Petrol at $3 a litre? Thank goodness! I admit it’s easy for me to sit at my desk, located a mere kilometre from my home, and take the ethical high ground about the rising price of oil being a good thing. Within days of this being published, I expect an angry truckie to drive their semi through my wall for uttering such a comment.
Change comes from either pain or innovation, and prices at the pump of over $3 a litre suggest one hell of a lot of pain to me.
We have to change our approach towards the use of natural resources. Case in point: in 1998 when Auckland’s power went out for five weeks, companies estimating losses of $60,000 a day uprooted from their CBD abodes and resettled in suburbs with power like Albany and East Tamaki. An estimated 27 businesses made the relocation a permanent one, citing lower overheads, more abundant staff parking, and ease of travel for their staff – and one because their sprinklers turned on and stayed on for a day – as the reasons not to return.
To lessen the pain requires foresight and innovation. The problem is that embedded industries find it difficult to innovate. For example: the road freight industry’s idea of innovation at the moment seems to be adding a third semi-trailer, or increasing to 50 tonne gross vehicle weight.
I am not saying I have the answer, but here’s a theory. Fuel at $3.80 a litre (it could happen) makes direct transport from island to island – even from Auckland to Wellington – unviable for non-urgent supplies. Domestic shipping picks up the slack – more ships more often with the re-opening of ports we already have, such as Wanganui, Oamaru and Timaru.
Using current technology, domestic goods are fed quickly through distribution centres to an army of smaller, more economical hybrid or even electric delivery vehicles that take goods to their final destination.
Sure, there will be hurdles to overcome, but look at the potential gains: a decrease in environmental impact with lower carbon footprints; jobs could change rather than be lost – someone has to operate the ports, the DCs, the vans etc; and the redistribution of population, revitalising the small town ports and bringing commerce back to these areas.
The marriage of cheap oil and industrialisation has been a mixed blessing to this country. The control of agriculture has passed to large firms in the name of ‘economy of scale’. But what happens to corporate margins when the cost of sending cattle triples? The price goes up. It could (in theory) go up so much that having a small farm will become viable again. We have Aucklanders eating steak from Otago and Dunedinites drinking milk from Whangarei – how much longer will this be ‘economically viable’.
Change is inevitable. We could blame the government, and we could protest against the oil companies. But we could also embrace change and grow.
Brooke Anderson is the director of XM Software, experts in 3PL efficiency software. He can be contacted at brooke@xmsoftware.co.nz
- Brooke Anderson
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