Back in April principal economist Brad Olsen from NRC partner Infometrics said hopes of a soft landing for the New Zealand economy “are disappearing.”

Sitting here is August, seeing how much the freight sector has slowed down, it is hard not to agree.

Just this week shivers were sent throughout the supply chain with Swire Group’s Pacifica Shipping announced it is set to pull out the Takutai Chief coastal freighter due to difficult economic and operating conditions. According to country manager Alistair Skingley, the transport sector in New Zealand was facing a number of serious challenges. Losing the Takutai Chief is a significant dent to New Zealand’s supply chain, with over 1300 TEU capacity now pulled from the system.

The recent grounding of the Aratere Cook Strait Ferry was another canary in the coalmine example. You’d think losing a significant percentage of capacity across the Strait would cause major freight delays and take weeks to recovery. This was the crisis that wasn’t…freight demand has got so soft, the loss of the Aratere was barely noticed from a supply chain perspective. Just 18 months ago beaching the Aratere would have been a body blow to an overheated freight system. Perhaps that is one silver lining – the timing was good.

Our physical economy, the speed of goods travelling through the system, is a lead indicator of what is happening in the “real economy”. It is not measured accurately, and as a result, politicians in Wellington are in danger of missing the read on what is really happening early enough to do something about it.

Road freight demand is one of the best lead indicators we have available. The Reserve Bank managing the OCR looks at a lag indicator of inflation numbers…after the ship has sailed.

Our message to government and the Reserve Bank is simple. Pay attention to what’s going to freight demand, or that soft landing will certainly disappear and the economy will overshoot the runway.

– By Justin Tighe-Umbers, chief executive, National Road Carriers.