Trucking Firms Weathering Tough Economic Conditions

The latest economic data shows the road transport industry continues to meet market demand, despite tougher economic times, and most companies are successfully withstanding rising costs.

Ia Ara Aotearoa Transporting New Zealand Interim Chief Executive Dom Kalasih says that transport operators have shown remarkable resilience in the face of challenging economic conditions.

"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."

"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. Transporting New Zealand can help with all of those challenges."

Recently released economic data confirms this tough picture for the industry. The latest Transporting New Zealand/Grant Thornton Transport Cost Index (TCI) for the quarter ending June 2024 with forecasting to September 2024, shows transport costs outpacing CPI inflation.

"The TCI 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." Dom 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".

These cost increases have combined with falling monthly demand to put the squeeze on some freight operators. The latest ANZ Truckometer data revealed a monthly fall in September for the Heavy Traffic (down 1.8%). However, it was 0.6% higher than a year ago (based on a three-month average). Light traffic was 1.1% lower. ANZ commented "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 on 2023 (minus 2.30%) but up on 2022 (plus 7.95%). Monthly sales for September 2024 (585) were lower than last year (724).

Transporting New Zealand encourages any members under pressure to contact their team for support.

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