Monday, 6 Dec 2021

Strikes at KiwiRail disastrous for stretched supply chain says road transport sector

Stand by for more freight delivery frustration over the Christmas season, with a warning 24-hour strikes by KiwiRail workers could reverberate “for weeks” on an already severely stretched supply chain.

The country’s biggest road transport organisation, Transporting NZ, says truck firms are “significantly” concerned about how they will pick up the strain if 24-hour scheduled strike action by KiwiRail members of the Rail and Maritime Transport Union proceeds in the North Island on December 17 and in the South Island on December 16.

State-owned KiwiRail has issued a force majeure notice to customers advising the two 24-hour stoppages would potentially impact rail and Cook Strait ferry services “not just on the days of the strikes but also the days leading up to and following them…”

The union is seeking an 8 per cent pay rise for KiwiRail workers. It says they had no wage increase last year despite their hard work in the supply chain log jam, while bosses received bonuses.

Mediation between the parties is due on Monday to try to settle the collective bargaining effort.

Union secretary Wayne Butson is hopeful the sudden exit this week of controversial KiwiRail chief executive Greg Miller will bring “a different approach” to the table next week.

That’s a hope shared by Transporting NZ chief executive Nick Leggett who said New Zealand simply can’t afford the supply chain to grind to a halt in the holiday season.

“We already have a supply chain under significant national and international pressure, we have a shortage of drivers in some places and a lot of freight to move.

“While rail is a small carrier in relation to road it does pick very vital elements of the freight task so anything that compromises that in an already constrained supply chain, even if its just for 24 hours, is going to ricochet for weeks potentially.”

An example of the potential ramifications was what would happen to container movements in Auckland.

“There are KiwiRail staff involved at Metroport in Auckland. Take them out for a period and what does that do to the Port of Tauranga for container movement?”

Mainfreight managing director Don Braid, out delivering freight himself on Friday because of the current load, said strikes would be “a pain the a*** for our customers”.

However he said the workers were “the backbone” of transport infrastructure and hoped they would find a resolution.

Two days of strikes would extend the availability of freight to customers out to four days, he said.

Leggett said there was also concern about looming proposed KiwiRail network service outages over the holiday period.

“We’ve had concerns raised about outages for maintenance which of course has to happen. Potentially whenever rail can’t meet its obligations whether it’s due to strikes or maintenance on the track, road has to pick that up.

“And road is already stretched by a labour supply shortage and more freight than usual. It’s going to add a lot more stress.

“I think there’s going to be a lot of frustrated people around the holiday because things are not going to get to them as quickly. The ferries are already operating at under-capacity, if we have no ferries for 24 hours there are going to be real issues arising potentially for weeks afterwards.”

KiwiRail has yet to respond to the Herald’s request for information about the potential impact of the strikes.

Leggett believes the KiwiRail workers have a justified claim for an increase.

“Certainly in the road transport industry we have pretty strong reports of pay increases happening. That is a reality of the environment we are in.

“We are short of labour, inflation is upon us and people have worked to the bone over the past 18 months.”

Asked if he thought there would be public sympathy for the KiwiRail workers, Leggett said he believed there would be support for a wage increase, but “I suspect that sympathy will soon evaporate if freight movement grinds to a halt”.

He believed the exit of Miller “will relieve a lot of tension”.

“But they haven’t even got a [permanent] chair. They need to resolve their leadership … it’s time for cool, calm heads.

“The country just can’t afford for the supply chain to grind to a halt. We’ve got to avoid that. In avoiding that, we also have to respect there are people who could well be due a wage increase.”

Acting KiwiRail chair Sue McCormack told the Herald an announcement on a new board chair was expected soon, “with a likely January 1 start date”.

The chair is appointed by KiwiRail shareholding ministers, Finance Minister Grant Robertson and State-Owned Enterprises Minister David Clark.

Former chair Brian Corban died in May.

Clark’s office responded that the chair appointment was “under active consideration and the minister has no announcement to make at this time”.

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