Manawatu Region Sector Profiles 2010 - …...includes an estimate for earnings in non-store retailing). The logistics and supply chain sector in the Manawatu region grew strongly over

Manawatu RegionSector Profiles 2010:

Providing you with a better understanding of the different components of the Manawatu Region economy and the contribution each sector makes to the demographic and economic growth of the region.

Logistics and Supply Chain

Images below are courtesy of KiwiRail and NZ Post

The sector profiles for the Manawatu have been developed by the Palmerston North City Council to provide a better understanding of the different components of the Manawatu economy and the contribution each sector makes to the demographic and economic growth of the region. Even within the broad industrial sectors of the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 there can be a diverse range of activities undertaken and it is useful to understand which sectors are growing and are likely to grow in the future and their overall contribution to jobs and incomes in the region.

The profiles are drawn primarily from Statistics New Zealand data. Background material on the logistics sectors was drawn from the book The Handbook of Logistics and Distribution Management (3rd edition) by Alan Rushton, Phil Croucher and Peter Baker. Valuable advice was also given by Walter Glass, Corporate Logistics 2010 Ltd.

For further information please contact Peter Crawford, Economic Policy Advisor, Palmerston North City Council, Private Bag 11034, Palmerston North (email: [email protected]).

Published by:

City Future Unit Palmerston North City Council Private Bag 11034 Palmerston North

Phone: 06 356 8199 Fax: 06 355 4115

www.pncc.govt.nz

Manawatu RegionSector Profile:

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Manawatu Region Sector Profile: Logistics and Supply Chain



ContentsAcknowledgements inside front cover

Executive Summary 3

Introduction 5

Logistics and Supply Chain Management 6

Key Business Categories 7

Manawatu Region Logistics and Supply Chain Sector 9

Estimating the Economic Benefits of the Logistics and Supply Chain Sector Management to the Manawatu Region Economy 9

Economic Multipliers 10

Distribution Sector 11

Overview of the Flow of Goods 11

Toyota New Zealand National Customer Centre 12

Regional Employment by Distribution Type 13

Brandlines 16

Key Regional Differences 17

Transport 21

Factors Contributing to Growth in Transport Capacity and Infrastructure 21

Regional Employment by Transport Mode 22

KiwiRail 26

New Zealand Post Group 29

Palmerston North International Airport 30

Advantages for Distribution Centre Location in the Manawatu Region 33

Central Location in New Zealand 33

Ease of Business for Logistics Operations 33

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Images courtesy of Brandlines, Foodstuffs, KiwiRail, NZ Post, Palmerston North Airport and Toyota.

Palmerston North Sector Profile: Logistics and Supply Chain



3



“The logistics and supply chain sector in the Manawatu region

grew strongly over the last decade, with

the 45% growth in employee numbers significantly higher

than the 21% increase in total employment in the region. The 1,860

jobs created in the sector between 2000 and 2009...”

Executive SummaryThe logistics and supply chain sector comprises wholesale trade, transport, postal, warehousing and non-store retailing activities and is a significant employer in the Manawatu region, accounting for 5,870 jobs (10.6% of total employment the region in 2009) and a similar proportion of total employee earnings (the employee earnings total of $228 million in the year to June 2008 includes an estimate for earnings in non-store retailing).

The logistics and supply chain sector in the Manawatu region grew strongly over the last decade, with the 45% growth in employee numbers significantly higher than the 21% increase in total employment in the region. The 1,860 jobs created in the sector between 2000 and 2009 accounts for nearly one fifth of the total employment increase in the region during this period but the sector currently accounts for just over one in ten jobs in the region. The region’s employment growth is even more remarkable when compared with national employment growth in the logistics and supply chain sector, which grew by just 8% between February 2000 and February 2009.

The key issues for logistics are land, labour and flow (i.e. that products can flow in and out easily at all hours). Part of the success of the Manawatu region as a logistics hub is the ease of business for logistics operations in Palmerston North and Manawatu District – businesses can be located close to the city’s airport which is rarely closed and is very efficient. Trucks can get in and out of the region in any direction relatively quickly at any time of the day and there is good railway access. The presence of a large student population assists with the supply of a flexible workforce in the region.

Distribution centres and transport operators are essential elements of the supply network between farmers, manufacturers and importers and the final customer. A large retailer such as a supermarket may stock thousands of different products from more than a thousand different producers and it is not feasible for each supplier to ship product to each individual supermarket in New Zealand. To manage the flow of goods from the producer to the customer some producers operate their own distribution networks to manage the supply of products to individual customers. Some retailers own and run their own distribution centres to consolidate shipments of product from thousands of suppliers while other distribution operations are run independently of either the producer or the supplier.

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The development of distribution and warehousing facilities allows manufacturers to increase their efficiency through larger production runs of a single item. They are able to supply products on a quick response basis by storing surplus product while other items are being produced. Warehousing and improved storage technology has also been important for the steady supply of seasonal products to customers throughout the year. Increased automation of product handling in distribution centres is leading to the development of larger facilities where automated equipment is increasingly used to select products which have been previously brought into the distribution centre and to pack shipments for distribution to the final customer.

The growth of large distribution centres in the region has been obvious as a result of the construction of large distribution facilities, particularly in Kelvin Grove and the North-East industrial area of Palmerston North City but there has also been strong growth in smaller distribution centre and wholesale employment in Manawatu District over the last nine years. There was a 55% increase in Manawatu District logistics and supply chain sector employment between 2000 and 2009, accounting for a third of total employment growth in Manawatu District during this period.



5



“The development of communal stores

for produce is an early example of the developing logistics

and supply chain sector. Traders travelled beyond the boundaries of their

local community and local kingdom, looking for new

resources to trade for a profit. This resulted in

trade flourishing...”

IntroductionThe development of the logistics and supply chain sector has been occurring as long as human settlements began trading outside their local community and moving beyond individual stores of key supplies, particularly perishable goods such as food. The goods that people wanted were not always produced where they wanted to consume them so means of transport and storage methods began to develop. Seasonal production of agricultural products meant that people had the choice of consuming goods when they were harvested or moving the produce to a preferred site and storing it for later use. The development of communal stores for produce is an early example of the developing logistics and supply chain sector. Traders travelled beyond the boundaries of their local community and local kingdom, looking for new resources to trade for a profit. This resulted in trade flourishing, even when the means of transport were still very primitive.

As transport networks increased and the technology for preserving goods for later consumption increased, the distance between consumers and producers began to widen. Regions were able to specialise in those commodities which could be produced more efficiently than other regions and were able to supply commodities out of season to consumers located in another hemisphere. The concept of comparative advantage has been a founding principle of economics which is used to explain the huge growth in international trade which has occurred, particularly since the Second World War. The growth in international trade has also been supported by rapid gains in the cost effectiveness of transport and progress under the World Trade Organisation (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) to remove or reduce barriers to trade between countries.

Increasing global wealth levels have also significantly contributed to the range of commodities now expected by consumers while increased competition between producers on a global scale means typical grocery stores now offer a vast range of products compared with what was available even 50 and 20 years ago. The increasing cost competitiveness of air transport compared with other forms of transportation has significantly increased the range of perishable products available for consumers. This, however, has added much greater complexity to the infrastructure required to manage the transportation and distribution of these products.

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Increased use of air transport has also allowed distributors to move to just-in-time supply of products to customers. While air transport is still more expensive than transport by sea, the financial benefits from the opportunity to minimise stock levels and to allow for faster responses to changes in demand can more than outweigh the additional transport costs involved.

Logistics and Supply Chain ManagementThe elements of logistics and supply chain management have always been fundamental to the manufacturing, storage and movement of goods and products to customers. However, more recently distribution and logistics have come to be recognised as vital elements in the business environment. Concepts such as trade-off analysis, value chains, and systems theory play a major part in the success of individual businesses. In an environment where global business competition has intensified, the opportunity to make small changes in the cost of supplying products to customers or advances in the level of service provided can play an important role in long-term business profitability and growth.

Rapid progress in the development of information management and communications technologies has enabled logistics companies to improve their competitive advantage through differing strategies involving improved levels of service and/or improved cost or productivity advantages. Strategies for improved levels of service include:• Tailored service• Improved reliability – guaranteed service “in full and on time”• Increased responsiveness to customer needs• Improved information – such as real-time information on the progress of

goods in transit• Ensuring the right goods are picked for delivery

Strategies for reducing costs and/or improving productivity include:• Improved capacity utilisation• Increased stock turnover• Reduced inventory levels• Increased automation

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Key Business CategoriesDistribution centres and transport operators are essential elements of the supply network between farmers, manufacturers and importers and the final customer. A large retailer such as a supermarket may stock thousands of different products from more than a thousand different producers and it is not feasible for each supplier to ship product to each individual supermarket in New Zealand. To manage the flow of goods from the producer to the customer some producers operate their own distribution networks to manage the supply of products to individual customers. Some retailers own and run their own distribution centres to consolidate shipments of product from thousands of suppliers while other distribution operations are run independently of either the producer or the supplier.

The development of distribution and warehousing facilities allows manufacturers to increase their efficiency through larger production runs of a single item. They are able to supply products on a quick response basis by storing surplus product while other items are being produced. Warehousing and improved storage technology has also been important for the steady supply of seasonal products to customers throughout the year. Increased automation of product handling in distribution centres is leading to the development of larger facilities where automated equipment is increasingly used to select products which have been previously brought into the distribution centre and to pack shipments for distribution to the final customer.

8

Images courtesy of Brandlines, Foodstuffs, KiwiRail, NZ Post, Palmerston North Airport and Toyota.

Palmerston North Sector Profile: Logistics and Supply Chain



9



“The region’s employment growth is even more remarkable when compared with national employment growth in the logistics

and supply chain sector, which grew by just 8%

between February 2000 and February 2009.”

Manawatu Region Logistics and Supply Chain SectorThe logistics and supply chain sector comprises wholesale trade, transport, postal, warehousing, and non-store retailing activities. It is a significant employer in the Manawatu region, accounting for 5,870 jobs (10.6% of total employment in the region in 2009) and a similar proportion of total employee earnings (the employee earnings total of $228 million in the year to June 2008 includes an estimate for earnings in non-store retailing).

The logistics and supply chain sector in the Manawatu region grew strongly over the last decade, with the 45% growth in employee numbers significantly higher than the 21% increase in total employment in the region. The 1,860 jobs created in the sector between 2000 and 2009 accounts for nearly one fifth of the total employment increase in the region during this period but the sector currently accounts for just over one in ten jobs in the region. The region’s employment growth is even more remarkable when compared with national employment growth in the logistics and supply chain sector, which grew by just 8% between February 2000 and February 2009.

The growth of large distribution centres in the region has been obvious as a result of the construction of large distribution facilities, particularly in Kelvin Grove and the North-East industrial area of Palmerston North City but there has also been strong growth in smaller distribution centres and warehousing and storage services employment in Manawatu District over the last nine years. There was a 55% increase in Manawatu District logistics and supply chain employment between 2000 and 2009, accounting for a third of total employment growth in Manawatu District during this period.

Estimating the Economic Benefits of the Logistics and Supply Chain Sector Management to the Manawatu Region EconomyEstimates for the contribution of the logistics sector to Manawatu Region GDP were published in 2009 by Berl Economic in a report prepared for Vision Manawatu. The GDP estimates show that the contribution to GDP by the logistics sector in 2007 was $458 million in Palmerston North (14% of city GDP) and $75 million in Manawatu District (11% of district GDP), giving total GDP of $533 million for the Manawatu Region (13% of regional GDP).

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While the direct economic impact from the logistics sector in the Manawatu region is significant, accounting for 13% of regional GDP, the economic impact is even greater when the additional flow-on impacts of increased spending in the local economy is taken into account. Estimating economic impacts is done using multipliers, the tools economists use for measuring the downstream, or flow-on, effects of an initial change to a particular industry. Multipliers generally estimate the direct, indirect, and induced effects of one additional unit of final demand for a particular industry’s output on the entire economy.

Economic MultipliersType I multipliers are a measure of the “direct” and “indirect” effects of a one-off change to a particular industry (for example, an increase in GDP as a result of a new distribution centre being established in the city). The “direct” effect is the initial effect on that particular industry due to the change (for example, the new distribution centre will result in increased demand for labour in the local economy). The “indirect” effect results from the need for all other industries to produce more inputs for that industry. For example, the new distribution centre will result in increased demand for transport services, resulting in a local transport operator or operators employing more staff and increased profitability, or increased supplies of fuel and maintenance services for the materials handling machinery operating in the distribution centre). The NZIER model suggests the creation of a distribution centre of the scale of the new Foodstuffs Roberts Line Distribution Centre would add a further $25.8 million to economic activity in the region. This high level of additional economic activity generated as a result of distribution centre expansion is not surprising, since employment data for the logistics sector has shown very strong growth in road transport employment in response to recent growth in distribution centre activity.

In addition to “direct” and “indirect” effects, Type II multipliers include a third effect, called the “induced-income” effect. The “induced-income” effect is the result of increased household and business income that is spent on consuming additional goods and services (generated, for example, because the distribution centre and local transport operators have employed more staff and the profitability of transport businesses has increased – business owners are also consumers). Using the Type II multiplier, the creation of a distribution centre of the scale of the new Foodstuffs facility would result in a further GDP increase of $7.4 million.

In summary the total annual economic impact from a new distribution centre of the scale of the new Foodstuffs Roberts Line Distribution Centre is estimated to be a $60 million increase in regional GDP and a total employment impact of 680 jobs. The model suggests that the economic activity created by a distribution Centre with 250 full-time equivalent jobs would lead to the creation of a further 398 jobs in other parts of the economy (especially transport) and a further 33 jobs as a result of the Type II second round multiplier impacts, producing a total employment increase of 680 jobs.

The multiplier impacts are lower for other parts of the logistics sector but the model suggests that the $533 million direct economic contribution of the sector contributes to a further $278 million increase in regional GDP.



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“Part of the success of the Manawatu region as a logistics hub is the ease of

business for distribution sector...businesses are

located close to the city airport which is

rarely closed and is very efficient, trucks can get in and out of the region

in any direction relatively quickly at any time

of the day...”

Distribution SectorThe distribution sector in the Manawatu region has experienced significant growth over the last ten years. This is reflected in the 42% growth in employment in distribution sector employment in the region between February 2000 and February 2009. National employment in the sector increased by 15% over this period.

Part of the success of the Manawatu region as a logistics hub is the ease of business for distribution sector businesses in Palmerston North and Manawatu District – businesses are located close to the city airport which is rarely closed and is very efficient, trucks can get in and out of the region in any direction relatively quickly at any time of the day and there is good railway access. The key issues for logistics are land, labour and flow (i.e. that products can flow in and out easily at all hours). The presence of a large student population assists with the supply of a flexible workforce in the region.

Overview of the Flow of GoodsThe complexities of the logistics and supply chain sector means it is difficult to provide one simple definition of the flow of goods managed by the sector but key categories are listed below:

Manufacturer direct to retail store An example of distribution direct to retail store is a perishable product like bread, which is distributed directly from the bakery to each supermarket, using the baker’s own vehicle fleet. Staff employed by the baker are often responsible for the restocking of bread displays in the supermarket.

Manufacturer/importer via manufacturer’s distribution operation to retail store/customerThe Toyota distribution centre in Roberts Line is the largest local example of a manufacturer’s distribution operation in the region. The Roberts Line distribution centre stocks parts for all Toyota cars imported new and used into New Zealand. Individual parts are shipped daily, and in the case of the lower North Island, every few hours in response to orders received from customers.

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www.toyota.co.nz

Phone: +64 6 350 3400email: [email protected]

“The Palmerston North parts team currently process around 800

dealer orders, consisting of 2,600 line items or

10,000 pieces per day. An off the shelf supply rate of 95% means that the

vast majority of customer orders can delivered to

the customer overnight.”

29 Roberts Line PO Box 46 Palmerston North 4440

Toyota New Zealand National Customer Centre

Toyota New Zealand National Customer Centre

From their Wellington base Toyota New Zealand made the strategic decision in 1977 to relocate its Parts warehouse and distribution centre to Palmerston North.

A suitable site was located on the then outskirts of Palmerston North, on Roberts Line. A building was already under construction for Australian based Company Borg Warner, who had intended commencing motor vehicle transmission assembly. However Borg Warner decided not to proceed with the project and Toyota quickly took ownership of the empty 10,000sqm warehouse shell.

Since then the warehouse has grown in order to cope with an expanding Toyota car park, currently around, 680,000 Toyota units in operation. The warehouse now covers 23,000sqm and contains around $18m of parts and accessory inventory.

Covering the country from Kaitaia to Invercargill Toyota’s dealer network is made up of 31 core dealers operating at 85 separate nationwide locations. The air and road networks operating out of Palmerston North work very well for Toyota and allow it to capitalise on the back load capacity to the main regional centres.

The Palmerston North parts team currently process around 800 dealer orders, consisting of 2,600 line items or 10,000 pieces per day. An off the shelf supply rate of 95% means that the vast majority of customer orders can delivered to the customer overnight. The location means that customer orders received up to 5.00pm can be delivered to a nationwide dealer network by 9.00am the following morning.

In 1992 a major site redevelopment was undertaken when the operation was expanded to include national customer service and training. Following the car industry restructuring of the late 90’s the remainder of TNZ’s Wellington Head Office relocated to Palmerston North and in 1998 the old Wellington base was closed and Toyota’s new National Customer Centre was established.

Toyota New Zealand now employs around 150 people at its Palmerston North site which includes a multi award winning Customer Dialogue Centre where customers can access support 24/7. Palmerston North provides Toyota with an extremely stable and loyal workforce and its staff with a great lifestyle.

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Manufacturer/importer via distribution centre to retail storeThe Countdown Logistics distribution centre in the city supplies the Countdown and Woolworths supermarkets in the lower North Island. The retailer owned centres act as consolidation points, as goods from the various manufacturers and suppliers are brought into the distribution centre, unpacked and then repacked for distribution to individual supermarkets. Full vehicle loads of all of the different manufacturer’s products are distributed to the Countdown and Woolworths own stores in response to orders received daily from each store to replace product which has been sold or new items to be stocked.

The Foodstuffs distribution centres in the city supply grocery products to Foodstuffs affiliated shops (such as Pak N’Save, New World, Write Price and Four Square) throughout the southern half of the North Island. Wholesalers have acted as the intermediaries in distribution chains for many years, providing a link between the manufacturer and retailers.

This physical distribution channel has altered in recent years with the development and growth of well known wholesale organisations or voluntary chains (Mitre 10 is another well known example of a chain of independent retailers using a common brand). These voluntary chains were generally begun on the basis of securing a price advantage by buying in bulk from manufacturers or suppliers and have led to the development of major distribution centres.

Manufacturer/importer to national distribution centre to retail shop/customerA major example of this is Ezibuy, which purchases clothing from overseas and local manufacturers. All clothing is shipped to the distribution centre in Palmerston North and is then shipped out to individual customers in courier parcels in response to phone and internet orders or distributed for sale through one of their retail outlets. The Statistics New Zealand industrial classification includes non-store retail activities in the retail classification but we have included the employment in this sector in the logistics profile because it represents another important mechanism for the distribution of manufactured products to consumers.

Regional Employment by Distribution TypeEmployment data for the distribution sector is primarily categorised by the products being distributed, with key categories being basic goods, machinery and equipment, motor vehicles and parts and grocery products. We have also included non-store retailing and other warehousing activity.

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DISTRIBuTIOn SECTOR2000 2009 2000 - 2009 ChanGE

nuMBER OF EMPLOYEES % nuMBER OF EMPLOYEES

Basic MaterialsNew Zealand 14,990 18,810 25.5% 3,820

Manawatu Region 350 570 62.9% 220

Machinery and Equipment

New Zealand 26,350 30,430 15.5% 4,080


Motor Vehicle and Motor Vehicle Parts

New Zealand 6,030 6,980 15.8% 950


Grocery, Liquor and Tobacco Products

New Zealand 16,540 20,750 25.5% 4,210

Manawatu Region 705 1,280 81.6% 575

Other Goods Wholesaling

New Zealand 25,060 25,630 2.3% 570


Commission-Based Wholesaling

New Zealand 2,010 2,650 31.8% 640


Non-Store Retailing and Retail Commission Based Buying and/or Selling

New Zealand 2,240 1,650 -26.3% -590


Warehousing and Storage Services

New Zealand 4,180 5,300 26.8% 1,120

Manawatu Region 308 190 -38.3% -118

TOTaL DISTRIBuTIOn SECTOR

nEw ZEaLanD 97,400 112,200 15.2% 14,800

ManawaTu REGIOn 2,784 3,955 42.1% 1,171

Note: Includes ANZSIC Division F (Wholesale Trade), Non-Store Retailing and Retail Commission Based Buying and/or Selling from Division G (Retail Trade) and Warehousing and Storage Services from Division I (Transport, Postal and Warehousing)

SouRce: STATISTIcS New ZeAlANd

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nEw ZEaLanD DISTRIBuTIOn SECTOR EMPLOYMEnT (2009)

Grocery, Liquor and T0bacco Products 19%

Motor Vehicle and Motor Vehicle

Parts 6%

Other Goods Wholesaling 23%

Machinery and Equipment 27%

Commission-Based Wholesaling 2%Non-Store Retailing and Retail Commission-Based Buying and/or selling 1%

Warehousing and Storage Services 5%

Basic Materials 17%

ManawaTu REGIOn DISTRIBuTIOn SECTOR EMPLOYMEnT (2009)

Grocery, Liquor and Tobacco Products

32%

Motor Vehicle and Motor Vehicle

Parts 10%

Other Goods Wholesaling 9%

Machinery and Equipment 15%

Commission-Based Wholesaling 2%

Non-Store Retailing and Retail Commission-Based Buying and/or

selling 13%

Warehousing and Storage Services 5%

Basic Materials 14%

-50 0 50 100 150 200

Manawatu

NZ

Percentage change between 2000 and 2009

Commission BasedWholesaling

Other GoodsWholesaling

Grocery, Liquor andTabacco Products

Motor Vehicle andMotor Vehicle Parts

Machinery andEquipment

Basic Materials

Non-Store Retailing andRetail Commission Based

Buying and/or Selling

TotalDistribution Sector

Warehousing and Storage Services




ChanGE In DISTRIBuTIOn SECTOR EMPLOYMEnT (2000-2009)

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Phone: +64 6 356 5323Fax: +64 6 356 4726email: [email protected]

www.brandlines.co.nz

“Brandlines has implemented high-

tech business systems including a fully

integrated ERP system, wireless PC tablet for stock movement and

control and sophisticated inventory-management systems...state-of-the-

art Voice Pick technology, which ensures the highest

possible order pick accuracy.”

23 Walkers RoadPrivate Bag 11047Palmerston North

Brandlines Limited

Brandlines

Brandlines Limited started operations in Palmerston North 1972.

Brandlines imports, distributes and markets a select range of international grocery and confectionery brands in New Zealand. With over 230 staff and revenues exceeding $85 million, Brandlines is a leading player in the fast moving consumer goods market in New Zealand.

The Head Office is strategically located in the middle of New Zealand on a 10 hectare site in Longburn on the outskirts of Palmerston North, with 10,000m² of warehousing space and room for expansion. Situated just 7km from Palmerston North city centre the premises are away from high volume traffic zones while it still provides relatively easy logistics movements. The central location provides an ideal logistical hub, assisting Brandlines to provide next day delivery throughout New Zealand, using a combination of its own delivery fleet and contracted freight companies.

Brandlines has implemented high-tech business systems including a fully integrated ERP system, wireless PC tablet for stock movement and control and sophisticated inventory-management systems. Brandlines warehousing processes utilize state-of-the-art Voice Pick technology, which ensures the highest possible order pick accuracy.

Customers are offered a broad range of order-placement technologies to suit their business. The wireless and mobile technology is designed to provide fast order lead-times and high delivery accuracy enabling Brandlines to provide delivery almost anywhere in New Zealand within 24 hours.

While the location provides a great distribution hub, the people of Manawatu provide Brandlines with an excellent skilled and stable workforce – a major contributor to the company’s success.

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Key Regional DifferencesMajor differences between the national and Manawatu region employment patterns are:

Grocery, liquor and tobacco products There is significant employment in wholesaling of grocery, liquor and tobacco products in the Manawatu region, with the 1,280 employees accounting for nearly a third of Manawatu region distribution sector employment. Major businesses which dominate employment in this sector in the region are the large distribution centres for Foodstuffs (for example Pak N’Save, New World, Write Price, 4 Square, Shoprite and Liquorland) and Progressives Enterprises (Countdown and Woolworths). The Foodstuffs distribution operations in the city include the new dry goods store in Roberts Line, the cool store in Makomako Road and Toops Wholesale in Jasper Place. Other major distributors are also based in the region. Coca-Cola operates a 5000 square metre warehouse in Palmerston North, Brandlines, based near Longburn, is an importer and distributor of international grocery and confectionery brands, while Bidvest / Crean is a foodservice / hospitality wholesaler based in the region.

Motor Vehicle and Motor Vehicle PartsThe motor vehicle and vehicle parts sector accounts for 10% of Manawatu region distribution sector employment. Its importance in the region is entirely due to the presence of the Toyota head office and distribution centre in Palmerston North. Toyota is the dominant vehicle brand in New Zealand, accounting for 24% of new car registrations in 2008, 26% of ex-overseas car registrations, 29% of new commercial registrations and 33% of ex-overseas commercial registrations. Toyota stock parts for cars they supply new to the New Zealand market as well as parts for all imported second hand cars. Its location in Palmerston North is a key aspect in the company’s ability to maintain an overnight service rate of 95%.

Non-Store Retailing and Retail Commission Based Buying and/or SellingStatistics New Zealand classifies this activity as retailing because the products are sold primarily to individual customers rather than to retailers. We have included this category in the distribution sector profile because it is a major employer in the region and plays an important role in the distribution of locally produced and imported products directly to consumers. Ezibuy is the largest fashion clothing and home decor multi-channel retailer in Australasia and is the major employer in this sector in the region.

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Machinery and EquipmentOver 30,000 people are employed nationally in machinery and equipment wholesaling, the largest of the product groups within the wholesale trade sector, and accounting for 27% of national employment. In the Manawatu region, machinery and equipment employment accounts for 15% of distribution sector. However, not surprisingly an important component of this sector in the Manawatu is agricultural and construction machinery wholesaling. One of the key firms operating locally in this sector is C B Norwood Distributors, a leading tractor and machinery distribution group based in Palmerston North, with sales outlets throughout New Zealand

Other Goods WholesalingOther goods wholesaling is the second largest of the product groups nationally within the distribution sector, accounting for 23% of national employment but only 9% of Manawatu region distribution sector employment. The sector includes textile products, clothing, footwear, pharmaceutical and toiletry goods, furniture, floor coverings, jewellery and watches, kitchen and dining ware, toys, sporting goods, books and magazines, and paper products and packaging. An example of a local business operating in this sector is Reach Media, a distributor of advertising material to letterboxes. Reach Media has recently moved its national distribution facility from Palmerston North to a new purpose built 1500 square metre facility at Longburn, to the west of the city. The company closed its Wellington centre in 2009.

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nuMBER OF EMPLOYEES

nuMBER OF EMPLOYEES %

Basic Material wholesaling

Wool Wholesaling 31 18 -13 -42%

Cereal Grain Wholesaling 24 21 -3 -13%

Other Agricultural Product Wholesaling 44 110 66 150%

Petroleum Product Wholesaling 20 3 -17 -85%

Metal and Mineral Wholesaling 45 91 46 102%

Industrial and Agricultural Chemical Product Wholesaling 62 160 98 158%

Timber Wholesaling 50 6 -44 -88%

Plumbing Goods Wholesaling 9 9 0 0%

Other Hardware Goods Wholesaling 65 143 78 120%

ToTAl 350 570 220 63%

Machinery and Equipment wholesaling

Agricultural and Construction Machinery Wholesaling 96 195 99 103%

Other Specialised Industrial Machinery and Equipment Wholesaling 143 196 53 37%

Professional and Scientific Goods Wholesaling 3 3 0 0%

Computer and Computer Peripheral Wholesaling 90 55 -35 -39%

Telecommunication Goods Wholesaling 30 3 -27 -90%

Other Electrical and Electronic Goods Wholesaling 190 152 -38 -20%

Other Machinery and Equipment Wholesaling n.e.c. 3 18 15 500%

ToTAl 559 610 51 9%

Motor Vehicle and Motor Vehicle Parts wholesaling

Car Wholesaling 140 143 3 2%

Commercial Vehicle Wholesaling 55 45 -10 -18%

Trailer and Other Motor Vehicle Wholesaling 0 0 0

Motor Vehicle New Parts Wholesaling 119 138 19 16%

Motor Vehicle Dismantling and Used Parts Wholesaling 25 35 10 40%

ToTAl 329 375 46 14%

DETaILED DISTRIBuTIOn SECTOR EMPLOYMEnT GROuPED BY auSTRaLIan anD nEw ZEaLanD STanDaRD InDuSTRIaL CLaSSIFICaTIOn 2006 (anZSIC06)

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nuMBER OF EMPLOYEES


Grocery, Liquor and Tobacco Product wholesaling

General Line Grocery Wholesaling 110 600 490 445%

Meat, Poultry and Smallgoods Wholesaling 63 30 -33 -52%

Dairy Produce Wholesaling 9 40 31 344%

Fish and Seafood Wholesaling 12 9 -3 -25%

Fruit and Vegetable Wholesaling 110 110 0 0%

Liquor and Tobacco Product Wholesaling 35 9 -26 -74%

Other Grocery Wholesaling 373 480 107 29%

ToTAl 705 1,280 575 82%

Other Goods wholesaling

Textile Product Wholesaling 15 6 -9 -60%

Clothing and Footwear Wholesaling 18 12 -6 -33%

Pharmaceutical and Toiletry Goods Wholesaling 30 55 25 83%

Furniture and Floor Covering Wholesaling 6 9 3 50%

Jewellery and Watch Wholesaling 0 0 0

Kitchen and Diningware Wholesaling 3 12 9 300%

Toy and Sporting Goods Wholesaling 6 18 12 200%

Book and Magazine Wholesaling 0 12 12

Paper Product Wholesaling 70 88 18 26%

Other Goods Wholesaling n.e.c. 115 135 20 17%

ToTAl 265 340 75 28%

Commission-Based wholesaling 90 90 0 0%

non-Store Retailing 178 500 322 181%

warehousing and Storage Services 308 190 -118 -38%

TOTaL DISTRIBuTIOn SECTOR 2,784 3,955 1,171 42%

Note: Subgroup totals differ from the sum of the detailed components due to rounding to protect confidentiality




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“Strong growth in transport sector

employment in the Manawatu region is

therefore not surprising given the growth which

has been occurring in distribution centres

in the region. There is significant movement of bulk product, especially by road into the region.”

TransportWholesale trade and warehousing operations are important aspects in managing the flow of goods between manufacturers and importers and the final customers but the transport sector also plays an important role in the physical transportation of goods from the manufacturer or port (for imported goods) to the final customer. Strong growth in transport sector employment in the Manawatu region is therefore not surprising given the growth which has been occurring in distribution centres in the region. There is significant movement of bulk product, especially by road into the region and then the subsequent re-shipment of smaller quantities out of the region to customers.

Factors Contributing to Growth in Transport Capacity and InfrastructureA recent New Zealand Transport Agency study of freight transport within the central region of New Zealand (encompassing the Taranaki, Manawatu-Whanganui, Hawke’s Bay and Gisborne regions) identified that the Manawatu-Whanganui region had the greatest demand for domestic freight services of the four regions. State Highways 1, 2 and 3 intersect in the region, rail offers a significant freight hub with rail lines to the west and east connecting with the North Island Main Trunk and one of the key hubs for domestic airfreight is also based in the region

Rules limiting driver hours have been an important factor in the growth of distribution centres in the region, because it is a central servicing point for the Taranaki, Manawatu-Wanganui, Hawkes Bay, Wairarapa and Wellington regions, an area with a combined population of close to 1 million people in 2009. Delivery trips are able to be made from the Manawatu region to this wider region which allow the driver to deliver goods to a range of destinations and yet still return to the local transport depot within the limit for driver hours. Similar restrictions on driver hours are also relevant to the role of Palmerston North as a key hub for domestic rail freight in the lower North Island. The Manawatu region is well placed nationally in terms of its ability to supply products within 24 to 48 hours of placement of orders. Rail can service most parts of New Zealand within 48 hours from Palmerston North.

22


Regional Employment by Transport ModeWhile strong growth in employment in the region has been in the distribution sector there has also been even stronger growth in transport services in the region, particularly road transport. The 56% growth in regional employment in transport, postal services and freight forwarding services contrasts significantly with a small decline in national employment in the sector.

Employment in road transport businesses in the city doubled during the period from 2000 to 2009, increasing from an estimated 521 employees in 2000 to 1,099 employees by 2009. National road transport employment growth was only 23% over this period. Two other sectors which recorded strong growth in regional employment while national employment declined were postal, courier pick-up and delivery services, and rail services.

TRanSPORT, POSTaL anD FREIGhT FORwaRDInG SERVICES2000 2009 2000 - 2009 ChanGE

nuMBER OF EMPLOYEES


Road TransportNew Zealand 27,780 34,250 6,470 23.3%

Manawatu Region 521 1,099 578 110.9%

Postal, Courier Pick-up and Delivery ServicesNew Zealand 25,160 13,870 -11,290 -44.9%

Manawatu Region 408 451 43 10.5%

Air Transport and Airport OperationsNew Zealand 10,280 12,330 2,050 19.9%


Rail TransportNew Zealand 2,100 1,890 -210 -10.0%


Water Transport, Port Operations and Support Services

New Zealand 4,430 5,880 1,450 32.7%


Other Transport Services and Freight Forwarding Services

New Zealand 9,562 10,660 1,098 11.5%

Manawatu Region 85 77 -8 -9.4%

Transport, Postal and Freight Forwarding Services

New Zealand 79,312 78,880 -432 -0.5%

Manawatu Region 1,222 1,911 689 56.4%

23


nEw ZEaLanD TRanSPORT anD POSTaL SERVICES EMPLOYMEnT

Other Transport Services and Freight Forwarding Services 14%

Air Transport and Airport Operations

16%

Road Transport 43%

Postal, Courier Pick-up and Delivery Services 18%

Rail Transport 2%

Water Transport, Port Operations and Support

Services 4%

ManawaTu REGIOn TRanSPORT anD POSTaL SERVICES EMPLOYMEnT

Other Transport Services and Freight Forwarding Services 4%


8% Road Transport 57%

Postal, Courier Pick-up and

Delivery Services 24%

Rail Transport 7%

SouRce: STATISTIcS NZ

-60 -40 -20 0 20 40 60 80 100 120

Manawatu

NZ

Road Transport

Postal, Courier Pick-upand Delivery Services

Air Transport andAirport Operations

Rail Transport

Water Transport,Port Operations

and Support Services

Other TransportServices and FreightForwarding Services

Total Transport,Postal and Freight

Forwarding Services

Percentage change between 2000 and 2009


ChanGE In TRanSPORT SECTOR EMPLOYMEnT (2000 - 2009)

24


PALMERSTON NORTH

New Plymouth

Napier

Hastings

GisborneTaupo

Ohakune

Hawera

Masterton

Wanganui

Rotorua

MartinboroughWellington

Palmerston North - Connected City

LAKE TAUPO

2 hrs

2.7 hrs

3 hrs

1 hr

2.5 hrs 1.5 hrs

2.5 hrs

1.5 hrs

Distribution Driving Times (hours) and Movement Corridors

25


Road TransportThe largest component of the road transport sector in the region is road freight transport with 850 employees in 2009, an increase of 85% from February 2000. Other components of road transport include inter-urban, rural and urban bus services, with 198 employees in 2009 and taxis with 51 employees. Urban bus employment grew strongly between 2000 and 2009, with the introduction of free Massey and UCOL buses in 2004 and improvements to other urban bus services requiring more drivers to service the growth in passenger numbers and improvements in service frequency.

The expansion of the major grocery distribution centres in the region reflects the restrictions on driver hours and the opportunity which the centrality of the region provides. Drivers are able to deliver goods from the distribution centres based in the region to supermarkets, smaller retailers and wholesalers, service stations, and hospitality providers (such as restaurants and cafes) and return to the Manawatu within the time restrictions.

Rail TransportRail transport employment increased by 68% between 2000 and 2009 (national rail employment declined by 10% over this period) and by 2009 the region accounted for 7.6% of national rail transport employment. The rail hub in Palmerston North offers exporters access to the east through to the Port of Napier and to Eastport (Gisborne). The line to the west connects with Westgate (Port Taranaki), the line to the south connects with CentrePort (Wellington), while the line to the north offers connections to both Tauranga and Auckland.

Rail is used to bring some products in to Palmerston North for distribution through the range of distribution centres based in the region, although the majority of product comes into the region by road.

The Government has committed in principle to a total funding package of $750 million over the next three years, with final decisions on funding subject to individual business cases. The KiwiRail Turnaround Plan is designed to see the rail freight business become sustainable within a decade by getting it to a point where it funds its costs solely from customer revenue. The government investment reflects the projections that the amount of freight being moved on New Zealand’s transport network is expected to double by 2040 and a desire for an increasing share of the freight to be moved by rail.

26


www.kiwirailfreight.co.nz

“Rail is vital to New Zealand’s export and domestic industries

moving 33 percent of the country’s export

goods. If the freight traffic that travels on rail was transferred to road, it

would add an estimated one million more truck

trips a year to the roading network. ”

Phone: 0800 351 351email: [email protected]

Kiwi Rail

KiwiRail

KiwiRail is the owner of a business with a long and proud history of service to New Zealand and as one of the country’s biggest freight movers plays an integral role in the wider transport network.

On one hand we are a new company bringing the different elements of the rail industry back together; on the other, an established business with a strong New Zealand history. While many years of under-investment have reduced rail’s competitiveness, KiwiRail is rising to the challenge. The focus is on improving the quality of its assets and services in order to reclaim market share by creating solutions for customers.

The aim is to grow the business by making the most of rail’s natural advantages - moving bulky goods, linking export industries to major ports and moving people through congested cities.

Rail is vital to New Zealand’s export and domestic industries moving 33 percent of the country’s export goods. If the freight traffic that travels on rail was transferred to road, it would add an estimated one million more truck trips a year to the roading network. The Ministry of Transport predicts rail freight traffic will grow by 70 percent over the next 20 years.

Each week KiwiRail Freight operates approximately 900 services around the country. KiwiRail works with major customers both to meet the changing freight volume patterns and to convert more volume from road to rail. There are three key markets in which rail operates as a transport operation:

BULK - the movement of bulk freight such as export coal, milk, steel, meat, horticultural products and forestry. The Milk Route from the Hawkes Bay via Palmerston North to Taranaki is a key business. One milk train carries the load equivalent of 28 road tankers

IMEX - the movement of containerised freight for import and export sector.

DOMESTIC - the movement of domestic freight throughout New Zealand primarily from North to South.

Many of our key domestic customers say they see real value in rail and are already investing in developing rail siding infrastructure to more fully integrate rail into their services.

27


PaLMERSTOn nORTh CITY COnnECTED CITY - nORTh ISLanD RaIL nETwORK TRaFFIC MaP

28



Postal and Courier Pick-up and Delivery ServicesPostal and courier pick-up and delivery services are also a significant source of employment in the region with 460 employees in this sector in 2009. The major New Zealand Post mail processing centre in Palmerston North plays an important role in providing employment directly in the city as well as supporting air freight services from Palmerston North airport. While employment in the region increased by only 14% between 2000 and 2009 national employment in the sector declined by 45% over this period. Many distribution centres work on a 24 or 48-hour delivery timescale to the customer so within New Zealand airfreight and couriers are commonly used in the distribution of high value products.

DETaILED TRanSPORT, POSTaL anD FREIGhT FORwaRDInG SERVICES SECTOR EMPLOYMEnT GROuPED BY auSTRaLIan anD nEw ZEaLanD STanDaRD InDuSTRIaL CLaSSIFICaTIOn 2006 (anZSIC06)

TRanSPORT, POSTaL anD FREIGhT FORwaRDInG SERVICES2000 2009 2000 - 2009 ChanGE

nuMBER OF EMPLOYEES


Road Transport

Road Freight Transport 460 850 390 85%

Interurban and Rural Bus Transport 40 58 18 45%

Urban Bus Transport (Including Tramway) 6 140 134 2233%

Taxi and Other Road Transport 15 51 36 240%

ToTAl 521 1,099 578 111%

Rail Transport

Rail Freight Transport 80 103 23 29%

Rail Passenger Transport 3 30 27 900%

ToTAl 83 133 50 60%

air and Space Transport 50 106 56 112%

Other Transport

Scenic and Sightseeing Transport 6 9 3 50%

Other Transport n.e.c. 0 3 3

ToTAl 6 12 6 100%

Postal and Courier Pick-up and Delivery Services

Postal Services 340 358 18 5%

Courier Pick-up and Delivery Services 68 93 25 37%

ToTAl 408 451 43 11%

Transport Support Services

Airport Operations and Other Air Transport Support Services 75 45 -30 -40%

Freight Forwarding Services 70 65 -5 -7%

Other Transport Support Services n.e.c. 9 0 -9 -100%

TOTaL 154 110 -44 -29%

TOTaL TRanSPORT, POSTaL anD FREIGhT FORwaRDInG SERVICES 1,222 1,911 689 56%

29


www.nzpost.co.nz

Manawatu Mail Centre, 9 Matthews Avenue, Takaro, Palmerston North

Phone: 0800 501 501email: [email protected]

New Zealand Post Group

“Mail from these lower North Island centres

accounts for around 70% of the volume processed

at the Manawatu mail centre and is turned

around in two to three hours ready for despatch.

Mail also comes from about 180 street posting

boxes in the wider Manawatu

region boundary.”

New Zealand Post Group

Palmerston North is an important hub in New Zealand Post Group’s network.

The Manawatu Mail Centre, one of six key automated processing centres in New Zealand, processes mail in the lower North Island, apart from Wellington and Wairarapa. It also connects upper North Island and South Island FastPost mail, as well as overnight courier freight to the Wellington, Hawke’s Bay, Taranaki and Manawatu regions.

Manawatu Mail Centre Leader Dave Ramage says the facility processes about 40 million private and business mail items and 1.3 million parcels annually. He says transport logistics are critical. Mail from these lower North Island centres accounts for around 70% of the volume processed at the Manawatu mail centre and is turned around in two to three hours ready for despatch. Mail also comes from about 180 street posting boxes in the wider Manawatu region – 70 of them within the Palmerston North city boundary.

There are around 30 transport movements daily in and out of the Manawatu Mail Centre, with a number of road transport services also connecting with in and outbound Air Post flights operating through Palmerston North.

One of New Zealand Post’s three Fokker Friendship aircraft is based in Palmerston North and operates a Palmerston North-Christchurch-Palmerston North rotation. Another Friendship stops at Palmerston North enroute from Auckland to Blenheim and two Metroliners land and depart at Palmerston North between 11pm and midnight – one from Auckland enroute to Christchurch and Dunedin, and the other from Dunedin and Christchurch enroute to Auckland.

There are 62 mail delivery rounds in Manawatu – 29 of them in Palmerston North. Ninety percent are cycle rounds, six use motorcycles and the rest are deliveries by Posties on foot.

30

“”


www.pnairport.co.nz

First Floor, Terminal Building, Airport Drive PO Box 4384, Palmerston North

Phone: +64 6 351 4415Fax: +64 6 355 22 62email: [email protected]

Palmerston North Airport Ltd

“One of the unique advantages of Palmerston

North is the capability of overnight air freight delivery to anywhere

in New Zealand. When it comes to air freight,

Palmerston North is on the ‘main trunk’

that operates 24-hour without curfew between

Auckland, Palmerston North and Christchurch.”

Palmerston North International Airport

Palmerston North International Airport is ideally located to support the distribution sector, enabling air transport to be linked with road and rail transport options.

Sites are available within the airport precincts to enable efficient distribution operations that can take advantage of these options. The NZ Post distribution centre is just one example of a successful on-airport operation.

The airport is also located immediately adjacent to other industrially zoned land that has become the nucleus of large scale distribution businesses.

One of the unique advantages of Palmerston North is the capability of overnight air freight delivery to anywhere in New Zealand. When it comes to air freight, Palmerston North is on the ‘main trunk’ that operates 24-hour without curfew between Auckland, Palmerston North and Christchurch.

The airport features the following for freight transport:

Regular current freight operations with dedicated freight aircraft operating for NZ Post, and Air Freight NZ together with parcel post capacity on Air New Zealand’s domestic scheduled passenger aircraft

Capacity suitable for aircraft up to B767/B757 size

No curfew, with planning around the airport to minimise the risk of curfew limiting operations

Plans for runway extension to 2,600m enabling future growth and capacity for international air freight in conjunction with long-haul passenger services

Sites for development on airport with rail access (Palmerston North is at the junction of 5 main rail lines)

31


PALMERSTON NORTH

Auckland

Wellington

Christchurch

Dunedin

Invercargill

Palmerston North Connected City

Hamilton

Monthly Air Movements - Passenger Services & Freight Services

Freight Movements

Passenger Movements

32


Air TransportAir transport employment increased by 96% between 2000 and 2009 but the 98 people employed in the sector in 2009 still represent a very small share of national employment in this sector. Palmerston North International Airport is fortunate to be well located in terms of its central location in the North Island and New Zealand. This is reflected in the services provided by all three Air New Zealand subsidiaries to the city, offering a wide range of connections directly to the main cities and smaller regional airports. The number of direct connections with South Island airports from Palmerston North is an example of this strength. For example, Air New Zealand currently offers four direct flights daily from Palmerston North to Christchurch while other provincial airports such as Hamilton, New Plymouth and Napier offer a smaller range of direct flights.

The airport is also well placed in terms of proximity to the State Highway system and rail connections, with District Plan designations approving allowing for a short deviation from the North Island Main Trunk rail line to the airport terminal. The airport is already a key hub for domestic air freight, having significant advantages over Wellington Airport, where scarcity of land and an airport curfew operating from midnight to 6 am restrict the opportunities for freight services.


ManawaTu REGIOn TRanSPORT anD POSTaL SERVICES EMPLOYMEnT

Employment as of February

0

200

400

600

800

1000

1200

Other Transport Services and Freight Forwarding Services

Rail Transport


Postal, Counier Pick-up and Delivery Services

Road Transport

No

of Jo

bs


33



“A recent New Zealand Transport Agency report has noted the region is a key staging point for

relatively high value import and domestic

freight between Auckland and Wellington and

between Auckland and the South Island.”


advantages for Distribution Centre Location in the Manawatu Region

Central Location in new ZealandPalmerston North is a key central servicing point for the Taranaki, Manawatu-Wanganui, Hawkes Bay, Wairarapa and Wellington regions, an area with a combined population of close to 1 million people in 2009. With a further 1 million people in the South Island the city is a key midpoint in servicing New Zealand’s 4.3 million population. A recent New Zealand Transport Agency report has noted the region is a key staging point for relatively high value import and domestic freight between Auckland and Wellington and between Auckland and the South Island.

Ease of Business for Logistics OperationsPart of the success of the Manawatu region as a logistics hub is the ease of business for logistics operations in Palmerston North and Manawatu District – businesses are located close to the city airport which is rarely closed and is very efficient, trucks can get in and out of the region in any direction relatively quickly at any time of the day and there is good railway access.

State Highways 1, 2 and 3 intersect in the region offering connections to Wellington, the Wairarapa, Hawkes Bay and Taranaki regions. State Highway 1 is the key connection for the region to the Ports of Auckland, Tauranga and Wellington and Auckland International Airport, which in the year to June 2009 accounted for 74% by value of all freight unloaded at New Zealand ports. The proportion of freight imported through Tauranga has increased significantly since the 1990s, reducing the proportion of sea freight imported through the Port of Auckland. The proportion of imported freight which arrives in New Zealand through the Port of Auckland and Auckland International Airport (by value through sea and airports) reached 73% in 1998 but had declined to 57% for the year ending June 2009.

Rail offers a significant freight hub in Palmerston North with rail lines to the west and east connecting with the North Island Main Trunk. The $750 million funding package announced by the government in the 2010 Budget offers the potential for KiwiRail to increase its share of national freight volumes through the ability to offer faster delivery times for customers.

34


Palmerston North International Airport is fortunate to be well located in terms of its central location in the North Island and New Zealand. It is one of three significant domestic freight hubs in New Zealand, offering easy road access for freight to and from the airport and a lack of any restrictions on hours of operation.

Affordability Data is not readily available to compare the costs between regions of purchasing individual sites or leasing commercial buildings. However a key standard regional indicator we have is for home affordability which shows lower land prices and building costs in the Manawatu compared with most regions. Since the largest contributor to the difference in home affordability between regions is the difference in land value rather than in building costs, the home affordability indicator is a useful proxy for comparing the costs of operating a distribution centre in different regions.

The 2009 Annual Demographia International Housing Affordability Survey found that the Palmerston North-Manawatu region was the most affordable of the eight New Zealand regions surveyed. The affordability measure employs a “Median Multiple” (median house price divided by gross annual median household income) to rate housing affordability. The 2009 September quarter median house price for Palmerston North-Manawatu was $237,200 and the median household income was $51,100, giving a Median Multiple of 4.6. The Median Multiple was the highest in Tauranga-Western Bay of Plenty (6.8), closely followed by Auckland (6.7). Median house prices in key North Island port cities ranged from $457,500 in Auckland to $381,200 in Wellington and $353,900 in Tauranga-Western Bay of Plenty. Tauranga-Western Bay of Plenty scored more poorly on the Median Multiple indicator than Auckland because the median household income in the region was significantly lower than for the Auckland region.

Affordability is also an important factor in the ability of businesses to attract labour to a region and is a factor in constraining domestic migration within New Zealand, particularly to Auckland. Affordability is also reflected in variations in average wage rates between regions, but again there is a lack of any comprehensive database on wage rates by region.

Labour ForceMajor distribution centres based in the region have cited the presence of a university in the region (Massey University) as a key factor in their decision to locate their distribution centre in the region. There are several reasons for this interest in educational facilities in the region:

Massey University offers a range of study options in the area of logistics and supply chain management which include the part-time Graduate Diploma in Logistics and Supply Chain Management, Postgraduate Diploma and Master of Logistics and Supply Chain Management and PhD. This offers great opportunities for ongoing education for employees in the region and also recruitment opportunities for local businesses.

35


The region is also centre to The Logistics Training Group Ltd (LTG), a specialist logistics and supply chain management educator that has provided UK/EU registered bridging qualifications and short course management programmes in this area for over 15 years. LTG delivers the post-graduate level CILT UK Professional Diploma in Logistics & Transport and an associated undergraduate certificate programme, as well as various topical short courses. LTG has long established partnerships with Massey University in New Zealand and the University of New England in Australia, and has a wide off-shore delivery capability. LTG has its graduates working in all logistics areas and has had Top World Graduate for the UK Professional Diploma twice in the last four years.

The UK Professional Diploma is accepted by Massey as an equivalent to the university’s Post-Graduate Diploma in Logistics & Supply Chain Management. Uniquely. Entry to the LTG Professional Diploma programme is by interview, experience, and recognition of prior learning. Subject to grade, Professional Diploma graduates are eligible to apply to enter the Massey University Masters in Logistics & Supply Chain Management degree.

LTG can provide applied distance educational services throughout New Zealand, Australia, and the Asia-Pacific Rim. Logistics & supply chain managers are able to experience a stream of learning development opportunities to fit their personal and professional circumstances. Students are from both military and civilian backgrounds (www.LTG.co.nz).

Attracting staff to the region is helped if prospective employees view the educational opportunities offered in the region to be favourable. NCEA achievement levels for the secondary schools in the region are higher than the national averages while the local polytechnic (UCOL) and Massey University offer a wide range of post-school education opportunities in the region.

The presence of a large student population assists with the supply of a flexible workforce in the region. The majority of university students work part-time while studying full-time at university and are often willing to accept options for shift work that are less attractive to older workers.

Lack of Traffic CongestionThe physical location of the region on a plain, with multiple road connections to the main state highways (State Highways 1, 2 and 3) means that traffic flows are not significantly affected by congestion, even during high commuter flows in the morning and evening. The weakest link in the road network in the region is the road through the Manawatu Gorge, which is closed from time to time by slips, but alternative routes to the Hawkes Bay and Wairarapa are available via the Saddle Road and Pahiatua Track.

Recent work on upgrading State Highways 56 and 57 have improved traffic flows south from Palmerston North to connect with State Highway 1 south of Levin. Major government funding has been announced for significant improvements to the highway from north of Levin to Wellington. Other road network improvements are proposed in a new transport study addressing transport flows between Mount Stewart and the Manawatu Gorge, including the eventual completion of a high speed rural ring road around Palmerston North.

36


www.corplogistics.co.nz

4th Floor, City Council Building, The Square PO Box 1401 Palmerston NorthPhone: +64 06 351 4316Fax: +64 06 351 4317email: [email protected]

“Logistics Centres of Gravity” are created - by virtue of ports, airports, and distribution hubs, -

significant and sustained business growth follows.

The key is to predict and orchestrate how

this growth in strategic Logistics Centres of

Gravity can occur; this is the realm of Corporate

Logistics Ltd.”

Corporate Logistics Limited

Corporate Logistics Limited

Corporate Logistics Limited (CLL) is a specialist logistics and supply chain consultancy that has operated in this niche since 1992. The logistics sector is the “sleeping giant” of industry accounting for around 13.9% of GDP in New Zealand and 14.5% of GDP in Australia. This quiet giant is awakening and many smarter players have observed that wherever strategic “Logistics Centres of Gravity” are created - by virtue of ports, airports, and distribution hubs, - significant and sustained business growth follows. The key is to predict and orchestrate how this growth in strategic Logistics Centres of Gravity can occur; this is the realm of Corporate Logistics Ltd.

Core competencies:• Quantitative and qualitative definition of value proposition offerings and

the development of supporting strategies that identify business opportunity and optimization of cross-chain structures.

• SWOT analysis, defining logistical rationale in supply chain configuration and design.

• Business and market trends analysis concerning sustainable business practice.

• Competitive and comparative analysis of supply chain and logistic functions.• Evaluation of ERP and technological systems for providing warehouse,

inventory and process efficiencies. • Tracking economic policy initiatives in transport, warehousing and hub

development.

The nature of the specialist consultancy requires that the company undertakes frequent economic and strategic analysis in both domestic and international distribution networks. This has provided the company with international project work in Australia, Asia, Africa, the UK, EU, USA and Caribbean.

Past performances:Corporate Logistics concentrates on providing expert technical services to the commercial sector focusing on defining the logistic functions to improve efficiency and cost effectiveness in supply chain. Projects have included:• Managing the logistics to supply stadia seating for the 2007 IWC Cricket

World Cup. • International Cargo Hub systems development work in Australia, New

Zealand and Asia. • Senai International Airports and Ports of Tanjung Pelepas Perishable Hub in

Malaysia. • Market and supply chain development of Middle Eastern seafood.• Supply chain strategy and Value proposition, ongoing project for major New

Zealand port • Lower North Island infrastructure assessment for exports.Company differentiators:Corporate Logistics provides a unique role in fulfilling customer supply chain analysis and evaluation. Its association with the Logistics Training Group and the Universities of Massey (NZ), University of New England Australia and the Logistics Learning Alliance in England (UK) in Post Graduate Supply Chain Management presents the company an unrivalled global source of information in supply chain acumen.

PETER CRAWFORD, Economic Policy Advisor, Palmerston North City Council, Private Bag 11034, Palmerston North

Email: [email protected]

Published by:City Future Unit, Palmerston North City Council, Private Bag 11034, Palmerston North

Phone: 06 356 8199, Fax: 06 655 4115www.pncc.govt.nz

Documents

Manawatu Region Sector Profiles 2010 - …...includes an estimate for earnings in non-store retailing). The logistics and supply chain sector in the Manawatu region grew strongly over