Freight and logistics
The Waikato is the heart of the Golden Triangle with massive volumes of freight both generating from and passing through the region on a daily basis. The sector offers vast career opportunities and will evolve swiftly with the introduction of new technologies and new methodologies to support climate adaptation targets.
The Freight and Logistics Sector is a critical enabler of economic activity across the Waikato RSLG area. State Highway 1 and the main trunk line both pass through the rohe, carrying significant volumes of freight every day. As well as goods freight, many of the growth sectors of the Waikato require efficient freight and logistics services to support their business activity.
In Aotearoa New Zealand, road freight is the predominant mode of freight transport and accounts for almost 70% of the total domestic freight movement (in terms of ton-kilometre) and over 90% of the freight (in terms of volume/ton). Rail, although a small player in terms of employment and value-added within the wider transport, logistics, and distribution sector, plays a vital linking role between, for instance, Auckland, Tauranga, and Hamilton.
Looking to the future of the sector, more than 90% of Aotearoa New Zealand’s freight is transported by road, with 42% of the total freight (by tonnage) being moved within the Golden Triangle. There is likely to be an increase in freight over the next 25 years in response to the population growth.
A recent study commissioned by Te Waka found that the overall growth in freight volumes from 2020 to 2030 in the Waikato and Bay of Plenty regions could be as much as 47% to 65% (insights sourced from Waikato & Bay of Plenty Freight Action Plan, Te Waka. Due for publication in June 2023.).
Kirikiriroa Hamilton is the third-largest city in New Zealand’s North Island, located around 125 km south of Auckland. The city forms the southern point of New Zealand’s Golden Triangle, a geographic node encompassing Auckland, Tauranga, and Hamilton. It is responsible for approximately 50% of the country’s economic output and is home to half of the country’s total population. At present, the population of the Golden Triangle region is approximately 2.47 million people. It is expected to grow to 3.24 million by 2043, registering a growth rate of 31%. This may create unprecedented demand for freight handling facilities in the region.
The sector employs 7,064 workers across the Waikato, with 2,337 of these workers in Hamilton City.
The Freight and Logistics sector is heavily skewed toward a male workforce (22.2% of workers in the sector are female) and most workers in the sector are low-skilled (74.3%). The Waikato has a heavy reliance on migrant workforce for postal and courier deliver, but there are low numbers of migrant workers across the balance of the sector. Of the workforce in this sector, 19.7% identify as Māori and 61% of the workforce in this sector have no post-school qualification (2018 Census).
Looking to the future, the sector workforce is forecast to increase by 12.4% from 2021 to 2026, making it the seventh fastest growing sector across the Waikato.
Data from the Work Information Platform helped identify future workforce needs for both publicly and privately funded investments across the Waikato.
The Group used Infometrics forecast modelling to identify future workforce opportunities in the sector. They met with Driving Change to better understand the complexities around the New Zealand Driver Licence system and have surveyed stakeholders to gather insights relevant to the sector. The Group considered current and pending significant investments in civic and private commercial building and infrastructure, as well as the associated increase in Freight and Logistics associated activity and also the rise of export firms and the growth of the Ruakura Inland Port as further drivers of growth, and as creators of new roles that require expertise (e.g., Freight Forwarding).
The top 5 occupations are: Truck Driver (General) 23.4%, Courier 6.5%, Bus Driver 5.9%, Labourers 4.6%, Taxi Driver 2.8% (Infometrics Ltd. (2022). Waikato RSLG Area - Freight & Logistics Sector Profile. Infometrics Ltd).
While some of the worker shortage is for drivers (heavy machinery, road freight, warehousing), there is also need for logistics workers across the Waikato (Freight Forwarder/Logistics Planner). Training courses are part of the solution to address shortages, including drivers’ licence training (Drivers Licence Classes 2, 3, 4 and 5; Endorsements F, R, T, W), the University of Waikato‘s Supply Chain Management undergraduate course, and Wintec‘s Graduate Diploma in Supply Chain Logistics.
However, the sector may not be as appealing as others, with 71.4% of the workforce working 40 or more hours and 29.3% working 40 to 49 hours a week, and roles often requiring significant time away from home and family. Drivers can experience moderate wage growth and limited career development opportunities.
Case Study: Freight Action Plan for the Golden Triangle
Freight and logistics leaders have recently collaborated to produce a Waikato and Bay of Plenty Freight Action Plan, in partnership with Te Waka.
The Freight Action Plan, due to be released in June 2022, highlights key challenges and opportunities for this growing sector, including:
- Opportunities to increase the capacity of the network across the region to meet strong forecast demand
- Opportunities to improve supply chain resilience
- The need to continue mitigating current and expected skills shortages, with a strong focus on truck driver licensing/training and ensuring appropriate immigration settings to attract international talent
- Opportunities to embrace new technologies, particularly hydrogen
The production of this report demonstrates the willingness of the freight and logistics industry to collaborate and speak with a collective voice on important issues affecting the sector in the region, including key skill shortages. It also highlights important implications for related sectors, like the critical role the Construction and Infrastructure sector will need to play to increase the capacity of regional freight networks to meet demand and support technology change (e.g., rollout of hydrogen infrastructure).
Industry partners that co-funded the development of the Freight Action Plan include KiwiRail, Port of Tauranga, Fonterra, Netlogix, Tainui Group Holdings, Mondiale, and Priority One. Other industry representatives that were interviewed to help create the Freight Action Plan included Swire Shipping, Carr & Haslam Transport, Coda Group, Waka Kotahi, Ministry of Transport, Bay of Connections, and FoodStuffs.