Connecting New Zealand – The role of transport consumers

The decisions of transport consumers, from both large businesses to individuals, shape the transport system. It is important that the price for using a transport mode should match actual cost as much as possible.

Individuals, as transport consumers, have the pre-eminent role in shaping the transport system through their use of it. It is important, therefore, that price signals are as transparent as possible and users are able to respond to the costs associated with their transport options.

Major New Zealand companies influence the efficiency of the transport system through their decisions on whether to transport their goods by road, rail or coastal shipping, and through which ports they choose to export. Different types of freight can be more suitable for particular modes. Rail, for example, is suited to the movement of heavy bulk goods such as coal that move from point to point, while road can deliver goods to multiple points and offers more flexibility around the timing of movements. The decisions of our companies are also influenced by shipping companies as they make decisions on which ports they will service and when.

Some transport providers (such as KiwiRail) are working closely with key consumers of their services (for example, Fonterra) to develop transport solutions that improve productivity and reduce transport times. This can involve modifications to the existing network.

Similarly, the decisions made by individuals and families as to where they live and work, and where firms locate, shape New Zealand’s land use and transport needs. It is important to acknowledge the powerful influences of price and consumer choice in determining the shape of the transport system, particularly within our urban communities.

The government wants the costs associated with transport choices to be as clear as possible, and for the price of using each mode to match actual cost as much as possible. This will enable businesses and individuals to make the transport decisions that best meet their needs.

The impact of higher fuel prices

New Zealand has experienced a period of unprecedented high and volatile world oil prices, which has affected exporters, businesses and households. This underpins the need to improve the efficiency of the New Zealand supply chain, including the efficiency of transport activities and fuel consumption. It also contributes to the reasons why New Zealand is investing in a mixed portfolio of transport options. The government is investing in metropolitan and rail freight to ensure the transport supply has sufficient capacity and resilient alternatives as the economy and the population grows (Figure 12).

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