Source: Ia Ara Aotearoa Transporting New Zealand
Cost pressures continue to bite for the road freight industry, with repairs and maintenance, depreciation and interest, insurance, and wages all rising over the March quarter, according to Transporting New Zealand’s Cost Index, released today.
The Transport Cost Index, prepared for Transporting New Zealand by Grant Thornton, shows road freight costs have risen by 6.03 percent over the past year to March 2024, above CPI at 4.02 percent.
Transporting New Zealand Interim Chief Executive Dom Kalasih says cost increases, combined with reduced demand (demonstrated by a month on month fall of 2.3% in the ANZ Truckometer Heavy Transport Index in May), will put pressure on many trucking firms.
“The March quarter data really highlights the importance of road freight operators keeping a close eye on their freight rates and margins, and communicating with customers about the realities of the cost pressures they’re facing.
“The average cost of both insurance and repairs and maintenance has increased by more than two percent in the March quarter alone. Fortunately this was offset somewhat by a drop in fuel prices in the same period.”
“We encourage our members to check out the Transport Cost Index, our Transport Business Cost Model that can help calculate sustainable hourly and per-kilometre freight rates, and our competitive commercial discounts on fuel and business services.”
The Transport Cost Index
The Transport Cost Index, prepared by Grant Thornton for Transporting New Zealand, provides current and historical transport cost data and forecasts. It is available for purchase on the Transporting New Zealand website.
The Index is a quarterly report on the cost movements of the typical components that contribute to transport rates. It is the exclusive property of Transporting New Zealand.
The Index provides a transparent and independent reference source that can support tough conversations and negotiations between transport operators and clients.
The Index is not a “one size fits all” price index telling businesses how much they should charge. The level of detail making up the Index allows individual operators to apply that information in the respective proportions to their business activity.
The data is underpinned by Waikato University undertaking a representative survey of transport businesses every five years to ensure the data reflects market conditions. The Index is reported quarterly by international business advisory experts Grant Thornton.
About Ia Ara Aotearoa Transporting New Zealand
Ia Ara Aotearoa Transporting New Zealand is the peak national membership association representing the road freight transport industry. Our members operate urban, rural and inter- regional commercial freight transport services throughout the country.
New Zealand’s road freight transport industry employs 33,000 people (1.2 per cent of the total workforce), and has a gross annual turnover in the order of $6 billion. This is part of a wider transport sector that employs 108,000 people and contributes 4.8 per cent of New Zealand’s GDP.
