Mainfreight chairman Bruce Plested has expressed disappointment that the company has not been included in the decision-making group for the future of the Cook Strait rail ferry services.
Speaking at the company’s annual shareholders meeting on July 25, Plested commented: “It is regretful, if not appalling, in New Zealand where Mainfreight is the fourth largest customer of KiwiRail – behind coal, forestry and milk – that we are not included in the group making decisions for the future of the Cook Strait rail ferry services.”
The comments follow recent warnings from the company that New Zealand’s roading infrastructure “will not cope” in the absence of rail.
“Our transport business is a significant user of rail across the length and breadth of New Zealand. The current fiasco surrounding the future of both the rail ferry services across the Cook Strait and rail services south of the Waikato are unsettling,” the company said in its annual results announced in May.
The company says the loss of rail services between the North and South Island would see Mainfreight add 5700 additional truck and trailer journeys per annum on the road, “putting significant pressure on the already fragile roading network”.
Decreasing freight volumes
At the shareholders meeting, Plested also highlighted the full year 2024 result was the first time in 14 years where the company’s net profit after tax fell from the previous year.
The Kiwi freight giant reported 35% year-on-year drop in net profit to $278 million but that was against an all-time record high to March 2023.
“The decline in tax paid profits continues into the current year, but at a lower level than the past year,” Plested says.
“In New Zealand and Australia, where we have been for many years, we expect further profitability improvements in this current year. Our other regions, Asia, Europe and the USA will take time to find meaningful improvements,” he adds.
In its full year overview, the company says it “expected to do better” and pointed to an “OK” performance in New Zealand and Australia but was “disappointed” with how the year went in Asia, USA and Europe.
It says decreasing freight volumes saw utilisation across all products decline and overhead cost structures inflated as a consequence of historical growth including team members and owner drivers. Its total workforce was reduced by 667 people to a total 10,644 as a result.
New branches
However, network expansion continued with the addition of six new branches for a total 337 branches worldwide. The company now operates in 27 countries, up from the previous 26.
Mainfreight says it continues to invest capital to expand and improve the network and despite the demanding operating environment, it is “experiencing improvement”.
It says the business has grown larger, attracting more customers and enhanced capabilities.
The company is spending a total $390m in property and fit-out costs for FY25-26. This includes a total $159m in New Zealand for seven new transport facilities and three new warehouses.
Sustainable infrastructure
Mainfreight is also making strides in sustainable infrastructure which includes 8.4MW in solar generation, with 2.6MW added over the past year. Its battery storage capacity has reached 9.5MWh, increasing by 4.5MWh in the last year. Its rainwater capture and filtration systems added over seven million litres of storage in the past two years.
Currently, 84% of its forklifts are electric, an increase of 4%; its car fleet consists of 46% hybrid and electric vehicles, up by 3%. Although only 1% of its truck fleet (33 trucks) is hybrid and electric, the company says more are on order.
