International transport trends and challenges

Connecting to the world

Experts discuss sustainable and efficient ways of connecting our product and people to the world.

ASB’s recent Backing Business event, facilitated by Paul Gestro, was an insightful look into the global transport trends and future predictions from a range of entertaining business experts. Each was chosen for their experience finding sustainable and efficient ways of connecting our product and people to the world, including the use of technology, brand trust and what’s empowering global sales. ASB’s senior economist Kim Mundy kicked off the discussion, joined by Alex Larsen at <a href="https://www.airnewzealandcargo.com/">Air New Zealand Cargo</a>, Louise Wood from <a href="https://www.sanford.co.nz/">Sanford</a>, David Downs the CEO of <a href="https://www.nzstory.govt.nz/">New Zealand Story</a> and Emma Wheeler, the COO from <a href="https://www.trust.codes/">Trust Codes</a>. An economic update Kim provided a useful high-level overview of how the economy is faring compared to global conditions, which is facing a slowing in economic growth, this year and next. ‘There are a couple of reasons for this,’ she said. ‘First, central banks in developed countries have tightened monetary policy to tame inflation. The other thing is, we haven't seen an immediate jump in demand from China for our exports. Weak Chinese demand, coupled with subdued private demand in New Zealand, results in a forecasted flat economy in New Zealand for the rest of 2023 and into 2024’. Other trends Kim noted: <ul> <li>With our borders open again, tourism arrivals have increased significantly and we expect tourism arrivals will continue to lift (albeit offset with Kiwis travelling abroad).</li> <li>There’s been a net migration surge in the first part of this year with people coming to fill job vacancies.</li> <li>It’s still tough for some. There will be less disposable income for those with mortgages coming off fixed rates, coupled with higher food prices. There’s a lot less money at the end of the day for consumers to spend.</li> <li>The good news is the demand and supply imbalances are starting to reduce. Air freight and shipping prices are coming down and global supply chain issues are easing, which is good for all businesses.</li> </ul> Kim finished on a comment about the value of the Kiwi dollar, given it has dropped below USD$0.60 recently. She thinks it’ll remain at this level for at least the rest of the year, great for our exporters, not so great if you’re off to Hawaii for a holiday. First thoughts All the speakers acknowledged that because we’re so far away from our export markets, being able to localise the experience offshore is important. This includes the New Zealand brand, how we represent ourselves to the world and how we connect our export economy to our international trading partners. Alex from Air New Zealand shared the unique dynamic of ‘air cargo’, with the dependency between tourism and trade. Historically 80% of all exported or imported air freight is transported in the belly of a passenger aircraft. ‘The last two and a half years has been like driving in fog,’ says Alex, ‘where you can see only 100 metres in front of you. It’s not until you drive that next stretch of road that you can decide whether to turn left or right ahead. Collaboration and responsiveness were key during the uncertainty which COVID-19 brought to international trade (and dealing any uncertainty for that matter). With increasingly direct access to a broader range of international markets through air pathways, we’re seeing shortened supply chains. Speed and connection to market is therefore critical, especially with goods that have a short shelf life. Getting fresh fish for example, in 72 hours from sea to plate through direct flights to market and distribution into foodservice, allows exporters a great opportunity to command premiums and capture more value.’ David from New Zealand Story touched on the opportunity of exporting IP, as well as physical goods, for example the amazing technology being used on farms. As well as product, we can export technologies that can be localised in each country. He also covered the possible issue someone eating New Zealand beef could worry about the high carbon footprint. ‘That’s not always right,’ said David, ‘New Zealand food often has a lower environmental impact including the carbon travel cost, than local produce, as we’re so much more efficient in production and packaging. The education piece is therefore vital.’ Tracking product all the way through to the end consumer is an important emotional connection we can emphasise. Louise raised the benefit of integrating technology, especially between catching seafood and regulations. ‘For example,’ said Louise, ‘we know where fish are caught, the vessel and the date. We have a vast amount of data to connect with consumers, rather from just a regulatory perspective.’ Sanford’s uniqueness is due to the broad range of species and value proposition that comes from that. The value of brand New Zealand ‘The brand value of New Zealand,’ said David, ‘has been valued at around USD$280 billion by an independent firm. That's more than McDonald's and right up there with Apple, Amazon and Microsoft. So, it’s not just fresh New Zealand salmon in a New York restaurant, but the story that goes behind the journey’. David’s other observations included: <ul> <li>People are curious about New Zealand. When you tell your story and connect, it's much more memorable to customers. The information online ‘About Us’, is more important than you think.</li> <li>New Zealand has ‘soft’ power, which refers to the ability to influence others when you don't have ‘hard’ power (usually military or economic). Soft power is measured through familiarity, influence, environmental sustainability, science, and technology. We have this halo effect to use to our advantage (without the temptation to greenwash).</li> <li>Authenticity is key.</li> </ul> In summary, David said ‘remember the brand of New Zealand is worth something to you as a business from New Zealand, so try and attach yourself to that brand because it has meaning – and one great way to do that is to use the iconic New Zealand FernMark.’ The AI learning opportunity Paul had a few questions from attendees on the future of AI machine learning and predictive analysis. Emma recounted a story from her recent travels. ‘It’s exciting and frightening, she said, ‘to see how the pace of technology is continuously evolving and machine learning is no longer innovative, it’s just normal. Every business should understand how their data is connected and have an AI strategy.’ Trust Codes applies machine learning and AI to their enormous sets of data to identify what scanning behaviour might look like across the supply chain. ‘We use AI,’ said Emma, ‘to help point out anomalies that lead to unusual behaviours and counterfeit product being inserted into the supply-chain. We started as a brand protection company and naturally spanned our capability to include traceability. To encourage a personalised experience, we try to get consumers as part of the solution, so they scan their unique record, like a digital licence plate for every product bought.’ The consensus on AI was your business might not be taken over by the technology, but it might be taken over by another business that knows how to use AI better than you. Final tips entering new markets Paul wrapped up the session asking each presenter their advice for other businesses wishing to export. <ul> <li>David from New Zealand Story travels the world with lots of exciting New Zealand businesses, so is uniquely placed to recommend practical next steps. ‘The first thing,’ David suggests, ‘is get good advice, whether that's New Zealand Trade and Enterprise, or a board of directors. The great thing about New Zealand and the benefit of our small size, is it's very easy to get advice from others who've been on the journey before. Pick up the phone, jump on LinkedIn. In my experience, everyone is willing to help so you're not alone.’</li> <li>Louise from Sanford said ‘recognise what your business proposition is and which product has a story and connection that can be sold at a premium. Be very targeted. You can't be all things to all people, so be specific about where you want to invest and grow.’</li> <li>Alex at Air New Zealand Cargo summarised with, ‘I think a key theme in the future is closeness and connection of data and people. More businesses will co-develop and co-create to be more responsive in the face of uncertainty and change.’</li> <li>Emma from Trust Codes suggested to collect as much data as you can. ‘You may not necessarily know what you're going to do with it now, but there are tools and technology being created as we speak that will. The future is going to look very different to what it is today. Keep front of mind that a good connection to the end consumer means you have a business. A bad connection means you don’t.’</li> </ul> The highly informative session ended with Paul asking the panel to agree or disagree with some final questions. All panellists thought air freight will be a continuing value-added contributor to New Zealand exports, machine learning analysis will be an important tool for supply chains, we’ll never really understand AI machine learning analysis and having an authentic New Zealand story helps overcome our distance to markets. The only disagreement was if they thought there will be another disaster event in 2024. Three said no, one said yes. We hope the one saying yes is wrong.