Story: Freight and warehousing

Page 6. Deregulation

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The end of regulation

The 1980s and 1990s saw significant change in New Zealand’s freight networks. Most importantly, between 1983 and 1986 the government removed the limits on long-distance trucking. The licensing system, which had controlled which goods could be carried and where, also ended.

Road transport

For trucking firms, deregulation opened the door to local expansion and entry into the Australian market. Long-distance heavy road freight flourished. Trucks had carried 49.7% of land freight in 1972; by 1993 this had risen to 81%.

Companies such as Peter Baker Transport, founded in 1972, were transformed into national operators with wide-ranging interests – in this case with 27 branches, including transport, courier and bulk freight divisions, shifting over 13 million items annually. Other companies expanded internationally.

Freight brokering

Following removal of restrictions on road transport, freight brokering businesses developed. Freight brokers arranged the carriage of goods across regions and modes of transport on behalf of consigners. A result of freight broking was a decrease in rates, and sometimes minimal margins for carriers.

Driver fatigue

With the growing use of trucks for long-distance freight, driver fatigue and increased accident risk became an issue. Legally, drivers were not permitted to drive for longer than 11 hours, but a study carried out by the Road Safety Trust in 2000 found that this maximum driving time was exceeded by one-third of all freight drivers, and a substantial number of additional hours were spent on non-driving work. Drivers of logging or refrigerated trucks, or on long-distance routes, were particularly likely to suffer fatigue.

Waiting for the train

In the early 1980s food manufacturer Wattie’s wanted to use road transport rather than rail to get their canned goods to markets in the Auckland region. Goods sent by rail from Hawke’s Bay could take up to nine days to arrive, and only half got there within the desired two-day period. When the Transport Licensing Authority and the minister of transport refused an application to use road freight, Wattie’s and transport company Freightways went to court and won.

Rail freight after deregulation

Road transport increased its share of freight at the expense of rail. In 1980, 12 million tonnes of freight were carried by rail. This dropped to 9 million tonnes in 1987, and did not reach 12 million tonnes again until 1998.

Shipping

Ports became commercial businesses and controls on cargo handling were removed in 1989. The government removed cabotage (the restricting of coastal shipping to New Zealand vessels) in 1994. Two years later the Maritime Union of Australia abandoned the informal accord with New Zealand’s Seafarers Union that had kept non-Australasian crews off the Tasman routes since 1931. From 1995, international ships travelling along the New Zealand coast in the course of longer voyages were able to provide a freight service.

Staff numbers fell dramatically after deregulation. Cargo-handling gangs were half the size they had been, and work continued round the clock. Crew numbers dropped by 20–40%. Ship turnaround time was almost halved and freight costs decreased.

In this new environment, companies competed for freight. In the North Island, it was Ports of Auckland (running ports at Auckland and Onehunga) versus Tauranga Metroport Auckland (run by Port of Tauranga); in the South Island, it was Lyttelton Port of Christchurch versus Port Otago (running ports at Dunedin and Port Chalmers).

Warehousing

Warehousing changed with shifting transport patterns. Now they could use road freight, some businesses closed down warehouses that had served local areas. Many suppliers of warehousing also began to offer administrative services and inventory control.

Transport operators, particularly in Auckland, Wellington and Christchurch, provided warehousing for their manufacturing, importing, exporting and retail customers. In the 1990s some manufacturers and producers began using independent logistics companies, which handle warehousing and supply, including organising freight.

How to cite this page:

Matthew Wright and Megan Cook , 'Freight and warehousing - Deregulation', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/freight-and-warehousing/page-6 (accessed 20 July 2019)

Story by Matthew Wright and Megan Cook , published 11 Mar 2010