Taking cues from infrastructural changes

Taking cues from infrastructural changes

Industrial – Workplace July 2018

Smarter solutions

Planes, trucks, boats and trains – all have their place within the industrial sector in terms of moving goods into, around and out of the country.

As New Zealand’s population increases, and consumer demands both nationally and internationally intensify, so too does the infrastructural response to this heightened activity.

Millions of dollars are being invested into this country’s roading networks, sea, inland and air ports, and opportunity abounds to improve and build on the road-rail interface.

The Ministry of Transport’s 2014 Freight Demand Study showed that road transport is responsible for around 70 per cent of New Zealand's freight task on a tonne per kilometres basis, which is significantly lower than in, say, the UK, France and Italy, where it is nearer 90 per cent.

In April this year, transport minister Phil Twyford presented the government’s national transport strategy saying the intention was to establish a more efficient, resilient and sustainable freight network for New Zealand.

“It's just about getting the best out of all modes – road, rail, coastal shipping - and government has to be a smart investor in the infrastructure that links it all together," Twyford said.

Increasingly in New Zealand, as online shopping continues to build momentum and consumer expectations around delivery timeframes become more pressing, it's the last mile of the logistics journey that’s under pressure.

Realistically and price-competitively, that’s not something that rail can help with. So the bulk of the burden will land with road freight providers.

When looking where to locate your industrial-focused business for the best efficiencies, you’ll need to seek out those locations where big bucks are being invested and spent on the roading network or within developed and evolving precincts around airports and inland ports.

In the current tightly-held industrial property market, finding well-located premises to lease is a challenge for business owners. This very constrained market has put upward pressure on prices and rents in established areas and meant that demand is being deflected out to the fringe locations, which, in time, will also become established industrial areas.

If your lease is due to expire and not be renewed, or business diversification/specialisation means you’re in the market for new premises, then retune your radar:

• Cast your net widely and even consider shifting your business operation elsewhere in New Zealand

• Look carefully at where national and local government are spending money on new transport connections, infrastructural upgrades and network improvements

• Analyse how important last mile logistics is for your business’s future and locate accordingly

• If your business is labour-intensive, look at statistics for the different regions in New Zealand and make really informed decisions about your potential labour pool

• Consider teaming up with likeminded businesses and make the distribution part of the equation more efficient and more effective. Examples such as QuayConnect in Nelson which provides supply chain solutions for customers in the Marlborough wine industry has brought together proactive logistics providers and transport operators to streamline distribution processes

• Look towards new developments offering purpose-built industrial property solutions spearheaded by experienced developers – before investing millions in a new project, you can rest assured that they’ve done the cost-benefit analyses and projections, so you can leverage off their knowledge investment.

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