New Zealand’s road transport industry is continuing to meet market demand despite tougher economic times, with most companies successfully withstanding rising costs, new economic data reveals.
That’s according to the Transport Cost Index (TCI) for the quarter ending June 2024, with forecasting to September 2024, which shows transport costs are outpacing consumers price index (CPI) inflation. The data is prepared by accounting firm Grant Thornton for national road freight body Transporting New Zealand.
It shows freight operators have displayed “remarkable resilience” in the face of challenging economic conditions, Transporting NZ interim chief executive Dom Kalasih says.
“While it’s clearly not easy out there, we believe there is no cause for alarm. It’s a case of operators having to do what they need to do to weather the current downturn before the economy gradually moves up a gear and gets in better shape.”
Kalasih says it’s important for operators to keep a keen eye on costs and pass increases on to customers when necessary, and to take advantage of best price offers for fuel and other services. Groups like Transporting NZ can help with all of those challenges, he says.
According to the data, transport costs increased by 8.2% in the 12 months to June 2024, with CPI sitting at 3.3% during the same period.
“While it’s great to see general inflation coming down, there are still real cost pressures facing road freight operators when setting their rates,” Kalasih says.
“The only TCI cost category coming down over the June 2024 quarter was fuel, with all other categories apart from RUC increasing. That means costs like insurance, tyres, overheads and interest are all going up.”
The cost increases have combined with falling monthly demand to put the squeeze on some freight operators.
The latest ANZ Truckometer data revealed a 1.8% monthly fall in September for the heavy traffic index. However, it was 0.6% higher than a year ago based on a three-month average. Light traffic was 1.1% lower for the month. ANZ commented that the “overall signal regarding economic activity remains weak”.
Motor Industry Association (MIA) data for September 2024 and for the year to the end of September shows a mixed picture.
Heavy commercial vehicle sales were down 2.3% on 2023 but up nearly 8% on 2022. Monthly sales for September 2024 (585 units sold) were lower than last year (724 units).
