This week’s blog is by John Collins, Membership Team Manager & Upper South Island Membership Manager.
As I cast my mind back to late November, it was full of optimism that summer was just around the corner, and so hopefully was the opportunity to enjoy those long, warm nights that came with it. Well, that didn’t quite work out as planned, did it!
Instead of the long hot summer we all wished for the country experienced several significant weather events and ongoing inclement weather. Not only did this hamper the plans of everyday Kiwis, but it had a significant impact on the transport industry.
Bad weather saw the closure of some key freight routes around the country including across the top of the South, and the well-publicised issues across the North Islands’ East Coast and Bay of Plenty.
As things slowly return to normal, the impact to operators is generally forgotten. The industry is left to get on with the job in hand of keeping the supply chain running.
With cost control such a critical part of any business – especially in transport given the margins involved – how can we educate New Zealanders on what the true cost of these events can be?
Some are easy to identify. Long detours due to road closures cost more in diesel, RUC, time, vehicle utilisation, driver hours and fatigue. Others are more difficult for the average Joe Bloggs to understand. The situation with our ferries has been well documented, but do people realise that delays and closures on the road can put immense pressure on drivers and dispatchers to make their booked slot or potentially miss the boat? Likewise, if the sailings are cancelled due to bad weather, how do operators manage the backlog of freight and disruption to their schedules as they try to catch up? All of this has a cost attached.
There’s one situation a normal motorist will perhaps understand. Planned road maintenance often occurs over summer to capitalise on dry and warm weather. But obviously, the weather hasn’t been cooperating as of late. With fewer days available to get heavy works done, in some instances we’re seeing multiple works happening on the same piece of road, at the same time. This adds significant delays to key freight routes as we’ve seen this year. Again, this impacts timetables, connections and ultimately, costs.
Then there is the hidden cost: the health and wellbeing of those affected by these events and detours. The increased pressure on deadlines and the costs to businesses that may or may not be recoverable. Make no mistake, this is a tough industry to be in. We know the dedication, passion and commitment that drivers, dispatchers and business owners put in every day, but who looks after them? I urge you all to prioritise some time to understand how these additional pressures can affect your team members. Make sure you utilise any of the great tools available to acknowledge and support them. At the end of the day, your staff are your #1 asset.
As I write this, we’re seeing events nationally and internationally that have an unprecedented impact on the cost of doing business in the transport industry. Fuel volatility (and for anyone who missed it, check out Mark Stockdale’s great piece on fuel security in last week’s blog), increased booking charges at our ports, insurance, compliance, and maintenance costs are all impacting business productivity and profitability.
These are not easy times to operate in. One important point I want to reiterate is that businesses must have a process in place to be able to recover these fluctuating costs. Recently, we’ve advised our members to carefully review their costs and the current implementation of their fuel adjustment factor (FAF) clauses in contracts if they have them. No business can continue to absorb these levels of increases without reaching the point of no return!
As a membership association, the team at Transporting New Zealand are always here to help in any way we can. If you have any issues or concerns you would like our advice or assistance on, please get in touch.
Safe travels.
Written by John Collins. Contact John at john@transporting.nz.
