Surging oil prices mean road transport operators across New Zealand are facing cost pressures like never before, according to peak body Transporting New Zealand.
Of the 400 transport companies surveyed across the sector, almost nine in 10 said recent cost increases have had a major negative impact on their business.
“We are very concerned about some businesses being able to survive,” says Transporting New Zealand Chief Executive Nick Leggett.
“The nearly one in five businesses who report they are unable to pass on increased costs to customers obviously face the greatest threat.
“We are raising the alarm given the fragility of our supply chain. The trucking industry carries 93 per cent of freight so these survey results really go to the heart of supply chain vulnerability. Simply put, if operators can’t make their business viable, trucks don’t move, and if trucks don’t move, shelves don’t get stocked,” Leggett said.
“Transport companies are often the meat in the sandwich. They operate at low margins and therefore even the smallest cost movements can bite. Our economy requires viable transport companies to keep things moving and productive, at a time when there are already enough challenges.”
Unsurprisingly, fuel has been the major cost increase. A year ago, only 20 per cent of the industry had fuel making up more than a quarter of their business costs. Today, 64 per cent say fuel is more than a quarter of their costs. A total of 45 per cent of operators say fuel is now in excess of 30 per cent of their costs; a year ago that was just 8 per cent.
Nick Leggett said it was very concerning that only half the operators interviewed as part of the survey felt their customers appreciated the need to increase rates.
“We are a service industry. Wheels of trucks roll to deliver goods for customers. Fixed costs like fuel can’t be avoided. These costs need to be fairly shared by all parties in the supply chain.”
