there any outcomes/incentives for staff?

• Daily operations – what would the impact be?We would also expect the panel to be

probed on the urgency of countermeasures, and whether the reaction to the policies can be gradual and spread over many years.

The tour, lunch and Forum together will cost $100 plus GST.

Tours and Forum prior to the CILT Awards Dinner

Dave MacIntyre is an award-winning journalist who specialises in transport and infrastructure issues within New Zealand; he can be contacted at d.macintyre@xtra.co.nz

Cont. from page 18

The National Council and the Central Section of the Chartered Institute of Logistics & Transport New Zealand invite your attendance at the 2019 Annual Awards Dinner. We have added reason to celebrate this year as we mark CILT International’s centenary, with the New Zealand branch being in operation for 60 of those proud years!

DATE  |  Friday 18th October 2019

VENUE  |  InterContinental Wellington, 2 Grey St, Wellington, 6011.

PROGRAMME 5.30 - 6.00pm - AGM, Wellington Room 6.00 - 7.00pm - Cocktail Reception, Lambton floor 7.00 - 11.30pm - Plated Dinner, Lambton Room

DRESS  |  Formal Business Attire, Black Ties welcome

PRICES  |  Individual - $230 Table (of ten) - $2162 (all inclusive of GST)

BOOKINGS  |  Ticket purchases can be made now on the CILT website www.cilt.co.nz/event/awards-dinner/

2019 ANNUAL AWARDS DINNER

. Big thinkers and world shrinkers since 1919 .