Key Stakeholders of Ferries Sometimes Overlooked

"The stories of the people of Taranaki Whānui ki Te Upoko o Te Ika and Ngāti Toa Rangatira (Te Whanganui-a-Tara) and Te Ātiawa o Te Waka-a-Māui are at the heart of this project. Their history and sense of place expressed in design, the environment and customer service.

Mana Whenua partnerships help shape tomorrow’s Interislander.

It’s not just the narrative, it’s everything. It’s the waka hourua, the two hulls, and the moana that connects us.”

Kura Moeahu, Te Rūnanganui o Te Āti Awa ki Te Upoko o Te Ika a Māu

There are many strands to the Interisland Rail Ferry (iReX) renewal story - some of which have been conspicuously overlooked in recent narratives – like that of Mana whenua and the Customer and Users perspective.

As a project funded and developed by New Zealanders through our Central Government entity KiwiRail, these matters form centre stage in a way that is more than just a basic utilitarian concept of running a ferry between two islands – it is more than a concept that a solely private, regional or narrow focused developer might take where they seek to just maximise profits or gains for their shareholder. However the customer and users should always be more centre stage in a story such as this as they are the prime “commercial” reason that such services exist. So let us examine some of this here.

Customer and User perspectives

From a customer user perspective for Interisland ferries there are three broad customer market segments - Passengers (Both with and without cars), Commercial Vehicles and Rail based freight tonnage. I examine briefly each of these in turn.

Customer Segment 1 - Rail Freight

Much of the recent discussion and debate has centred around the need for Rail capable based ferries, so I will start with that, as it seems to many to be the proverbial elephant in the room.

The fact that the cost to build new rail enabled ships themselves is similar in cost to new non-rail enabled ships seems to have escaped many people. The difference in cost between having a no rail ferry service and a rail ferry service is more to do with extra space for marshalling rail wagons at Picton and Wellington and that of linkspan development – so it is landside issue. Whilst these incremental development capital costs may be material – how big they are relative to the other matters remains to be disclosed. However, from what I understand, the differential costs for a rail capable interisland service relative to one that is not rail capable may not be as big as some protest them to be and the consequences of not doing it may indeed be many times larger.

There are many benefits to having a rail ferry system connecting the Islands. Many have been previously already canvassed so I will not re-litigate them here. One important one to note however, is that Rail can take 18 tonne axle loads which is 72 tonnes per wagon – it is ideal for heavier loads which road cannot take except by damaging pavement or incurring huge extra expenditure in upgrading infrastructure to cope with it. For now then, lets us assume we want a connected national rail network with all the commensurate benefits that brings such as lower climate changing CO2 emissions, heavy freight capacity, safer journeys, greater improved national logistics capability, higher capacity, resilience etc.

The argument here though is not just about the mode, in this case rail or road, it is about how we efficiently, and in a lower carbon way we deliver freight between the islands to meet customer service promises. Further, it is also about national distribution of domestic goods such as food and consumer durables from national warehouse, where goods are landed from overseas and stored awaiting distribution around the country (eg. Auckland to Christchurch), and exporters time schedules for Port loading. By definition it’s about supporting importers and exporters to be competitive as I have stated in some of my previous articles.

Not everything is Just in Time (JiT) and rail is perfect for three days delivery to Christchurch ex Auckland and four days delivery ex Auckland in forwarding freight at a lower price point.

So how does this work for service provision on rail for the customer? The plan is to push each day for three trains ex Auckland moving to four trains ex Auckland at a consist of 40 wagons each train (currently it's two trains ex Auckland at 30/32 wagons) to the South Island per day with extra volume to be added from Napier (think Watties food production etc) / Hamilton / Palmerston North / Wellington as we move down the North Island Main Trunk Line. This therefore is one of the key assumptions behind the additional ferry capacity – one full 40 wagon train per sailing with ultimate surge capacity being six 40 wagon trains per day in the future (That’s six sailings a day each way maximum over the two ships).

Currently dispatching Freight trains from Auckland at 5pm is severely constrained as passenger and Freight lines are not separated (The new Third Main Line due to open in the next year or so does alleviate this somewhat). It is therefore the case that it is challenging to physically get freight out of Auckland until post the passenger commuter peak at around 7:30pm. The four mains on the NIMT in the Auckland metro area will fix that problem but that's not a reality until at the very earliest in 2028 as it is not yet funded. So the plan here is to give freight forwarders time to collect freight mid afternoon, consolidate it in their facilities to close off around 5pm to 6pm and then have trains leaving in sequence after they are made up from 8pm to 11 pm. So a train leaving Auckland on Day 1 say at 8pm can be in Wellington after 10am the next day – Day 2 (after the Wellington morning commuter peak), be loaded onto a ferry say after noon arriving into Picton mid to late afternoon in time for the same train to be made up and leave Picton early evening to arrive in Christchurch early the next morning in time for early distribution by the customer on Day 3 in Christchurch. This is a great service with really just one day (Day 2) of full transport. Other trains will follow behind with similar patterns depending on the freight priority. This is ideal for Freight forwarder distribution products from say Auckland, Hamilton, Palmerston North, Napier and even overnight from Wellington to Christchurch. Good reliable consistent customer service at reasonable costs to Rails key Freight customers – the Freight Forwarders.

So, who are some main customers for Interisland Freight? Well think major New Zealand based domestic and international logistics companies such as:

• Team Global Express (Formerly Toll NZ’s Toll TranzLink)

• Mainfreight

• Watties

• PBT Express Freight Network

• Dynes Transport – (shout out to my high school of Tapanui, West Otago)

There is another story here too - Asset reliability. KiwiRail’s wagon availability is now 94% (the highest it has been for a long time) assisted by the recent investment in 700 new wagons with more to come. Locomotive capacity, availability, reliability and driver rosters have really impacted service over the last two years what with Covid etc. However, it is fair to say that KiwiRail are getting on top of it now and 10 additional locos late last year has helped for traffic capacity ex Auckland. Realistically it will be two years until the new South Island locomotives will be in the fleet and then KiwiRail will have additional capacity for customers much improving its service level and capacity.

There is a plan for freight growth and the capacity in the infrastructure and assets are critical. This is a fact that many commentators are blind to and simply do not seem to understand. It has been natural that underfunded assets for years have resulted in poor reliability and no spare capacity for growth. Air New Zealand would not survive if it had to operate 60-year-old 1960’s DC8’s or 1970’s DC10 aircraft which is the equivalent of the situation currently on the South Island.

Key parts of the investment in the freight growth plan that underpin this development include:

• Auckland metro passenger and freight line split (4th main – 3rd main currently in delivery) - post 2028

• Increased containers from Auckland port to Southdown with more storage capacity for shipments to Ruakura (2024)

• Increased trains (premium – maybe 24 hours to Christchurch in future?) and 3/4 day economy service once assets arrive (post 2025)

• New train control system to increase train frequency (system in place 2026)

• Electrification to Hamilton completing the main trunk electrification from Auckland to Palmerston North (early 2030’s)

• Intermodal hubs in Spring Creek (south of Picton) for freight staging for Cook Strait (2024) and Mosgiel near Dunedin

• Bunnythorpe near Palmerston North (Lower North Island freight consolidation for lower North Island distribution centres based out of Palmerston North) - 2028/2032

• Capacity and volume-based customer pricing / seasonal pricing to attract smaller container freight forwarders (2024/25) who may not have used rail in the past as KiwiRail did not have spare capacity

• Bigger capacity ships to take 40 / 45 wagons each sailing – project iReX as noted here.

The key issue to highlight here for Interisland capacity is the significant lack of land side "surge capacity" options at the ports of Wellington and Picton which restricts the Ro Pax (non-rail based) model operating efficiently. This is particularly the issue in the peak season from November through to March.

The RoRo rail ferry system assumption here simply relies on a shunt of wagons onto the ferry which is achieved within 45 minutes within a general two hour ship turnaround time. This could be tightened to up to one hour turnaround to ultimately allow up to three return sailing a day of each ship when required under seasonal surge conditions.

The RoPax non rail based system, which involves lifting containers off the rail wagons and onto trailers, takes an additional 45-60 minutes on to- of the above which reduces significantly the turnaround time available for the ship to meet the sailing timetable and therefore renders the operation for rail and ferries potentially inefficient.

It's also about about risk and safety when you are turning a ship around in 120 minutes (similar to a plane) and the RoPax no rail based ferry system requires trolleys to be loaded in the same channel as trucks creating bottlenecks at loading – not an efficient or even potential safe operation.

There is also much congestion and risk to loading times created through minimal land side capacity to operate load lifters and store them at each port location in Wellington and Picton. With Rail wagons they return to the point of origin and don't take up valuable land side availability.

Overseas ferry terminals have plenty of land to site containers / trolleys for ship loading but in New Zealand, due to the ports geographic physical constraints at Wellington and Picton, we don't have that luxury.

So, whilst those against Rail capable vessels state that land side rail infrastructure will cost extra and it's cheaper for rubber-based trolleys to take rail tonnage (Or worst case does not have rail at all) they don't understand the risk to ship turnaround time which is crucial to making money (similar to airlines). Bluebridge only load trucks / cars and passenger – KiwiRail have all this plus rail freight wagons.

If this freight was all transitioned to trucks neither Bluebridge or Interislander could operate the number of sailings per ship per year that occurs today (6,300 one way sailings pa) with utilisation of 79% (the balance being time for repairs / maintenance / surveys etc ) which would seriously impact the connectivity of people and freight between the islands with a major impact on the customers of the services.

And here’s another point - in relation to another mode - Airline On Time performance. The best in the world is at 85% with Air NZ at 79% and aiming for 83%. KiwiRail for all freight trains is 88% and their premium freight trains at 85% - In Australian rail freight operations are about the same. Interisland On Time Performance over the last six months has been 92%.

So, this investment in Interisland rail capacity is about unlocking our freight capacity to join together our nation making it stronger and more resilient.

Customer Segment Two - Commercial Vehicles

Commercial Vehicles are the various trucks and other non-passenger road-based vehicles that travel aboard the ferries. Some are full truck units with their trailers attached – others are trailers towed by small road tugs, leaving the motive power unit at either side of the strait to be reattached to the trailers at the other side. These trucks carry all manner of things like rail does but also include some things not transported on rail at all, such as livestock and very time sensitive perishables or highly time sensitive “Just in Time” inventory replenishment freight. Therefore, efficient transfer of these vehicles across Cook Strait is a critical imperative.

For those full trucks driving on board to across Cook Strait, it is often normal for the driver, often an Owner Driver contracting to a bigger freight forwarder, to travel with their truck. Often, they may be tired on reaching the ferry terminal after say a 9-hour drive from Auckland and desire to get aboard the ship as quickly as possible to have some food, rest and /or recreation.

The facilities for these drivers could be better so trucks that arrive early have space to park where drivers can wait in some relative comfort whether in their truck, or in some onshore amenity with say access to a toilet, shower, café or something else. The boarding should be efficient and quick and drivers once on board should have space for rest – in some cases a private cabin if they desire, to have a three or so hour lie down to rest. If they arrive Just in Time for a sailing that should also be facilitated also as often they are on a very tight schedule and desire to keep moving.

When disembarking the egress from the ship should be quick, easy, convenient and efficient. Generally, at the moment this side of the operation is not too bad much of the time between both operators, but issues arise at peak times - especially in the busy season from November through to end of March. So, surge capacity is a real issue here for both Bluebridge and Interisland. This project seeks to redress that issue. It’s fair to say generally that the game should still be lifted and these hard-working essential workers, our Commercial Truck Drivers should be given the respect, rest and comfort they deserve as they keep much of the wheels of commerce, and therefore much of New Zealand, moving.

Customer Segment Three - Passengers and Cars

Lastly, but certainly by no means least, there are foot passengers and those passengers in their self-drive cars.

Currently passengers using the interisland ferry services often feel like they are like being treated as self-loading freight rather than paying passengers deserving good service. This is not entirely the operators fault, however – it is a historic relic and consequence of the long term make do approach with inadequate infrastructure that New Zealand has come to know and expect for many years in such things.

The current user experience is inconsistent, often poor and not integrated at both sides of the Cook Strait journey. This iReX project is in good part about redressing that. Why should passengers board rail ferries via the vehicle deck and ramps walking alongside belching, farting, poo dropping sheep and cattle stock that have themselves been herded into stock trucks and who seem to be sadly staring down at passengers that are also being herded onto the vessel. New Zealand shouldn’t be some second-rate or worse still third-rate country. This would hardly be acceptable at major airports around New Zealand – so why should it be for surface based transportation.

Checking in, embarkation, disembarkation and luggage collection for ferry journeys between our two main islands should be world class. This project is in part about addressing that issue on the land side and on the seaside the new ferries are designed in a way for the best possible customer service, that ensures safety and comfort whilst traversing at what at times can be a very rough stretch of water, Cook Strait.

These new ferries and facilities should be comfortable and designed in a way that reflects and celebrates the New Zealand spirit and one that recognises the key “Moments That Matter” in the customer experience. These “Moments that Matter” here include:

• The booking process for the trip,

• Transfer from other modes of transport, and ease of access, to the ferry terminal (Car, Bus, Train, Taxi, Rideshare)

• Checking in for foot passenger including luggage drop

• Passengers in their self-drive cars waiting / queuing to drive onboard the ferry,

• Waiting for the process of foot passenger boarding, customer amenities such as facilities inside the terminals eg. seating, shops, toilets, showers etc

• The boarding process itself onto the ship,

• The welcoming on board the ship,

• The journey on the ship itself – comfortable amenity, cafes, bars, private lounges, cabins for private rest, children’s entertainment, quiet areas, movies etc

• Disembarkation of the ship of foot passengers and those with cars

• The collection of luggage by foot passengers with direct transfer and check through to other modes of their luggage eg. Train to Christchurch

• Potential transfers to onward transportation (Car, Bus, Train, Taxi, Rideshare)

For too long the Ferry service between our main Islands in many, if not nearly all, of the “Moments that Matter” above has been abysmal. It has been an embarrassment with check in and luggage collection and tents or temporary facilities used for people boarding the ferry like self-loading freight as highlighted above through the vehicle deck or having to board buses potentially to be loaded onto the ship. I declare yet again that this is unacceptable for what should be a world class iconic NZ experience for our own people, our international guests and visitors. We should have a sense of pride and prestige when travelling between our North and South Islands. The Interisland investment addresses those issues. A 1990’s “Toyota Corolla” approach simply will not do anymore.

Tangata Whenua

“It’s not just the narrative, it’s everything. It’s the waka hourua, the two hulls, and the moana that connects us.”

Kura Moeahu, Te Rūnanganui o Te Āti Awa ki Te Upoko o Te Ika a Māu

The interisland connection is iconic to New Zealand – it presents a once in multi generation opportunity of making a statement that binds our two lands combined into one (North Island (Te Ika-a-Maui) and South Island (Te Waipounamu). In the pre-European era, Māori did not have a name for the country as a whole. This is a link therefore, that represents the two main Islands as one land as Aotearoa me Te Waipounamu. The terminals therefore should be iconic to reflect our cultural background, be nation building and have a sense of pride for the Tangata Whenua – the people of the land and indeed all New Zealanders showing casing our nationhood to our visitors from around the World. This is not a nice to have in my view, it is essential. For too long we have been nation of she’ll be right - that will do and it shows, dreadfully. The great nations of the earth do not operate this way - they have a sense of pride in their nation hood and so should we. I am sick to death of the utilitarian, underwhelming nation we are becoming and without doing something about it I have no doubt our best and brightest will seek a life elsewhere and we will be left with mediocrity.

As Helmut Karewa Modlik, Tumu Whakarae CEO, Te Runanga o Toa Rangatira declared at the Future Is Rail conference in Wellington on 28 June 2023 “ the past can inspire and inform the present...the power of vision and hard, skilful work! It doesn’t happen by itself though...our focus is today...and tomorrow! An epic story has many chapters!”

Michael van Drogenbroek is a Rail, Freight and Public Transport Consultant & Advisor, in the Middle East and Australasia.