Freight cost rises inevitable
Freight cost rises for a wide range of goods is inevitable says the National Road Carriers Association, the country’s leading road transport organisation.
“Road transport companies are under increased cost pressure from a variety of directions which will flow through to consumers,” says David Aitken, NRC’s CEO.
Next month (1 October) Road user charges are due to increase – by up to 10 percent – depending on the weight and type of vehicle.
“This will affect every trucking company nationwide,” says Mr Aitken. “When the majority of goods we consume are delivered by truck to where we purchase them it is inevitable the cost of the goods will increase.”
Other cost increases facing road transport operators include rising fuel prices, insurance, wages and salaries, congestion and waiting times at the ports.
“Fuel prices have gone up, 13% in the last 4 months alone as a result of increasing crude oil prices and the weakening New Zealand dollar against the United States dollar.”
Mr Aitken said companies in the Auckland area were already paying 11.5 cents a litre more for fuel as a result of the recently introduced regional fuel tax.
Increasing congestion – particularly in Auckland – but also in other major cities, Hamilton, Tauranga – Mt Maunganui, Wellington and Christchurch has meant trucks were not getting through as much work in a day, but operational costs still had to be covered.
“It’s taking longer to get goods onto and off the wharf, especially in Auckland, and that adds to costs. The old cliché that time is money still holds true,” says Mr Aitken.
There have also been increases in insurance premiums and higher wages and salaries necessary to retain staff in an industry where there are personnel shortages.
“Road freight transport costs are rising,” says Mr Aitken. “It’s up to individual companies to calculate how much the rise might be and in some parts of the country it could be more than other areas.”
Given these costs increases, the road freight sector will need to pass these onto their customers who will ultimately pass them onto consumers.