Link Business

Businesses for sale

Browse All

A Look at the Transport Industry in NZ

There are four primary ways goods are transported in New Zealand: by road, rail, air or water. Each individual method is met with its own set of challenges, but overall, the transportation industry provides a wealth of jobs to Kiwis.

History of the Transport Industry

After World War II, the New Zealand highway system was expanded greatly. After the 1950s, there was heavy investment in road construction and highways.

In 1971, the advent of the shipping container revolutionised the transport industry in New Zealand. These simple steel boxes can hold a wealth of goods; much more than a traditional cargo ship. Container ships can carry more weight, stop at fewer ports and can move four times as fast as a traditional ship. Not only did this mean more goods could move in and out of the country, but it also meant additional jobs related to the ships themselves. In response to the use of these new shipping containers, new businesses were started that would service, clean and repair the units.

Many changes were also made to New Zealand’s ports to accommodate these large vessels. In Auckland, Wellington and Lyttleton, there were existing wharves that needed to be expanded. In areas such as Port Chalmers, two long berths were created in place of dry docks and old wooden piers. Presently, New Zealand has several container ports and regular ports, as many goods from other countries are transported this way.

Current Situation in the Industry

As far as road transport, New Zealand has a state highway network that measures 10,895 km in the North Island and 4,921 km in the South Island. Currently, there are approximately 22,500 trucks in New Zealand and this number includes straight trucks, semi-trailer combination units or tractor-trailers with two trailer units attached and B-trains. Sixty per cent of these trucks operate without a trailer and most of them are day cabs. Since truckers are able to drive from one end of New Zealand to the other in just over a day, sleeper cabs are very rare. There are currently 4,500 trucking companies in New Zealand, most of them family-owned businesses, with over 80 per cent of these companies having just five trucks or less.

Unfortunately, New Zealand is currently experiencing a truck driver shortage. The amount of goods transported on New Zealand roads has increased 60 per cent since 2000, but the number of people with Class 5 licenses — required for hauling heavy loads — has risen only 10 per cent. A survey completed in 2014 by the Road Transport Forum found that 85 per cent of 150 transport firms nationwide lacked drivers, with Auckland identified as being the hardest hit with an estimated shortage of 500 drivers.

While there’s no solid plan in place to fix the problem, National Road Carriers has been working on a plan as they consult with government agencies and existing truck drivers. They believe a simplified licensing system might encourage more enthusiasm for young job-seekers to join the career.

Rail freight transportation is presently active within New Zealand. The government purchased Toll NZ’s rail and ferry operations in 2008 and renamed the company KiwiRail. Bulk freights dominate rail services, as trains carry coal, logs, wood products, milk, fertiliser, containers, manufacturing steel and cars.

Comparison to Australia

In 2011, the Ministry of Transport released a Freight Charge Comparison Report and one of the key findings was that domestic transport costs, especially road transport, between Auckland and Christchurch, is actually higher than that of some international ocean freight costs, especially between NZ and Australia and Asia.

Looking to the Future

The road freight industry is expected to grow at least 75 per cent within the next 20-30 years and a shortage of available drivers indicates that a solution needs to be found soon in order to keep up with the increase in demand for road freight transport. All types of transport, whether through water, air, road or rail, will continue to be important for the success of New Zealand’s economy.

While the industry does come with challenges, the substantial growth and continued positive trends does make it an attractive place for entrepreneurs and those looking to invest in Kiwi businesses.

 

For Further Information about this article, contact your nearest LINK Business Broking office at:

https://linkbusiness.co.nz/contact-us