Congestion charging on New Zealand roads should exempt goods vehicles to avoid efficiency benefits being offset by freight fees and surcharges.
That’s according to national road freight association Transporting New Zealand in response to the Government’s draft legislation which will enable local councils to propose time of use schemes (a form of congestion charging) on their networks.The Land Transport Management (Time of Use Charging) Amendment Bill is set to be debated in Parliament this year.
Transporting NZ chief executive Dom Kalasih says that all New Zealanders are currently indirectly paying for congestion, either through unproductive time spent in gridlock, or increased freight and delivery costs for everyday goods.
He points to the TomTom Traffic Index, which shows New Zealand’s largest cities are significantly more congested than comparable Australian centres, with Kiwis spending up to 35% more time commuting.
“That’s a massive drain on labour productivity, and we need time of use charging as a tool to address it,” Kalasih says.
While the bill would allow councils to propose time-of-use schemes, design and implementation will be led by the NZ Transport Agency (NZTA) and be subject to ministerial and Cabinet approval.
Kalasih says this centralised control will be good for ensuring national consistency and effective delivery, but it risks deterring council participation.
“The bill has a backstop allowing the Government to propose schemes through NZTA if councils don’t act within three years, but it’s difficult to see a congestion charge successfully going ahead without joint buy-in from local government.
“The select committee considering the bill will have to take careful note of submissions from councils to ensure the enabling legislation will actually deliver enduring time-of-use schemes within a reasonable timeframe,” Kalasih says.
While the proposed legislation would allow congestion charging to be adopted across the country, Auckland is the primary candidate.
Ministry of Transport modelling suggests that effective charging could cut peak Auckland traffic by 8-12%, reducing road congestion at peak time to around school-holiday levels.
Kalasih says that depending on the design of the scheme, congestion charging could be a game changer for freight movement around Auckland.
“While the individual cost benefit calculation will be different for all road freight companies, meaningful improvements in trip times should outweigh modest congestion charges during peak times,” says.
According to Ministry of Transport analysis, an Auckland time-of-use charge could reduce freight vehicle kilometres travelled in severe congestion by between 1.6% in the city centre and up to 23.9% across the regional network.
Kalasih says Transporting NZ broadly supports the draft bill but is concerned the proposed legislation strictly limits exemptions to emergency vehicles only.
“This restriction on exemptions is bad news for bus users and road freight businesses who will have to pass those costs on to consumers.
“Overseas schemes allow for wider exemptions. Around half of all vehicles in the London charge area are exempt or qualify for a discount. Ruling them out entirely will prevent a context-specific assessment being completed, such as where a scheme operates on key freight routes or around freight or passenger hubs.
“Heavy goods vehicles represent only around 6% of total vehicle kilometres travelled, making trucks a small element of urban congestion.
“Where at all possible, road freight firms already avoid peak-travel, with the overwhelming proportion of freight movements occurring during the inter-peak period. When a truck is travelling at rush-hour, it is almost certainly due to the customer’s capacity to receive being restricted by staffing and logistical constraints,” Kalasih says.
As an example, he points to Port of Auckland’s container booking system that hikes charges for trucks picking up or dropping off containers during peak times. The end result has seen only small shifts in demand to off-peak times, due to inelastic customer demand. As a result, businesses and consumers have been stuck with higher freight rates and charges.
Kalasih says Transporting NZ will work with its members to ensure freight considerations are addressed during select committee deliberations later this year.
“With bipartisan support and constructive engagement, this legislation could be a game changer for New Zealand’s transport system and economic productivity, as long as supply chain considerations are taken into account.”
