E & Y study shows congestion costs New Zealanders close to a billion annually

Combating the congestion: Creative ways to beat the traffic

Business at work 6/1/01

Auckland's traffic congestion is not just about irate commuters and constant traffic snarl-ups. It's also an issue that costs businesses dearly. Sue Weston hunted out some Auckland businesses finding creative ways around the log jams... so they can get on with business.

Early morning in Auckland and by 6.30am the traffic on Auckland's motorway system and feeder roads is heavy, but flowing. By 6.45am on many routes it is starting to clog and by lam - it's back home for another coffee.

"Five years ago, a truck could make nine or 10 deliveries from the port around the city in an eight-hour day. That's down to four or five a day now, even taking into account increased efficiencies at the port."

So says Barrie Lunny, the general manager northern region for the Road Transport Association, (www.nzrta.co.nz) in discussing the day-to-day impact of traffic congestion in Auckland.

This example brings the problem into sharper focus than the aggregated figures, such as an annual cost to business of $755 million in 1997. That figure, from an Ernst & Young study, is now estimated to have increased to at least $1 billion a year.

Invariably everyone is trying to absorb costs as much as possible by working smarter. But it is often a juggling act to satisfy customers' expectations for speed and frequency on the one hand, with the need to avoid extremes of unachievable schedules or vehicle downtime on the other.

Freightways Express (www.freight ways.co.nz) operates New Zealand Couriers, Post Haste, Castle Parcels and SUB60 Couriers in the Auckland region. Managing director Dean Bracewell says that the existing system of spokes feeding into a central hub at Penrose has been refined to work around traffic problems.

"We've had to introduce additional satellite depots in suburban areas, ensuring the courier spends more time actually out in their delivery area. We now have additional shuttle trucks to move packages in volume between the hub and satellite depots, so there's less vehicle movements."

Despite this innovation, traffic congestion still means that Auckland customers have fewer pick-ups in a working day than is possible in other New Zealand centres where congestion is less of an issue. Fewer scheduled pick-ups, combined with lower stock levels and high end-customer expectations, can result in a company using urgent pointto-point services, such as SUB60, more frequently. Bracewell says this is a cost to Auckland businesses, as is the alternative approach of carrying more stock.

Inter-city deliveries are hit too And the additional costs aren't just incurred by Auckland businesses, he says.

"If the roads jam up in Auckland, it can mean inter-city deliveries are compromised as well. If we can't get deliveries to our plane in Auckland on time, it will arrive late in Christchurch, and in turn delay arrival into Invercargill."

Managing the expectations of clients outside Auckland was also mentioned by Rod Giles, managing director of Contract Warehousing (www.cwlnz.co.nz), which operates from Pakuranga in Auckland's eastern suburbs.

"We tackle the problem when preparing quotes and negotiating service level agreements. But clients based outside Auckland are not always aware of the impacts on schedules of traffic in Auckland."

Traffic congestion issues have led to more complex and formal service level agreements between distribution companies and their clients, says Tim Munro, chairman of Logistics New Zealand (www.log-inz.org.nz), and general manager of Stocklink Distribution. "Instead of larger sub-regions for deliveries, smaller areas are now used, and this has made service level agreements increasingly sophisticated."

Increasing congestion affects staff commuting time, and for some companies this is a significant enough issue to influence location or work hours. Nigel Ingham, of Colliers Jardine Commercial (www.colliersjardine.co.nz), says staff retention objectives, as well as access to a suitable employment pool, is now a factor in location decisions for companies which are already on the move.

He mentions a company which is locating as close to the international airport as possible, so that executives can check-in for their flight, then return to their desk for another hour's work before the flight. Ingham adds that companies with significant staff numbers in the eastern and south-eastern suburbs are often keen to locate in Mt Wellington.

Both Mt Wellington and Penrose have become prime real estate for distribution companies who want motorway and railhead access, and for other companies which also seek motorway access, says Ewan Orsborn, of Barfoot and Thompson Commercial (www.barfoot.co.nz).

Demand has driven price up, encouraging some companies to move to the East Tamaki area, which now has improved transport links with both the airport and the eastern suburbs. The Airport Oaks area is also growing in popularity. Service and manufacturing companies are increasingly looking to the Rosebank and Avondale areas which are only eight minutes from the CBD, says Orsborn.

And the commute for staff

Staff commuting time was significant enough for graphic design company Paradigm Productions to allow flexible work hours for its six staff. Director John Ringer says most staff at the company, based in inner-city Freemans Bay, start and finish work later to avoid the worst of both rush-hours.

Teleworking is sometimes an option, but he explains that neither teleworking nor electronic contact with clients from the office is fully satisfactory when client approval of colour proofs is required.

"Colours are dependent on the recipient's computer screen, so we still use couriers extensively." Personal contact with clients remains important, both to complete existing jobs, but also to identify opportunities for other work.

"The lack of a comprehensive inner city public transport system in Auckland with a single ticket system, effectively means that we have to drive to meetings with clients."

While businesses are looking at how they can work around congestion, both the Auckland Regional Chamber of Commerce (www.chamber.co.nz) and the Auckland Business Forum are planning to put the issue firmly on the political agenda for this October's local body elections. The central objective for the chamber and forum campaign is the completion of an integrated transport corridor by 2010.

Chamber of Commerce CEO Michael Barnett says they are not asking for a whole new roading programme, just the completion of what was planned for 30 years ago, but not completed.

Business is frustrated by the cumbersome current approach, with too many government authorities involved, instead of one single agency with a clear mandate, and also concerned about an under-resourced Environment Court.

"The regulatory system needs to keep pace with local and global business changes, and it needs to be resourced. Auckland business has an option - we can either tinker with the problem and accommodate congestion; or we can stand up and take a stand on infrastructure issues. We'll be doing the latter in the lead-up to the October elections."

Sue Weston is an Aucklond-bosed writer.