Transport sector 'facing cost pressures like never before' - industry group


It is pointing the finger at surging oil prices, saying operators are "facing cost pressures like never before".

Transporting NZ chief executive Nick Leggett said they were concerned about the survival of some businesses.

"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 percent 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."

Transporting NZ said 400 transport companies were surveyed and with nine out of 10 saying costs had gone up, "unsurprisingly, fuel has been the major cost increase".

A year ago, only 20 percent of the industry had fuel making up more than a quarter of their business costs, it said.

"Today, 64 percent say fuel is more than a quarter of their costs. A total of 45 percent of operators say fuel is now in excess of 30 percent of their costs; a year ago that was just 8 percent."

Some trucking firms are met with a "flat refusal" to pay a higher price for carrying freight, with the industry having customers which had significantly more market power and "get to dictate", Leggett told Morning Report.

"There is not a lot of influence often for trucking for trucking businesses to increase rates," he said.

"Often there isn't a fair share being paid to some trucking businesses and I think what we're going to see is a reduction of those businesses.

"If lots of trucking businesses fall over, we're not going to have that ability in the supply chain to keep things moving. We've already seen a stressed supply chain, and I think we're going to see more of that if this kind of behaviour continues."