IRTENZ CONFERENCE 2019 - Sharing the log task with rail

Tuesday, March 10, 2020

Andrew Locke, general manager commercial at CentrePort, was invited to the 2019 IRTENZ conference to discuss the topic ‘Moving Logs Intermodally’, and how the integration of transport hubs can increase the efficiency of the logging industry.

The debate between road and rail is one that seems to continually rage. And it’s not an issue unique to New Zealand, either. However, there can be no doubt that there is always the need to find the most efficient ways to move cargo, whether that means by road, rail, or a combination of the two. Locke, who’s lived a career in freight and has a self-confessed passion for the forestry industry, reckons that intermodal hubs could be the answer to meeting the increasing domestic and international freight demands of the logging industry, which has grown tremendously over the past 15 years. “In 2004 log exports were about 5 million tonnes, mostly to Japan and Korea. At the moment New Zealand is exporting around 22 million tonnes of logs,” Locke says. This represents an overall growth of 379%, but while the export industry presents massive growth and opportunity for the country, there’s little doubt it would have to become more efficient to keep up with the appetite for logs from countries such as China, which currently imports more than 16 million tonnes of logs. In 2004 that number was around 1 million – a 1914% increase.

Photo: Andrew Locke, commercial at CentrePort.

“We’re dealing with a macro [environment] that New Zealanders have no comprehension of. The Port of Shanghai will do about 56 million tonnes in containers this year; the whole container freight task in New Zealand is about 3.1 million. We have to be an efficient country to get the trade that we need. The world doesn’t need us,” he warns. Locke says that “the forest industry is quite a critical part of New Zealand’s future” but there are massive issues to focus on to move logs – especially by road. “The nature of what we face is that the road network can’t cope,” he says. Citing the ports of Napier, Wellington and Tauranga, Locke says that Napier has had tremendous growth of log freight in the past five years of a million tonnes (it now sits at two million). Wellington is close at around 1.7 million tonnes, having grown from under a million five years ago. “We’re starting to see constrained assets. Wellington and Napier will probably top out at three million tonnes,” says Locke. “Tauranga has started to level out.” The port currently sits at just over 6.5 million tonnes, up from 6 million five years ago.

And the demand on ports is set to grow says Locke, which means that the demands on the transport industry – and the road network – will grow too. Locke says that KiwiRail is already taking on some of the burden. In 2018 KiwiRail moved 3.6 million tonnes of logs into ports around the country, taking the equivalent of 120,000 truckloads off the road network and accounting for 21% of the country’s log exports. “KiwiRail log volumes have grown 40% over the past seven years. If KiwiRail hadn’t stepped up, this country would have been in all sorts of trouble.” Creating a hub network with KiwiRail is, therefore, understandably on the agenda. “Ports are traditionally short on land, most are land constrained and looking to develop offport intermodal hubs for efficient ways to move cargo. Hubs provide access to rail networks for the forest operator; they’re integration points for road, rail, and port.” And there are more numbers to back up the move. “The great thing about hubs is that they allow trucks to go to and from a forest seven to nine times a day, instead of making just two or three runs to the port.” So while the spread of hubs might result in fewer vehicles on the road, the utilisation of those assets already in operation would be much higher. Locke gives the example of the hub in Masterton, called Waingawa, as a log hub model that’s one of the best. “We think of such a model when we want to move 600,000 tonnes of logs through it in the future. This hub is currently doing about 380,000 tonnes.” Other hubs being looked into include developing one in Marton and one in Feilding. However, while the evidence points to the investment in hubs as being a good, and necessary, thing, there’s a bit of catching up to do on the part of KiwiRail, the forestry industry, and road transport.

“KiwiRail has been hugely supportive of this development and we’d like to do more business with it, but it does not have the capacity at the moment. Ninety-six percent of all log wagons in the KiwiRail fleet are 35 years old. That’s a legacy issue; we haven’t invested in infrastructure,” Locke says. “A billion dollars will be invested in rail over the coming two years; that’s very exciting. However, let’s just temper ourselves a little bit…we’re really addressing the things we should have addressed over the long term.” On the logging industry, Locke says a major constraint is people. “There are fantastic things going in in the forestry industry – innovation and technology with robotic machines to reduce the number of people in the operation and increase productivity.” Finally, on the road transport industry, he questions why it takes so long for innovations to be given the go-ahead. “It takes so bloody long to do anything in New Zealand! McCarthy Transport with their 58-tonners… Ian Emmerson, who’s spent two years going through the process to get heavier trucks on the road… Pan Pac’s new trucks that can take double the load and have taken half the number of their trucks off the road… It took absolute tenacity to get that; why does it take so long? Why is it so hard?” he questions. “As a New Zealander I want to see us have the most efficient freight network we can have in the country. We think the freight task is going to double between now and 2040. How are we going to do it?”